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APLL in Latin America: Lessons from Chile, Ambitions in Brazil

April Chapman:
Hello everyone and welcome to the APLL Pulse Podcast, where you can uncover new insights from the logistics and freight forwarding industry through the seasoned experts at APLL Logistics, a global supply chain provider. We’ll help you keep pace with the current topics impacting businesses, and advance your logistics strategy.
Hello everyone, I’m your host, April Chapman. APL Logistics has locations all over the world, including having a presence in 19 Latin American countries. In our podcast today, we will be zeroing in on the countries of Chile and Brazil. We are lucky to have two guests joining us, Fernando Encinas and David Juarez. Before we jump into our topics, let’s get a quick introduction to both of them. Fernando, would you like to go first?

Fernando Encinas:
April, thanks for having me. Really excited to be here. I’m a fan of your podcast, so I hope we can share our support in your podcast. I’ve been in logistics for over 20 years, in different industries regarding port logistics, intermodal as well, shipping companies as well. Right now, I’m as a Country Manager here in Brazil, based in Brazil for six months now. It’s been a really, really nice Onboarding. I used to work in APL many years ago, about I’d say almost eight years ago, where I was in APL for about eight years as well. So it’s been a really cool voyage in the sense that I know very well how APL works from within, but then being outside and coming back in, I’ve seen a lot of change and evolution, which is something I’m going to share with you guys in this podcast, which is really cool, especially regarding technology.

April Chapman:
I’m looking forward to that. We have so many people that come back, I think that’s really interesting. We’ve even talked about doing a podcast on that. How many people end up coming back to APL? And I think that says a lot. They go, they learn something else new, and then they want to bring it back here again. Well, thank you. Thank you, Fernando. How about you, David? Would you introduce yourself to our guests?

David Juarez:
Hi, April and hi, Fernando. My name is David Juarez. I’m in charge today of the Business Development Solutions development for South America. I invest in Chile. I have 25 years experience in logistics, so I’m getting old already and half of it was in my country, in Spain, and then the last 13 years, this part of the world in Latin America. I’m five years in, very happy in APL Logistics. Happy to share these moments with you, April, and Fernando.

April Chapman:
I love how you’ve lived in so many different places, such an international experience. I think that’s one of the benefits too, of working in global companies, right? These opportunities. You’re moving to Brazil from Chile now and that’s a great experience for you and your family. So, alright, let’s go ahead and jump into some of our questions today.
So first, let’s talk about what’s been going on in Chile. We have a fairly large footprint there with a lot of positive developments. I’m always hearing stuff coming out about Chile, many of which we are planning to replicate in Brazil now. So David, can you share some key takeaways from your time in Chile?

David Juarez:
I’ve been over five years in this company, every day I’m more and more impressed about who we are, who we have become. We are a company of more than 1,200 employees in the country, which considering the size of this country, which is something between 18 to 19 million people, it’s very large. We are probably among the top three companies in the country with more than 35 years already established here. My takeaway is the capacity we have to keep leading the market and keep leading the solutions and the trust that we have for our customers. In the time that I’ve been here, I’ve seen many executives and non-executives, many people that has been exported from Chile to other part of the world in APL, and I guess that tells something good about our job now.
What can I tell you? We are a very integrated company. We are a company that can really start their job at the planning of the purchases anywhere in the world. We have the capacity to bring the cargo, to manage the purchase orders, to bring them to our DC or the DC of our customers. We have the capacity to do contract logistics, very complex contract logistics operations within distribution, and even reverse logistics. So we have customers with us with more than 20 years have been trusting our end-to-end solutions, and I think that’s a very differentiator in the market. We can compete with local companies and local knowledge, and also bring the best in the international knowledge, something that is normally it’s not that easy. So that’s something very, very remarkable of our company. I want to invite anyone who wants to come here and try to understand what we do and they can ask our customers who are the best to tell about us.

April Chapman:
Recently, we’ve launched quite a lot all at the same time, right?

David Juarez:
Yeah, this year has been very special. In the last 45 days, we were able to manage five new customers. Because we tend to work with customers in the long term, four large control logistics and distribution operations in four different places and one large order management customer and all happening within 45 days. It’s been very stressful, it’s been four months of everybody working on this because that’s not easy. The management of everything also within all the cases with full integration, with interfaces between the customer and us, it’s been very remarkable. And so far, all the operations went live and everything has been smooth, on track of what we are supposed to be doing.

April Chapman:
That’s wonderful, that’s wonderful.

David Juarez:
Yeah, very impressed with that part, so.

April Chapman:
I could see how much pride you have in the team and what we’ve been able to accomplish. That’s great.

David Juarez:
Yeah, yeah, yeah, yeah. And we have had the recognitions of the customers. In the end, it’s the most important. Now that the customer recognize that you’ve been doing what you should be doing because sometimes they think that the 3PL should be doing just by default, but in reality it is not always happen. Logistics is not an easy thing. Thank you for asking, April because it’s something we’re very proud of.

April Chapman:
I think we should really celebrate all the successes, so that’s awesome. I’m glad we could share that. Okay, let’s get Fernando into this conversation. So Fernando, as the Brazil Country Manager now, why do you think Brazil is a good place for us to invest and grow?

Fernando Encinas:
Thank you. April. Congratulations to David. I know how hard it is. Five customers simultaneously is just huge, really, really happy for you guys in that launching.
Regarding Brazil, Brazil is a huge country, one of the top 10 largest economies in the world. Today is 8th, it has years with the 7th to 9th, and with that, you have a huge emerging market as well. And so being in an emerging market, it’s synonym of opportunities. And in that sense, it’s been a country that over the past years it has sustained growth and with increasing stability, which is something that investors look upon where you have political stability, social demographic stability and that has been going on for a few years now, so that fosters long-term investment. So in that sense, the country has been really pushing an economic growth that’s being really diverse in different industries. And today, you see a huge massive consumer market.

The population of Brazil is over 215 million people, so in that sense, the consumer market is very big and that requires complex logistics. Specifically, in a country this big, is this huge geographic proportions. Also with that you have today’s technology, so you have a huge growing e-commerce industry going on and being developed here in Brazil, so that’s really demanding on the domestic side as well, not only on the international side. And on top of that, Brazil is one of the biggest exporters of natural resources. You have the mining, you have forest, you have meat industry. So, all that movement requires complex engineering and logistics that defines how you really want to push and make an efficient route of all those products are coming in and going out of Brazil. In that sense, it makes it a really huge opportunity specifically for us as a freight forward and a logistics company, in order to start to partner up with different companies and try to design the most optimal way of helping out on how they want to get their product moving forward.

APLL has been in Brazil for almost over 20 years, but our main focus was on the international side, on the ocean freight. Over the last years we’ve really been strong on the PO management side as well. We’re helping out our customers on the visibility, but now we’re really eager to start helping out and putting our footprint on the domestic side, on the CLS side, which is something that we’re very strong for example in Chile, what David was talking about, in Mexico, and the US, Asia obviously and the other continents.

But today, we are just starting. We have a few operations going and with all this movement going around and with all this long-term investment that we’re seeing, we really, really want to get our partners in. We really want to get our customers that we do have in the states, in Chile for example, and try us out here. We’re having a really long route where we’re seeing possibilities for warehousing, we’re seeing possibilities for domestic distribution. Today, we’re doing a lot of intermodal inland services on the transportation side, so we’re really building upon and that’s going to be our main challenge, is to start building using all our leverage, all the knowledge that we have on the international side and start implementing on the domestic side. That’s going to be our challenge for the next three years and we’re really getting some interested customers on exploring on that side.

April Chapman:
There’s so much good going on there and I can see your excitement about it and why it’s a great place to grow. But, you just mentioned a challenge and I’m sure there’s many others because it is so large. Because there are so many things. What are some specific challenges to Brazil, additional ones?

Fernando Encinas:
On the geographic side, you got the Amazon, the biggest rainforest in the world, where you have this system of rivers that requires feeders, barge and intermodal services. That’s really cool. In order to get to some of those markets, you really have to pick your brain and you got to invest in that. So you have a geographic challenge with this huge landscape and very different landscape.
You have some infrastructure gaps. Brazil is still a developing country, as most of Latin America. So for example, all the road transportation, you have good highways, but you also have under maintained highways, which is also a challenge and that comes with the security issues as well that we have in Latin America. So in that sense, you do need to have a local footprint that you know what to do, when to do it, and who to do it with. So you need that, so that’s a big challenge.

Then you have the port congestion. As you are growing and if the port terminals do not grow at the same time, you start having bottlenecks and that’s really happening today in some of the main ports. And for example, Santos, whereas where APLL is based right now, it’s the biggest terminal port in Latin America with huge throughput going in and going out. If you start getting a bottleneck there, you start having some challenges on the inputs and the exports and that’s something that we have to work upon.

And on top of that, the biggest challenge is the bureaucracy and the tax complexity. Brazil is a federal state, kind of like the US. Each state has kind of independent laws that at the same time can adjust certain taxes as well. So you really have to have your local knowledge, get your attorneys, get your tax guys in and it becomes kind of like a chess game on how to get the best strategy on getting efficiency through, but in compliance with all of these regulations that you have to put it through. I would say when you put all of that on the table, it’s a complex world, it’s a complex country, but with a huge opportunity if you do it well. And that’s where we’re going right now.

April Chapman:
Yeah, it sounds like you really need people on the ground there to understand those-

Fernando Encinas:
Definitely.

April Chapman:
… specific challenges and meet the demands. We’re happy you guys are two of those for us. So, alright, let’s go on. I have another question for you. How do you think APL Logistics adds value compared to the other logistics providers that are in Brazil? Because obviously, we’re not the only ones, so how do you think that we add value?

Fernando Encinas:
If you imagine a country this huge, it has a lot of competition. You got your 3PLs on the small size, you got huge companies as well, but I have a main premise and I think it’s what APL does. We offer value, we’re not transactional, as David was saying. And my main premise is that your product can only go as far as your logistics allows you. So when you sit down with a customer and you start to decide on how you want to launch a product, how you want to deliver it and what your objective is, if it’s speed to market, if it’s cost, if it’s efficiency, you start deciding together with your customer. And then you kind of look back upon and we as APL, this is where I think it’s the biggest differentiator here is that we have local knowledge, but we have a huge global expertise with really strong verticals, regarding engineering, regarding design, regarding IT development.

So what we’re doing here today, for example in Brazil, is that we’re picking up the needs with our customer and then we’re making a transversal design together with our expertise teams, can be even outside of Brazil, which many of them are programmers and are engineers and we put a prefabricated supply chain layout and we try it out in the sense that prediction, through predictive analysis, you can really start to analyze.

If I started at Origin, say China and somewhere in China, or Southeast Asia and I got on this carrier because that’s the other thing, we’re a neutral company. You can either use us as your shipment execution or you can use other partners and we’ll help you manage that in the best way possible. We can effectively do predictive analysis in that sense and we can simulate plan A, plan B, plan C, speed, estimated time of transit, manufacturing time to the terminal. So you start adding up all those steps in the supply chain, you can get a prediction of cost, you can get a prediction of time and you can get a prediction of results even before doing it. So, I think that is just awesome and that really, really helps out our customers in having a very low risk decision making before you implement and that is something I think that APLL really excels and that is something that our customers are really, really impressed with us when we get down to business, in that sense.

April Chapman:
Yeah, I know Thad, our president, likes to talk about our neutrality and that’s a wonderful thing about what we do, is that we are a neutral party.

Fernando Encinas:
Definitely.

April Chapman:
Okay. David, do you have anything to add to that? I was asking about kind of add-on value, anything that comes to your mind?

David Juarez:
I think that we have many solutions on what Fernando says is very important, but maybe I could add that the most important asset of our company is our people. I’ve had the opportunity to work in other companies, in companies that I’ve seen great people, but here is kind of a very wide. There is kind of a specific profile for the people that works here. I think the people feels the colors of the company and that makes them give the extra mile.

Obviously, you need to be ready for your position wherever it is. You need to have the knowledge, but the attitude is simply very important, this extra mile and to differentiate because in the end, as a logistics company, we have basically people, technology and processes. We are an asset-like company, like we should be because we want the best for our customer. We don’t want to sell our customer our assets, we want to sell them our solution. We don’t want to sell, we want to help them to be more competitive. And by helping them to be more competitive is when we expand our business. So I would add that note, that our people is really, really important.

April Chapman:
Yeah. Their successes are our successes and we are the behind the scenes partner. Okay, so we’re going to be closing out today, but I want to leave our guests with how us expanding and investing in Brazil will help drive our company. One of our company Maxims, which is a driving kind of guiding principle in our company. Our number one Maxim is being the best order management provider in the world. So, I’ll take the top thought from both of you. So, who wants to go first?

David Juarez:
I can go first because it’s a field that I know pretty well. I’ve been like 15 years on that field, on the order management side. And I think that our aim is to be the best order management in the world. My reply to that is that we are already the best order management in the world. We want to show that to more customers and they truly understand what is the value of that. Order management is somehow a word that has been misused for so many years, which is basically giving visibility to a shipment, but that’s not really what matters. What it matters is to bring competitiveness to the customer through the order management because that ends in a lot of things that will bring this competitiveness to the customer. And that can happen from basically, two ways.
One way is to reduce the cost of the operation. That can be from many angles. And the other one is to increase the customer satisfaction, which will increase the top line of the revenue. Our order management is our priority. We are on the tendency of the market. If you look at the tendencies, logistics tendencies and you’ll see automation, digitalization, sustainability, increase customer experience. Wherever is your priority, order management has a very impactful role within tendencies and also objective for the company. So, we want to be recognized, I would say, as the best order management, but I truly believe we are already there.

April Chapman:
You may be a little biased, but I agree. So, Fernando, what about you? What is your thought on that?

Fernando Encinas:
I totally agree with David, I agree 100% with David. These past years, it’s been so much volatility and unforeseen events, we got used to this disruption, as the new normal. So we even had the black swans and we’re still surviving out there, but I think everyone knows that today you have to adapt, you got to be flexible. And everyone’s talking about it, but I think order management, it’s kind of like an integration with your customer. It’s like you’re being part of their backbone. That’s one of the most principle parts of your body and that being said, you are integrated and you have a certain responsibility which is helping out and giving that visibility. And if you’re able to integrate that customer value creation through a digital customer experience, which is PO management, is order management is what we’re doing. And so you got your modeling, you got your vendor collaboration, you got your management and that analytics and you put all that together, you’re really going to make that voyage successful.

That life cycle of a PO from birth all the way to delivery, if we’re able to accompany that with pre-alerts with even changing scenarios because something happened at some port, there’s congestion. You got to move that container another way, you got to put it on an airplane. We’re able to do that. And today, with the technology that we have, each time it’s easier to really change the settings and the possible scenarios that you’re facing. So that’s a really good thing.

And on top of that, I really want to finish that we have the order management excellence, but if you mix that as well, you put it in the juice box with the logistics infrastructure that we have, with the execution power that we have, and the knowledge that we have, you really get a strong integrated product that’s able to accompany you, that’s able to adapt with you, and that’s able to deliver. I think that’s where APL Logistics is today, it’s really strong.

April Chapman:
That’s a great thought. I love that. Okay, one last question for you. How do I say thank you in Portuguese?

Fernando Encinas:
Obrigada.

April Chapman:
Well, then, obrigada. Thank you both for joining me today, it’s been very interesting to hear about everything that’s going on in Chile and Brazil. And for all of you out there, join us next time on the APLL Pulse Podcast.

If you like what you heard or if you have any questions about today’s episode, reach out to us at global_marketing@apllogistics.com. Make sure to subscribe to us on your favorite podcast apps. You’ll also find us on LinkedIn or visit us @apllogistics.com. We’ll see you next time on the APLL Pulse Podcast.

 

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