Asia Shipping wants to become ‘the biggest digital integrator in Latin America’

Multinational Asia Shipping, which claims to lead trading of full-container imports from Asia to South America, is about to launch a cargo tracking platform, hoping to succeed where IBM and Maersk’s TradeLens system failed.      

The Santos-based company says its maritime exports grew 40% year-on-year between January and October 2022, handling 30,760TEUs. In imports, it claims to be the biggest integrator in the region, handling 109,960TEUs.

In this interview, Rafael Dantas, head of sales at Asia Shipping, talks about the future of logistics in the region, supply chain bottlenecks, technology servicing and nearshoring.

BNamericas: What is the current size and operating volume of Asia Shipping in Latin America?

Dantas: We are the leader in trading full-container imports from Asia to South America. In full-container export, we went from 38th position in 2019 to second in 2022 in volume terms.

In consolidated cargo, which is also an important segment in foreign trade, Asia Shipping is also second. We intend to be the largest port-to-door courier in Brazil, speaking of container delivery.

We are a multi-modal company, focused on bringing scale, but mainly with a lot of technology, to customers. Because we know that the market has a lot of difficulties, especially in terms of technology.

BNamericas: What technologies exactly?

Dantas: We work with APIs [application programming interfaces] to facilitate the interface between systems. In February, we are going to launch a new multi-platform tracking system.

Because we all work with multiple suppliers in the logistics chain – carriers, ports, terminals airports – we are launching a platform to connect all of this with the aim of anticipating events. What is the big problem today in the supply chain? It is that it lacks full visibility; it does not have all the correct information to rely on.

For example, if cargo is coming from China to South America and due to an operational situation there is a transshipment, which is a technical stop by the shipowner, this cargo usually ends up changing ships. The problem is that often this new ship was not foreseen on the shipowner's platform, and this can cause a series of planning problems.

Now we are going to launch a tool, AS Tracking, to connect this information and avoid this type of bottleneck. We are taking all this data, using our big data, which we call Asia Intelligence, to anticipate these events and bring greater predictability to the supply chain.

BNamericas: Was this tool completely developed in-house or built upon market software?

Dantas: It was completely developed in-house so that we can manage the multiplatforms we use.

BNamericas: But a key obstacle to implement a single platform in international logistics has been use of different systems from different players like customs, ports, terminals. How will your tool work? 

Dantas: This lack of integration is a major chain problem, in fact. We have been working on this project for a few years to bring this pervasive visibility.

We are going to do this through various systems, such as the CW-1 [CargoWise One], which we and several shipowners use. Other platforms, which other operators use, will also be plugged into. We will get this information and bring it all to AS Tracking.

At the end of last year, Maersk announced the end of TradeLens, which aimed to bring more precise visibility into the supply chain. What TradeLens would like to have done, we will deliver.

Editor’s note: In 2018, Maersk and IBM announced the TradeLens blockchain-based platform to reduce global transit times, unify cargo data and reduce bottlenecks. But not enough big players signed on. TradeLens will be shut down by end-March.

Our platform is a little more advanced than TradeLens. We took on several suppliers, many systems, and we are putting it all together to bring this visibility to the customer.

And this is part of a strategy. We want to be the biggest digital integrator in Latin America. It is our goal for the next five years.

BNamericas: Are freight prices now normalizing and containers and ships more readily available?

Dantas: The transit time for shipowners is heading toward normality. It keeps getting better.

We see freight values gradually returning to pre-pandemic levels, which was expected by the market. In 2023, possibly, we should still have higher annual average freight values than before the pandemic. It has now taken a dip but is expected to rise again due to issues in Europe, recession-like scenarios in the US. These markets strongly drive demand, dictate the global market and therefore impact freight rates.

In Brazil, we are starting 2023 with a general cargo volume in the industry very similar to that of 2022, even a little higher right now. There was no abrupt change in the market. But as I said, freight rates are mainly influenced by the global market. Brazil only represents 2.5% of the global cargo volume. 

For 2023, we expect a substantial reduction in the values that importers have been spending in 2021 and 2022. 

Overall, speaking with customers and companies, I would say the main trend for this year is greater digital and multi-modal integration.

BNamericas: And what can be expected regarding internal, regional demand?

Dantas: Exports will likely drop [in Brazil]. We are anticipating some 10% in overall export decline.

Thinking about the US, for example, Brazil exports a lot of wood, and the construction and home sales sector there is slowing down. For imports, we project an increase of at least 5% compared to 2022.

BNamericas: That’s all based on the current situation...

Dantas: Looking at today’s picture. A lot can change, of course. 

Anyway, regarding the [Brazilian] government, in terms of consumption, everything indicates that there will be greater spending stimulus. This will end up being positive for the import market.

BNamericas: How do you evaluate the increasing presence of Asian, and especially Chinese companies in the Latin American e-commerce market?

Dantas: Ten years ago, China was seen as a hub of low-quality products. The Chinese government has set itself the goal of changing this over time. And today, we see consumers valuing these products more.

In Brazil, 60% of everything that enters the country comes from Asia. It was a bit like this before. But these products came in the past mainly through other well-known brands to the Brazilian market. What has changed is that Asian, Chinese [players], are now going straight to the end consumer with their own brands. And this is a trend that is here to stay.

Chinese companies will increasingly seek the end consumer and try to break down this midfield axis in the chain with local companies [distributors]. And the digital market is the perfect platform for this. This is practically the same for all markets in the region. 

BNamericas: But aren’t tax and regulatory issues also at stake?

Dantas: Well, there is a situation, which has already been brought to our foreign trade agency in Brazil, which is the fact that some of these international websites use bypasses to avoid paying taxes.

This ends up bringing a somewhat unfair competition to importers who bring all their goods paying the due taxes. Be it a multinational, a mid-sized importer or a small importer. This causes great loss to the Brazilian economy.

BNamericas: Wasn’t this situation worse years ago?

Dantas: Actually, I see it worsening, not lessening. 

We're talking about [Brazil's] tax-exempt legislation from the 1960s on the import of small amounts, of small values. The core of this legislation remains in place. And companies that have this last-mile agreement with [national postal service] Correios are using it to avoid paying taxes. We all would also like to sell cheaper. So either that changes or tax is removed for everyone.

BNamericas: Which other logistics and supply trends will we see in Latin America this year?

Dantas: We are seeing a very large movement toward nearshoring in countries like Mexico and possibly Brazil. This was there before, but with the supply chain broken by the pandemic, nearshoring has moved to the top of the agenda.

This reallocation of global productive processes will benefit Latin America as a whole. But the country that will do very well on this front, without a doubt, is Mexico.