Oscar Andreani, President, Grupo Logístico Andreani: Interview

Interview: Oscar Andreani

How is technology impacting Argentina’s logistics industry, and how is the private sector adapting?

OSCAR ANDREANI: There is no doubt that the future of parcel logistics will be affected by e-commerce consolidation. This situation has radically changed the business model of all logistics companies and forced us to adapt our internal operations to the digital world. The sector is becoming more technological in order to satisfy the growing demand of customers. The internal training of a company’s workforce is particularly important, and employees need to be provided with the necessary tools and knowledge to be able to perform and deliver in a digitised environment. This requires strong investment from the private sector, as well as greater action coming from government and public entities.

Technology, in its broadest sense, is also having a strong impact on the retail side of logistics by requiring that all physical branches evolve with the digital world. We are currently experiencing a logistics revolution in the supply chain. As of today, we not only need to plan and prepare ourselves for the next few decades, but also to formulate clear policies with a long-term vision to ensure continued development.

What is the relationship between logistics and real estate, and how is it evolving?

ANDREANI: In some cases the opportunity for synergies between logistics and other sectors of the economy arise according to customer demands. Today, speedier services, along with greater communication and better technological connections, are required. All of this can be achieved much more effectively by providing a physical space for companies with integrated logistical capabilities, making synergy with the real estate sector more important. It is a concept that is gaining momentum in Argentina, although only a few companies have the capability and financial capacity to provide the large areas required to implement the business model successfully. The benefit for the internal operations of companies is two-fold: first, it encourages saving on logistics costs; and second, it provides for greater security on their property.

About 95% of cargo is transported using trucks; what expectations are there for the development of railway freight transportation?

ANDREANI: Trucks are set to have a renewed importance in freight transport with the increase in road train capacity to 160 cu metres. That said, there are different types of logistical needs, and different transportation modes apply in each case. For long-range freight transportation, for example, the use of railways should be encouraged; however, this would first require significant infrastructure development.

Trucks and trains can coexist perfectly well, and there is no reason why growth in either segment would diminish activity in the other. A number of production areas don’t even have direct access to the railway network, generally speaking, but can be accessed by trucks, which carry the goods to the train. Trucks will never become obsolete. On the contrary, employment and activity in road transport is expected to increase.

How do you evaluate Argentina’s efforts to reinstil confidence in foreign investors?

ANDREANI: Argentina is working towards garnering more international investment credibility. This process is taking some time and effort due to more than a decade of market closure. However, given our country’s vast resources and renewed business spirit, it is generating great expectations worldwide.

International investors are constantly evaluating Argentina’s investment climate, although some are still reluctant to engage because of recurrent volatility in our macroeconomic factors. We definitely have challenges to overcome; for example, we need stronger legal security with a clear and predictable regulatory framework, but we are on the right path.