Consolidation of cargo under the International Services Law in El Salvador can result in cost savings. Contact us with your questions.
The Central American Group: Hello. Welcome to another installation of the Central American Group’s series of podcasts. In these discussions, we speak with individuals that are either external to the Central American Group or external to the Central American Group.
Today we have Miguel Flores with us. He is with Loginter, or Logistica Internacional, which is part of the Central American Group. Miguel, can you tell us a little bit about yourself?
Miguel Flores: Yes. I have been in the logistics business since 1985 and I joined Loginter in 2008. Loginter is based in El Salvador. Very soon we will open an operation in Costa Rica in the Central American Group’s Green Park. So, greetings to everybody from Costa Rica.
The Central American Group: Well, thanks a lot. It must be beautiful down there.
We have several questions that we would like to ask you today having to do with the services that are offered in both El Salvador, and very shortly, in Costa Rica. Let’s talk about consolidation of cargo under the International Services Law in El Salvador.
Can you tell us about this service?
Miguel Flores: Yes. This Law was especially designed several years ago in El Salvador. It was implemented about the time I began with Loginter. It was done specifically for consolidation. The Law allows for cargo to come to our facilities from different shippers that are manufacturing products in El Salvador. They bring their goods to our facilities.
We receive partial cargos from different vendors. Then, as soon as we have enough cargo to fill a container, we do the consolidation of cargo under the International Services Law in El Salvador. The next step is that we export the cargo. In this manner, several vendors can use one single point of origin. Doing this increases the efficiency of containers, so that there is no unused space.
This creates control over the cargo on behalf of the buyers, as well. Because once the cargo arrives at our warehouse. The buyer has full control over it. They are the ones that decide when and to where the cargo will be shipped. Already, for example, we have cases that we are going to call “multi-country consolidation.”
This means that one buyer that is producing goods in other countries in the region such as Nicaragua, Honduras and Guatemala can take advantage of consolidation of cargo under the International Services Law in El Salvador. Following this Loginter can ship the cargo to its final destinations. We currently use this model for one American company to send to markets that are not typical for us such as Australia and emerging markets. This model has been proven and tested by us and by our customers. Also, the Law of International Services allows us to get cargo from local companies that are located in free zones or are operating under “stand-alone” regimes. We can collect cargo from any country that is working in El Salvador. That, in a general sense, is the idea of consolidation of cargo under the International Services Law in El Salvador.
The Central American Group: What are the advantages services for the consolidation of cargo under the International Services Law in El Salvador?
Miguel Flores: For example, you can have one single shipper sending cargo to multiple consignees. These shippers can send the cargo to our facility. Then we segregate the goods and we dispatch to cargo based upon the purchase orders that the vendor has produced.
Shippers can send partial cargo to our facility. They do not to store the goods in their facilities. Our customers use Loginter’s facilities as an intermediate warehouse. The vendor is using his facility as a production plant, not a warehouse.
Another example is that there are some cases that the vendors are producing partial cargos. These are quantities of goods that will not fill a container. We can collect goods from these companies and send it them to one specific locations. Consolidation of cargo under the International Services Law in El Salvador creates a savings for the consignee or for the buyer of the cargo. Additionally, the INCOTERMS can be flexible. Instead of using DDU Miami, the customer can use CFS Loginter. Once the cargo enters the facility, it is under the control of the buyer. The vendor then receives his payment, but the cargo is fully under the buyer’s control. Under these conditions with the consolidation of cargo under the International Services Law in El Salvador, the purchasing party has great visibility of what they have in El Salvador. The buyer does not need to wait until he opens his containers at their destination warehouses and distribution centers in the States. He will know exactly what is inside of the unit.
The Central American Group: What kind of businesses would use the service of consolidation of cargo under the International Services Law in El Salvador?
Miguel Flores: The government of El Salvador created this law to try to cover all of the different types of businesses that are found in the country. This mechanism can be used by a local Salvadoran company or any company that is located inside or outside of a free zone. Any producer of goods can use this service.
The Central American Group: Who else can do consolidation of cargo under the International Services Law in El Salvador?
Miguel Flores: This can be done only buy logistics companies such as Loginter. This law is a strict one. We spent a year fulfilling all the requirements and all of the authorizations of the government institutions in El Salvador. Licenses are given only to companies that have demonstrated that they comply with local laws and with regulations related to safety, infrastructure, and human resources. Only companies that are authorized carry out the consolidation of cargo under the International Services Law in El Salvador can operate as such.
The Central American Group: Do you have any customers currently operating under the International Services Law in El Salvador?
Miguel Flores: Yes. We have one customer that has been operating under the International Services Law for two or three years. It is a very famous US brand that have different vendors working in El Salvador. They changed the INCOTERMS and now, once cargo is delivered to Loginter, they have full control. We receive trucks large and small from three, four, or five different vendors. We get the cargo. Then we start scanning the cargo, that is we scan each box that has been delivered to our facility during the week. Then we transfer this information in a file to our customer’s system, so they have the visibility of what type of cargo is warehoused in Loginter. Following this they communicate to us which purchase orders need to be dispatched to various destinations in the United States. We are working under conditions of just-in-time delivery. The customer is cutting its warehousing expenses in the United States. Of course, it is less costly to warehouse goods in a facility in El Salvador than one in the US. In other words, we act as our customer’s warehouse in El Salvador. Additionally, we act as their eyes and their control in the region. For instance, if we see a box or a label that has been damaged, we immediately inform the shipper so that they can rectify the situation. We ensure that the shipments are processed free of problems.
The Central American Group: Miguel, one last question: you mentioned to us that you are speaking with us today from San Jose, Costa Rica. You also mentioned that you are already up and running and have been for several years in El Salvador. When do you expect that operations will begin in Costa Rica?
Miguel Flores: We have already received authorization from Costa Rica’s Procomer. We are going to operate a facility for the consolidation of cargo under the International Services Law in El Salvador with our partners at the Green Park. The warehouse that we will operate in is almost complete. We are now working on the distribution of the racks, the location of the cargo receiving areas, and other small things that need to be clarified.
In the big picture, we are planning to open the Costa Rica operations in January of 2020. This is because we have already completed the entire process that the authorities here request that we abide by. Fortunately, thanks to our experience in the group and to the lawyers that we have to guide us we are on schedule. The lawyers have done a wonderful job. Basically, in a few months I hope that you will be invited to see our opening.
The Central American Group: That’s great. We have been talking about the consolidation of cargo under the International Services Law in El Salvador. What are some of the other services that Loginter offers?
Miguel Flores: We can, for example, provide customs clearance for inbound shipments and the last mile of the cargo. This means that we have two trucking companies that can bring containers from the port to our warehouse. Again, this is for inbound.
Also, we can do the last mile from our facility to the port. So, we have trucking companies dedicated to these kinds of services. We work with companies that provide freight forwarding. We have succeeded in signing preferential contracts with all of the shipping lines that operate throughout Central America. This makes us very competitive when it comes to ocean freight in the region. In effect, we can cover all the services that are required by companies that are seeking to do business in the region. We have the contracts and the partners that give us the support to be able to cover the area.
The Central American Group: That’s good to know and we know that, perhaps, there are individuals that are listening to this podcast that may have additional questions related to Loginter and its services. That being the case, how would someone with a question get into contact with you?
Miguel Flores: Please go to www.thecentralamericangroup.com and navigate to the form on the website’s contact page. Immediately, one of our people will contact you to speak to you about your needs in the region.
The Central American Group: Again the URL for the webpage is www.thecentralamericangroup.com. Miguel, I want to thank you for taking time out of your busy day to speak with us. It has been a pleasure, as always. We hope that you have a nice day, and we wish you well.
Miguel Flores: Many thanks. As the Costa Ricans say “Pura Vida.”
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