The macro overview 

Currently, there is a global logistics imbalance due to the repercussions of the war between Ukraine and Russia, macroeconomic forecasts, the increase in prices in supply chain, inflation, rise in fuels and covid-19 pandemic consequences. Due to delays and closures in customs in some countries, transport ships were stranded and this hampered the continuity of the supply chain, increasing transportation costs, affecting the final prices to the consumer and quality of services 

The increase in the prices of maritime and air transport represents a crisis for the economy, that affects inevitably the services quality however, Guatemala has a privileged geographical position close to the North American market, its main business partner, and rest of the Americas countries on the Caribbean, and, for the north and south bound corridor on the Pacific maritime traffic for nearshoring opportunities in the region. It also has a stable macro economy, and offers incentives such as the Law on Free Trade Zones and the Free Trade and Industry Zone (ZOLIC), among other favourable aspects. 

Logistics Infrastructure 

Guatemala does not have dedicated logistics centers exclusively to the activity, the current offer is located in industrial zones and especially in free zones, which are used more for logistical support than for industrial activity properly speaking, since the maquila activity applies to throughout the country and is covered by the Law for the Promotion and Development of the Export and Maquila Activity. There are 18 active free zones, the largest located in the metropolitan area of ​​Ciudad de Guatemala, around Quetzaltenango, Tecun Umán and San Marcos, and in Puerto Barrios (the latter rather categorized as logistics shelter). 

The value for Logistics Performance Index*: competitiveness and quality of logistics services (1= low to 5= high) in Guatemala was 2.25 in 2018. During the last 11 years this indicator has reached a maximum value of 2.78 in 2012 and a minimum value of 2.25.  We do not have access to recent data regarding this point but as reasonable average according to the last year’s performance, including general crisis conditions, economics, pandemic 2019 and other variables, is 2.38 (LPI) 

According to the 2016 (LPI), Guatemala is ranked 111 out of 160 countries rated by the World Bank in different logistics areas. His average score was 2.48. Regarding the indicator of quality and competence of logistics services, it was positioned in 130th place with a score of 2.30, and in infrastructure it was the component with the lowest score with 2.20, that is, it ranked 127th. 

(*)https://lpi.worldbank.org/international 

Infrastructure, services and supplies 

Historically, the Guatemalan supply chain has not registered scarcity or lack of products or services. In terms of quality and capacity, it would have to be evaluated on a case-by-case basis. Definitely, as in any system, it can and should experience a permanent improvement process. The Guatemalan system, both public and private sectors, are aware of these challenges and objectively confront them with investments and development plans, agreed between sectors. 

Intra-regional supply is dominated by manufactured products, food, paints, cosmetics, fabrics, plastics, pharmaceuticals, rubber, cement and construction materials. Some products need controlled temperature in intra-regional trade, but its ratio is low. large proportion of the products fresh perishables are transported through the own transport units of the intermediaries or exporters of these products.  

The products are varied and come well from the market national or extra-regional: handicrafts, decorative items, fresh and processed foods, white goods, medical supplies and instruments, cosmetics and perfumery, materials and articles cleaning, furniture and equipment, construction items.  

The light manufacturing sector is a national priority in terms of job creation and value. Guatemala seeks to maintain the competitive position in the yarn segment and garments, and consolidate, grow and conquer markets in the light manufacturing segment (electronic products, automotive parts, batteries, medical instruments), both for export and local consuming. 

Current circumstantial cases, due to the general global crisis of chips and containers, can be identified, e.g. delays of 6 months in deliveries in the local market of the IT sector, computers, laptops, printers and other accessories. 

The opportunity and nearshoring 

Guatemala has the opportunity to compete and actively perform in nearshoring as a tool to attract investment. It is essential that the corresponding authorities work on the improvement of the maritime, air and road infrastructure, as well as on the planning of imports and exports, logistics and strategy of raw material movements. Guatemala has the potential to be a supply centre for the North American market and the rest of Central America, and having the adequate infrastructure depends on this.   

Supply Services 

Guatemala has a growing trend in supply services and logistics resulting in part from the larger size population of the country and therefore of its industrial sector, at the same time than its proximity to Mexico. But as a sector it has a lot of room to develop; e.g. , there is no packing services and sufficient consolidation in centers of storage for perishable products, although agriculture is the largest Guatemalan activity its production focuses on products with very small added value. On the other side, the big players in the Guatemalan agro-business system, just as an example, know and adapt very well to all the specifications including hydro cooling and every phase in cold chain for perishable cargo,  to meet and exceed requirements for export at destination. This gives a clear idea of the fast capacity to perform accordingly in these lay outs. 

Sustainability  

Efficiency is also an issue that will continue to be important within supply chains, operations, services and logistics. It will continue to be necessary to develop more ethical and efficient processes in the use of resources. 

The vision 

This would contribute to the establishment of Central America as a priority at an economic level. To achieve this, it is necessary to: reduce resistance to change, digitize processes, regenerate bilateral agreements, develop human capital and improve customs procedures and infrastructure in ports and airports.