TBY talks to Liborio Cuellar, General Manager of Hamburg Süd Colombia, on the need to develop the transport network and the opportunities the US FTA presents.

Liborio Cuellar
Liborio Cuellar was born in Bogotá in 1960 and attended Hobart College New York to study Political Science in 1982. He later graduated from the Sorbonne in Paris after completing his studies in French Language and Civilization. Cuellar began his career at Flota Mercante Grancolombiana as a trainee before moving up to National Sales Manager in 1997. He then went to Tampa Cargo to become Vice-President of Sales and Marketing before moving to Hamburg Süd Colombia as Line Manager in 2007 and later became General Manager in 2012.

What are the main challenges in the shipping industry?

Colombia has issues with logistics and infrastructure. There is a positive thing in all this, and it is that the ports are well developed. Cartagena's port is state of the art, and so is Buenaventura thanks to the new port TCBuen. The problem is moving inland; as it is very costly and approximately double the price. We really need to work on this. However, the biggest challenge for Colombia's growth is the continuing development of shipping and transport. A lot of people ask me, “Why is everything in Bogotá, and why do we need to move cargo in and out of Bogotá?" And there is no answer, but we have been centralized for years. We can't travel more than a thousand kilometers over really difficult terrain.

What impact will the recent free trade agreement (FTA) with the US have in Hamburg Süd's operations in Colombia?

If you monitor all the FTAs, there will be a huge increase in imports and exports; we have seen it in Chile and Mexico. So in the short term, what you will see—and what we're already beginning to see—is that there will be an increase of about 30% to 40% in import volumes. However, the long-term impact—the real significant impact for Colombia will be in exports, and that takes many more years to develop. Historically, FTAs in Latin America triple trade volume in three to four years. And we're looking at establishing free trade with the largest consumer market in the world; 40% of all goods in the world are bought by the US.

What sectors represent higher revenues for Hamburg Süd in Colombia?

We move slightly more imports than exports. Let's say 60% imports and 40% exports. In the import sector, we're involved with anyone you could mention. For example, one of our biggest accounts is Mazda. We also carry Renault, Falabella, Exito, Samsung, and LG. Most of them come from Asia, over 30%. We also move a lot of cargo from Brazil. There is a huge import of Brazilian sugar to Colombia, even though Colombia produces a lot of sugar. And from the US, we import anything and everything. Generally, we import finished and manufactured goods, and they all usually pay good freight rates. On the exports side, Hamburg Süd is the largest shipping line for coffee. We also move a lot of resin from the industrial sector of Cartagena. The sector that pays the best freight is refrigerated cargo, which is a sector that we are very active in. We are the second largest shipping liner in the world that moves refrigerated cargo. For example, we are moving flowers to the UK. That is a sector that has great potential for development in Colombia. Peru is the single largest destination for iron, followed by Ecuador, Chile, and Mexico. Exports to Venezuela have decreased a lot. The main places Colombia exports to are regional or interregional.

“The sector that pays the best freight is refrigerated cargo, which is a sector that we are very active in."

According to the National Business Association of Colombia (ANDI), maritime transportation in Colombia increased around 17% last year. What is your outlook for container shipping over the medium term?

Historically, container shipping has been a very easy industry in which to track growth. This sector has grown at 10% for 20 years. It looked like it would remain that robust forever until we felt the effects of the economic crisis in 2009. GNP dropped to 1%, and volume dropped 10% in 2009. It drove everybody crazy because we were growing at 10%, and suddenly we had a 10% drop. Even though the sector rebounded in 2010, growth was about 7% to 8%. Worldwide, the shipping industry has some problems; it is losing money. It is important to understand that world economic growth has been based on globalization, and it has been possible because of the low cost of transportation. Shipping is a weak link.