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TBY talks to Jimmy Avendaño, General Manager of Port to Port International, on technological changes in the industry, building the right infrastructure, and meeting a critical societal demand.
BIOGRAPHY
The General Manager of Port to Port International, Jimmy Avendaño has a degree in civil engineering from the National University of Honduras (UNAH) and a graduate degree in transportation management from the University of Twente in the Netherlands. At the latter, he conducted research projects in risk and project management as part of his doctoral studies. He has also held important roles in the public and private sectors in Honduras, the US, and the Netherlands.What has been the evolution of your specific market niche?
Used car dealers in Central America used to have to travel to the US to bid for cars in person; a one-stop solution was needed. 19 years ago, our founder Anabel Panayotti saw an opportunity whilst working with Dole at one of its ports in Delaware. She opened a one-stop shop for used car dealers that would handle everything for them. Dealers would purchase the cars, and we would bring them from the auction to their facility, deal with all the customs, titles, and receipts, load the cars onto the containers, and ship them to their final destination in Central America. Used car dealers, therefore, only needed to go to the auction and bid for cars, after which we would take over. The synergy with steamship companies is that they have cargo going northbound to the US to unload and would return with a load carrying our clients' vehicles back to Central America.
Were the vessels previously returning to Central America with no cargo?
The steamship companies that owned the vessels would have to find cargo for their south-bound route; however, in many cases the containers returned to Central America empty, which was an added cost for them. Our Non-Vessel Operating Common Carrier (NVOCC) license allows us to book and ship cargo on these vessels. As an NVOCC, we must fully comply with all regulations set forth by the Federal Maritime Commission; therefore, we have all the legal rights and can operate as per any shipping company.
Has your model been imitated by the competition?
It has. For many years, we have been the main exporter out of the Port of Wilmington; however, we are not unique and have other competition. There is one main competitor and another one or two smaller companies, though we pioneered that niche market out of the Port of Wilmington.
What is the main driver of growth, the supply of vehicles or local demand?
Growth is based on local demand in Central America. We rented a larger property that we later purchased and have been expanding and acquiring more land. We currently have 23 acres of land, two warehouses, and office space. Out of Delaware, the maximum capacity we can store is about 2,100 vehicles and we are currently receiving an average of 500-600 vehicles per week and are easily shipping 150-200 containers per week just out of Wilmington.
Are those volumes trending upward?
They are, and it is interesting how business evolves. Since the early 2000s, 90% of our clients do not even go to the US anymore. They just do all the bidding online from their offices here. Technology has changed the business over the years, and in the past three to four years we have experienced significant growth in the Central American region. YoY growth, measured by containers shipped, has increased 30%, a significant figure.
Which market contributes the most to that growth?
The two main markets are Guatemala and Costa Rica, which make up 75-80% of total shipments over the years. Most of the vehicles will be for smaller car dealers. Used cars meet an important part of our society's needs as the middle class is growing and not everyone can afford a new car.
Do you anticipate any government measures to stem San José's congested traffic?
The traffic problem in Costa Rica happens everywhere to different degrees and how the government tackles it is important. One way is to set up import restrictions through tariffs or limiting certain cars from going into the city center on certain days. These might help in the short term; however, in the long term it is all about investment in infrastructure. In some cities, there are many cars on the road but no traffic jams so it all depends on the quality of infrastructure.
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