TRIPLE EFFECT

Ecuador 2012 | TRANSPORT | INTERVIEW

TBY talks to Armando Castellanos, Executive Dynamizer of Servientrega Ecuador, on strong brand positioning as a business strategy and introducing innovation to the logistics sector.

Armando Castellanos
BIOGRAPHY
Armando Castellanos has worked with Servientrega Ecuador since 1994, in the positions of National Logistics Manager, Administrative and Financial Manager, and now Executive Dynamizer. Before working with the company in Ecuador, he served as Manager for the Tolima Region for Servientrega Colombia from 1989-1994. He graduated with a Bachelor’s degree in Political Economy from the Universidad Libre in Pereira, Colombia in 1988.

What market factors led this Colombian company to expand its regional reach to Ecuador?

Ecuador was clearly experiencing an economic boom during the 1990s, and it borders Colombia. Therefore, it was a natural move for the company. Also, the Colombian market had already matured and we needed new challenges.

What business strategy has the company implemented in Ecuador over the years?

When we first arrived in Ecuador, we saw that the main strength of the leading company in the logistics sector was strong brand positioning. However, the company was very much out of date, especially in terms of new technologies and coverage. Therefore, after extensive market research, we focused on covering the gaps and needs in the market, offering high-quality standard services; something the country lacked. Since then, we have grown in capacity and business volume, and I think one of the hardest challenges over the years has been to recruit people with a business philosophy close to the company's standards and values. In this regard, we are a very important provider of jobs and training opportunities in the country; we currently employ over 1,370 people directly, and indirectly it is at least twice this figure.

How has Servientrega contributed to bringing innovation and technology to the sector?

Servientrega has its own corporate software that has been developed over the years. When we first arrived in Ecuador, we were already able to offer tracking services to all our clients, controlling parcels at every moment through our system. In addition, our entire administrative branch was already very developed from a technological point of view. These factors gave us a privileged position in the Ecuadorean market, optimizing resources and offering very competitive prices. In addition, we have always been a pioneering company in terms of our vehicle fleet, which at the end of the day has given us another plus compared to our competitors.

What is Servientrega's volume of operations in Ecuador?

Our product and services portfolio is very wide and diverse; we have the largest office network in Ecuador, covering all 24 provinces. Servientrega currently offers services for corporate clients, who represent 72% of our overall business activity, and the remaining 28% of our activity is related to the natural logistics market. Our annual revenue in the country is around $24 million.

What are Servientrega's competitive advantages within the corporate segment as compared to its competitors?

This is a business very much dependent on trust and confidence in the companies that offer logistical services. Therefore, reliability is one of our main strengths, otherwise we wouldn't have become a leading company in the sector, and by that I mean timing, transport capacity, storage facilities, and quality standards. We established Servientrega Solutions Center to demonstrate that reason, reliability, efficiency, and trust are key words for us. Another of our main strengths is our knowledge and coverage of the local and neighboring markets, something multinationals operating in the sector lack.

What are some of your most relevant corporate clients?

We provide logistics services to almost the entire automotive sector. We also work with the pharmaceutical companies, as well as research laboratories. Furthermore, we do a lot of work with finance and banking companies, and provide services to multinationals.

How many countries is Servientrega operating in?

Today, Servientrega has very active operations in Colombia, Venezuela, Ecuador, Peru, Panama, and the US. We are currently implementing a strategic project to enter Costa Rica.

What is Servientrega's transport capacity?

Ecuador is a rather small country, and most of our transport is done by road. We have a large vehicle fleet—over 380 vehicles—and its transport capacity ranges between 1 ton and 15 tons. We also do air freight, but this is basically related to fragile parcels and products. At the international level, we operate through our extensive network, especially in countries where we have a presence; for other countries, we have agreements with the most important multinational companies. At the end of the day, what matters the most is client satisfaction in our services, and that's what we aim for, regardless of whether we have operations in that particular country or not.

How many international agreements does Servientrega currently have?

Today, our company works with three different multinationals from the logistics sector, because we do not want to sign exclusivity agreements that would make us dependent on a particular firm. In addition, each one of these companies is stronger in different fields, which allows us to approach them depending on the transport service we need to provide.

What level of investment has Servientrega allocated to Ecuador, and where has such investment focused?

In the last few years, and once the brand was totally consolidated in the market, we have focused strongly on establishing an international center of logistics in each one of the countries we operate in, providing these centers with all the necessary technology and tools to offer the best service possible. At the moment, the company is investing around $8 million in its centers in Quito and Guayaquil, which are expected to be fully operational by 2014. Once these two centers are fully operational and consolidated, we aim to open a new center in Cuenca, the third largest city in the country.

What are your strategic goals for 2012?

We expect to grow at least 20% in terms of revenues during this year. Such growth will be based on the further diversification of our product and service portfolio in Ecuador, and the aggressive process of expansion we are currently undergoing across the country; we have 208 service points in Ecuador. It is a very important moment for us, because we want to strengthen the position of the brand throughout the entire country. For example, we have recently introduced a new service called micro marketing, and it offers large multinationals in the mass consumer sector the possibility to reach remote areas of the country through our extensive distribution and office network, so they can reach new population targets in Ecuador. Micro marketing has given us very positive and promising results, and we believe it will continue to be very successful during this year.