Free Trade Agreement to be ratified by end of year; market prospects look bright

Ecuador: "China is our future market"

The Logiztik Alliance Group is an international logistics and freight forwarding company headquartered in Quito, Ecuador, with offices in the main entry points of Colombia, the USA, Netherlands, and China.

"Our most important markets are the US, Europe, and China. We try to locate on the product side, for example, flowers, fish, seafood, and other products, mostly perishables. We have warehouses near the main airports in the countries we operate in. The exporter or supplier will deliver the product at our facilities), then we consolidate the process the products and manage the logistics process."

"In our warehouses we do some processes, including quality checks, labeling, repackaging if needed, logistics processing regarding the documents. We do coordinate via sea or air. We also keep track of the cargo until it reaches its final destination. In the US and Netherlands, we have warehouses at the destination point too. In other markets like China we work with local brokers”, explains Maria Ines Dominguez, marketing director at Logiztik Alliance Group.

"We offer logistics services tailored to specific products and markets. We provide our customers with complementary services that differentiate Logiztik Alliance Group from its competitors. By using technology in all stages of the logistics process, we deliver technological solutions that help our clients operate safely and efficiently," continues Maria.

"For several years, we've been ranked as the leading air cargo agency in Ecuador. In 2021, we moved more than 90,000 tons of goods from Ecuador and Colombia to markets such as the US, the Netherlands, and China. We handle and transport fresh and preserved flowers, fruits, and fresh fish, among others. These products maintain an incomparable quality due to the geographical conditions of the region in which they are grown. For this reason, they are attractive worldwide, especially to Asian consumers. Some of the stand-out products in this market include fruits such as pitahaya, passion fruit; flowers such as hypericum, gypsophila, and roses; and many others," according to Maria.


Produce from Ecuador is increasingly finding their way to Far Eastern markets

Effects on trade due to the Russia and Ukraine conflict
In addition to being one of the largest importers of flowers from Ecuador, Russia and Ukraine are also among Colombia and Ecuador's largest purchasers of fruits such as bananas, pineapple, avocados, and others. As a result, the effects of the conflict on both industries have been significant.

The devaluation of the ruble has caused the prices of goods to rise, resulting in stagnation in foreign capital flows, curtailing consumer demand, and disrupting normal market conditions.

Maria explains: "Despite the unstable environment, most of our customers have been able to overcome the challenges and regularize their operations. Others have had to leverage local markets and markets in other regions in order to export their products." 


Ecuadorian carambola yellow pitahaya, red dragon fruit, and kaki fruit for international markets 

China as a future market
China is Ecuador's second most important trading partner. A negotiated tariff reduction could present an opportunity to expand the flower and fresh produce trading. For example, the reduction of tariffs on certain products—such as Flowers (10.6%), Other Fresh Fruits (20.9%)—is estimated to generate export earnings of more than US$28 million, as well as the opportunity to increase flower and fruit exports to China by introducing unique varieties previously unavailable in Chinese markets.

Opportunity for growth
For the company, Latin America provides great opportunities for growth, as the infrastructure and leadership are available to make the most of the commercial impulse that will be provided by the China Ecuador FTA—which is expected to be finalized by the end of this year.

In addition, the decision to import pitahaya from Ecuador directly to mainland China is an opportunity that many horticulturists have been anticipating. The company has been handling this product for several years and has the experience and temperature-controlled infrastructure to take on this new challenge. In preparation for this decision, we are making ourselves aware of its implications, which will surely prove beneficial for both regions. 

Challenges in doing business with China
Maria concludes: "Building business relationships in the Chinese market can be challenging due to geographical, cultural, and language barriers, but those barriers are not insurmountable. These challenges are important for businesses to overcome because China will always be an influential player in global commerce. On the other hand, recent logistical distortions have generated concern in companies dependent on trade with China, which may affect commerce in the medium and long term. However, for Ecuador and Colombia—due to the nature of their trade with China—the future appears promising."

For more information:

Maria Ines Dominguez
Logiztik Alliance Group
https://www.logiztikalliance.com/ 
marketing@logiztikalliance.com 


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