1. Introduction. 1.1. Profile of Ecuador2. Ecuadorian Transport System3. Challenges of Logistics in

Ecuador.

Content:

Presented by: Norma F. Castillo Almeida.

BCM 2011

Current situation of Logistics in

Ecuador

1. Introduction.

1.1.

Pro

file

of E

cuad

or.

Regions of Ecuador.

1.1.

Pro

file

of E

cuad

or.

General Information.

President: Rafael Correa (2007)

Land area: 276,840 sq. km

Population (2011 est.): 15,007,343

Total area: 283,560 sq. km

Capital (2009 est.): Quito 1,801,000

Monetary unit: U.S. dollar

Largest cities: Guayaquil, 2,634,000

1.1.

Pro

file

of E

cuad

or.

Economy of Ecuador.

2. Ecuadorian Transport System

The Transport Systems used in Ecuador are:

1. River Transport.2. Pipelines.3. Rail Transport4. Sea Cargo Transport5. Air Cargo Transport

2. Ecuadorian Transport System.

• The Internal Transport system depends mainly on the Road Transport.• Rail transport is virtually does not exist.• River Transport is confined to limited geographic areas.• In the international market; freight moves predominantly by sea and air

modes.• The main ports are located along the Pacific coast and from a geographical

point of view, cover the needs of the country.

Map of Ecuador and its Transport System

• Most used by the people that live in the coastal zone in the east (amazon region).

• Medium and small size boats are used to capture goods/products (shrimp, fruit, etc.).

• During July of this year, a new River Route was inaugurated between Manta and Manaus in Brazil across the Amazon and Napo River.

2. 1. River Transport.

2. 2. Pipeline.

• Pipelines carry oil from the oil exploration areas located in the Amazon Region.

• The largest pipeline is called Trans-Ecuadorian Oil Pipeline System (SOTE) and moving towards the city of Esmeraldas .

• They belongs only and exclusively to the Ecuadorian government.

• It was estimated that up to 100,000 bpd of potential production was shut-in because there was no way to export it or transport.

• In 1997 the government of Ecuador made plans to build a new heavy crude pipeline.

2. 2. Pipeline.

• In the late 1999s, the Ecuadorian government worked with five private oil companies:

1. US based Occidental2. Arco, and Oryx3. Spain's Repsol4. YPF5. Canada's Pacalta.

• Construction of the pipeline was expected to take an estimated 18 to 20 months and cost about $400m.

• The pipeline had an initial capacity of more than 100,000bpd, which was quickly expanded to more than 450,000 bpd.

2. 3. Rail Cargo Transport.

• The Rail Transport was very important during the early 90’s .• It is used Carry about 60,000 tons per year.• High maintenance costs and lack of government support forced it to

stop working .

Rail Transport. Cargo transported by Years (In Tons)

2. 4. Sea Cargo Transport.

• Exportation: Guayaquil, Esmeraldas and Manta, Puerto Bolivar, Salinas and La Libertad.

• Its infrastructure has been improved during the last five years.

• In the country about 70% of the volume of cargo is carried by Sea transport.

• This transport is the most used due safety and economy.

• Importation: Guayaquil, Esmeraldas and Manta.

2. 4. Sea Cargo Transport.

• South America has 16 ports, and the Port of Guayaquil is on the top 5.

• In terms of services offered by terminals, the Ports of Cartagena (Colombia) and Guayaquil were rated as the best in performance.

• The port of Guayaquil is the cheapest port of the region and Cartagena is the most expensive (75% more) .

Sea Transport. Cargo transported by Years (In Tons)

2002

2003

2004

2005

2006

2007

2008

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Goods Transported

Year

Tons

2. 5. Road Transport.

• It is most important transports system used for Internal or domestic transportation of goods.

• In 50's the country had only 11,963 km and after 50 years this capacity has quadrupled to 43,670 km of highways.

Road Map

2. 5. Road Transport.

• For Road transport, the most type of vehicles used are trucks, vans, platforms, mules, and heads, as transport units all types of containers.

2. 5. Road Transport.

• Road Cargo Transport is used more frequently to export products/goods from Ecuador to Venezuela, Colombia and Peru.

• Informal Transport is used more often than Formal Transport System.

24 days 7 days

$ 380 – 400 USD $150 USA

Road Transport. Cargo transported by Years (In Tons)

2. 5. Air Transport.

• Ecuador has two major airports (Guayaquil and Quito).

• Has a rate of approximately 10 million Kilos yearly average .

• Used especially for perishable unfrozen goods, only to be refrigerated and whose life is a few days or hours, also for products of extreme emergency.

• In Ecuador the most import Logistics companies are: DHL Cargo LAN Cargo IBERIA Cargo UPS charges FEDEX Cargo

3. Challenges of Logistics in Ecuador

3. C

halle

nges

of L

ogis

tics

in E

cuad

orTransportation Infrastructure

• Strong orographic constraints in the country.• Roads and seaports are not well maintained by the Ecuadorian

government. There are airports that have stopped working for lack of funds and are in complete abandon.

• Severe problems of road safety

Logistics Infrastructure

• No ad hoc Infrastructure.• Low support from public sector.• Few companies are specialized in logistics and transportation sector

highly fragmented.• Lack of programs for training about Logistics.

3. C

halle

nges

of L

ogis

tics

in E

cuad

or

Legal / institutional • The many processes of regional integration have not yet been

translated into real benefits for the sector• Inefficiencies persist border crossings• Weak sector institutions

Consumption / Costs

• High logistics and not supported costs.• There is no culture of outsourcing logistics

Technology• Lack of use of appropriated Information Systems to manage Logistics

in the companies• Minimal use of tool positioning (GPS) and tracking of cargo.

? Questions?

What’s Your Message?Thanks for your attentions.