Export logistics in Colombia

Requirements to Obtain ICA Export Permits

• Submit a sanitary permit request to the ICA (Colombian Agricultural Institute).
• Complete the product registration declaration process with ICA.
• Provide detailed information about the production and handling of the export goods.
• Ensure that products are inspected and labeled according to current regulations.

National Institute for the Surveillance of Medicines and Food (INVIMA)

INVIMA is responsible for ensuring that food and pharmaceutical products meet the necessary quality and safety standards for export. This institution plays a crucial role in protecting public health and regulating these products abroad. Exporters of food and medicine must obtain a sanitary registration, which is mandatory for access to international markets.

Requirements to Obtain INVIMA Sanitary Registration

• Register the company and products with INVIMA via formal application.
• Submit technical studies demonstrating the quality and safety of the export products.
• Conduct laboratory testing and analysis to certify the sanitary characteristics of the product.
• Ensure product labeling complies with the regulations of the destination countries.

Preparing Goods for Export

Proper preparation of goods is critical to ensure they arrive in optimal condition. Key areas to consider include:

Trade Terms (INCOTERMS)

INCOTERMS are standardized terms that define the responsibilities and obligations of sellers and buyers in international trade. Understanding and applying them correctly helps avoid misunderstandings during delivery and transportation.

• FOB (Free On Board): The seller is responsible until the goods are on board the ship. Risk and cost then transfer to the buyer.
• CIF (Cost, Insurance and Freight): The seller covers costs, insurance, and freight to the destination port. Risk transfers once the goods are shipped.
• DDP (Delivered Duty Paid): The seller is responsible for all costs, including taxes and duties, until delivery to the final destination.

Modes of Transport (Air, Sea, Land)

The choice of transportation method is essential for ensuring efficient and secure delivery. Each mode has advantages and disadvantages based on the product type and urgency.

• Air freight: Best for time-sensitive or high-value products. Although more expensive, it ensures faster delivery.
• Maritime shipping: More economical for large volumes, though with longer transit times. Ideal for non-perishable and lower-cost goods.
• Land transport: Common for domestic distribution or connections between ports and airports. Offers route flexibility and relatively fast delivery.

Proper Packaging and Labeling

Packaging and labeling are vital for protecting goods and ensuring regulatory compliance in destination markets.

• Packaging type: Should be selected based on product characteristics. Use strong materials and proper techniques, especially for fragile or heavy items.
• Labeling: Labels must clearly state the contents, country of origin, handling instructions, and specific warnings when applicable.
• Regulations: Labeling must comply with the rules of the destination country, which may include specific languages, symbols, and product data.

Customs Management and Documentation

Effective customs management and documentation are essential for export compliance. This process ensures that goods meet all legal requirements both locally and internationally.

Customs Agency and Processing

Customs agencies play a critical role by managing the required procedures for clearance. They ensure all documentation is accurate and compliant with current regulations.

Export Authorization Request

Before goods can be exported, an export authorization must be requested. This includes submitting various documents to customs:

• Commercial invoice
• Packing list
• Transport documents
• Certificates of origin (if applicable)

Approval of the export authorization ensures smooth departure. Strict compliance reduces delays and the risk of penalties.

Customs Declarations and Required Documents

An essential part of customs management involves submitting customs declarations, which include detailed information about the exported goods and their tariff classification.

Required documents typically include:

• Customs declaration form
• Transport document (e.g., bill of lading or airway bill)
• Commercial invoices stating the true value of goods
• Relevant permits and certifications based on product type

All declarations must be submitted in a clear and accurate format. Precision in this step helps ensure compliance and streamlines the export process. Errors may result in fines and operational disruptions.

International Transportation and Logistics

International logistics ensures Colombian products reach their global destinations effectively. This stage involves selecting the right transport mode and managing the associated logistics for maximum efficiency.

Contracting International Transport

This process requires evaluating various options depending on the product’s needs. Companies must decide between air, sea, or land transport, considering:

• Product type: Perishables often require air transport for freshness, while non-perishables can be shipped by sea.
• Costs: Total shipping costs—including fees, surcharges, and insurance—must be evaluated to ensure export profitability.
• Delivery timelines: Some markets demand stricter delivery times. Transport choice should match customer expectations.

Logistics Operators and Their Role

Logistics operators play a crucial role in international transport. They act as intermediaries between exporting companies and transportation service providers. Their expertise in logistics helps optimize export operations.

Key responsibilities of logistics operators include:

• Transport coordination: Organizing the movement of goods, selecting the most appropriate mode of transport, and managing transfers between different carriers.
• Documentation: Assisting in the preparation of all necessary shipping documents, including customs and other regulatory paperwork required by the destination country.
• Warehousing: Offering temporary storage solutions to ensure products remain in optimal condition before shipment.

Cargo Tracking and Monitoring

Tracking and monitoring cargo are essential to ensure products reach their destination efficiently. With technological advances, companies can now implement systems that allow real-time tracking of the status and location of goods in transit.

Benefits of effective tracking include:

• Visibility: Knowing the exact location of goods at all times allows companies to plan and respond to delays or unexpected changes.
• Risk management: Continuous monitoring helps identify and mitigate potential risks, such as weather disruptions, customs delays, or other logistical problems.
• Improved customer satisfaction: Providing delivery updates enhances communication with clients, resulting in better service and customer loyalty.

Currency Repatriation and Payments

Currency repatriation is a critical aspect of export logistics, allowing companies to recover foreign currency generated from international sales. Proper management ensures financial liquidity in global operations.

Management through Foreign Exchange Intermediaries

Currency repatriation is conducted through authorized foreign exchange intermediaries such as banks or licensed exchange houses. These institutions help convert export earnings into local currency securely and efficiently.

Steps in the repatriation process include:

• Choosing the right intermediary: Select an institution with competitive rates and authorization from the Central Bank of Colombia.
• Document submission: Exporters must submit supporting documentation, such as commercial invoices, sales contracts, and shipping documents.
• Repatriation request: Once the transaction is complete and documentation is in order, a formal request is made to the selected intermediary.
• Operation tracking: It’s vital to maintain records of all transactions to ensure the process meets deadlines and agreed conditions.

Any issue in this process can affect the exporter’s cash flow. External factors such as exchange rate fluctuations and regulatory changes may also impact the outcome. Staying informed and well-advised is essential for effective financial management.

Challenges in Export Logistics in Colombia

Export logistics in Colombia faces several challenges that may hinder international business performance. These issues are often related to the regulatory environment, infrastructure, and key logistical factors.

High Logistics Costs

One of the major obstacles for Colombian exporters is the high cost of logistics. These costs—including transportation, warehousing, and operations—can represent a significant share of business income.

Studies show logistics costs in Colombia reach around 12.6% of total revenue, with transportation accounting for approximately 30.7% of the total.

Poor Infrastructure

Infrastructure is a critical component that directly affects logistics operations. Colombia has long struggled with deficiencies in this area, causing delays and increasing operational expenses.

Road and Port Conditions

Roads in Colombia vary widely in quality, often failing to meet proper standards, leading to delays and wear on cargo vehicles. In addition, key ports such as Cartagena and Buenaventura suffer from congestion and maintenance issues. These conditions reduce the efficiency of export logistics and make it difficult to meet international delivery schedules.

Lack of Multimodal Transport

Another significant challenge is the limited availability of multimodal transport—a logistics approach combining different transportation modes (sea, land, air) for efficiency. The lack of integration between these modes restricts companies’ flexibility to adapt their logistics strategies to international market needs.

Complex Regulations

Colombia’s export regulatory framework is extensive and often complex. Both local and international regulations are rigid and frequently updated, requiring exporters to have a deep understanding of applicable laws. Failing to comply can result in penalties, delays, or loss of access to foreign markets.

Lack of Technology in Logistics Processes

Although some companies in Colombia have begun adopting advanced technologies, most remain behind in terms of digitalization. The lack of tools such as Big Data, inventory management systems, and cargo traceability limits their ability to optimize operations.

Investing in technology is essential to:

• Improve efficiency
• Reduce costs
• Enable informed decision-making in export logistics

Strengths of Colombia's Logistics System

Colombia's logistics system has several strengths that support export processes and help local companies compete in global markets.

Diversity of Exportable Products

Colombia offers a wide range of exportable products, representing major opportunities for businesses:

• Agricultural products: coffee, flowers, bananas, and sugarcane
• Agro-industrial goods: sugarcane derivatives, processed foods
• Manufactured goods: textiles, garments, plastic products
• Luxury goods: jewelry, leather goods, technology

This variety allows companies to specialize and diversify, reducing risk and increasing success in international trade.

Free Trade Agreements

Colombia has signed multiple free trade agreements (FTAs), opening access to international markets. These agreements offer:

• Preferential access to markets with reduced or eliminated tariffs
• Increased competitiveness of Colombian products abroad
• Opportunities to diversify export destinations and reduce dependency

Thanks to these agreements, Colombian companies can more effectively position their products globally.

Growth of Exporting Companies

There has been significant growth in the number of micro, small, and medium enterprises (MSMEs) entering export markets due to:

• Training and education initiatives on international trade
• Access to information and export-related resources
• Strengthening of Colombia’s export-oriented business culture

This trend not only enriches the national economy but also enhances Colombia’s presence in global markets.

Government Support and Guidance from ProColombia

The Colombian government, through ProColombia, plays a critical role in promoting exports through:

• Specialized advisory services for potential exporters
• Training programs on international commerce
• Digital platforms connecting exporters with foreign buyers
• Networking events like international business matchmaking sessions

Such support is vital for enabling Colombian products to enter global markets successfully.

Improvements in International Connectivity

Despite infrastructure challenges, several Colombian cities have made progress in improving international connectivity:

• Airport expansion and modernization for more efficient air transport
• Investments in seaports to enhance foreign trade operations
• Development of road networks to improve access to production and export areas

These improvements make Colombia more attractive for foreign investment and strengthen its role in the global supply chain.

Future Trends in Export Logistics

Future trends in export logistics reflect how companies are adapting to changing global demands. Below are key trends that will shape Colombia’s logistics landscape:

Nearshoring and Trade Opportunities

Nearshoring focuses on relocating suppliers and operations closer to key markets. This strategy can provide Colombia with significant advantages:

• Lower transportation costs
• Improved delivery times
• Greater flexibility in the supply chain

As companies seek to reduce risks associated with distant supply chains, Colombia can position itself as a strategic hub for firms looking to serve nearby markets.

Digitization of Logistics Processes

Digitization is becoming a foundational element in export logistics. It includes the adoption of digital technologies in areas such as:

• Inventory management systems
• Transportation management platforms
• Streamlined communication between suppliers and customers

Use of Big Data and Cargo Traceability

Big Data helps analyze large data sets to make smarter decisions. In logistics, it improves cargo traceability, allowing companies to:

• Monitor shipments in real time
• Identify delays and optimize delivery routes
• Improve customer satisfaction with better delivery updates

Sustainability and Eco-Friendly Practices

The global agenda now emphasizes sustainability. Companies that implement responsible logistics practices not only help the environment but also improve their public image:

• Use of sustainable packaging
• Adoption of cleaner transportation modes
• Resource optimization to reduce carbon footprints

This approach benefits the planet and appeals to environmentally conscious consumers.

Innovation in Transport Infrastructure

Investment in infrastructure will remain key to improving Colombia’s logistics system. Emerging innovations include:

• Projects to upgrade roads and ports
• Integration of advanced technology into transport systems
• Promotion of multimodal transport as an efficient freight movement solution

These initiatives will enhance access to international markets and boost Colombia’s foreign trade capabilities.