Maersk Invests More in Latin America Amid Nearshoring Boom – Sourcing Journal

As nearshoring gains traction in Central America and South America, a freight and transportation giant is marking more and more areas in the regions.

Maersk is strengthening its presence in Latin America with the opening of a 150,700 square meter fulfillment center in Colombia and a 37,700 square meter fulfillment center in Panama.

The new Maersk fulfillment center in Colombia already serves customers from the consumer goods and pharmaceutical industries. The warehouse is located in the Zol Funza logistics complex, which is 50 minutes’ drive from six of Bogotá’s main hypermarket areas.

The center provides a warehouse management system, cross-docking capabilities and other value-added services, and includes lithium battery electric equipment and LED lighting.

Maersk, like other logistics giants, sees plenty of incentive to move further south as apparel companies move production closer to home.

In 2023, brands like Target and Columbia Sportswear have made massive commitments to sourcing in Latin America. Target said it would increase its spending in El Salvador, Guatemala and Honduras by $300 million by the end of 2023. The bulk retailer also plans to deepen existing relationships with suppliers in all three countries. Columbia Sportswear has committed to purchase up to $200 million worth of products from North Central America.

“Central America has been less attractive as a nearshoring option for US companies than Mexico, mainly due to a lack of investment in the corporate landscape. However, that is beginning to change and it is increasingly being recognized as a strategic nearshoring opportunity due to its geographic proximity, FTAs, low operational costs and large workforce,” Jena Santoro, senior manager of supply chain risk at Everstream Analytics, told Sourcing Diary. “In addition, the region has a well-connected logistics infrastructure such as ports and highways that ensure easy transportation to and from US markets.”

Maersk’s investment in Colombia will cost a pretty penny at more than $200 million, says Antonio Dominguez, Maersk’s head of Latin America and the Caribbean.

In a statement, Dominguez said the capital allocation would expand Maersk’s logistics infrastructure through investments in cold storage, warehouses, depots, distribution centers and container yards, aiming to support customers’ supply chains while responding to the needs of their industries.

“By expanding our offering, we are strengthening our position as a logistics integrator in the region, by connecting the needs of the industry with the needs of the world while focusing on providing high value-added solutions to our customers,” said Dominguez.

The Maersk plant in Panama, the company’s second in the country, opened in August. The 37,700 square meter site is located in the Panama Pacifico logistics park, is strategically located approximately 29 km from the capital Panama City and has direct access to major highways, ports and airports.

These new facilities bring Maersk’s total area in the region to more than 1.94 million square feet across eight facilities in Central America, the Caribbean, Colombia and Peru.

The company opened a new warehouse in Peru and three facilities in Chile near Santiago earlier this year. The locations strengthen the logistics giant’s existing capabilities in the country, including the San Antonio Logistics Center in Valparaiso with over 750,000 square meters of storage space, just 10 miles from Chile’s main port.

As Maersk continues to expand into Latin American countries, DHL is emphasizing nearshoring opportunities – or what it calls “omni-sourcing” – in the region, investing $556 million in Latin American operations through 2028. The growth of nearshoring may also have played a role in the initial public offering (IPO) of LatAm Logistic Properties, a $578 million industrial logistics real estate developer.

“Sectors such as textile and apparel manufacturing will benefit enormously from this expansion, as concerns over the use of Uyghur forced labor in China’s Xinjiang cotton-growing region have led to unethical sourcing relationships at many large apparel companies,” Santoro said. “The global fashion supplier Hansae Co. Ltd. has spearheaded this change and made significant investments in Central America, opening ten new manufacturing sites in Guatemala and Nicaragua.”

With the new investments, Maersk aims to better connect Latin America to the world by expanding its end-to-end warehousing and distribution presence across rail, air and its regional consolidation/deconsolidation network.

As the world’s leading provider of logistics services and the second largest container shipping company in the world in terms of volume transported, the company operates in more than 130 countries and employs over 100,000 people. Maersk aims to achieve net-zero emissions across the business by 2040 with new technologies, new ships and green fuels.