[00:00:37] Good morning, my name is Enrique Alvarez and welcome back to another episode of Supply Chain Now in Spanish. As always, we have very, very interesting guests from all over the world, particularly Latin America, and today we have the pleasure and privilege of talking with Gerardo Naranjo, Gerardo Country Head of Earth, Freud for Debby Changer in Santiago, Chile. How are you? Good afternoon.
[00:01:01] Hello Enrique, good afternoon. I am very well, thank you very much and well, thank you very much for inviting me to participate in this podcast.
[00:01:08] It is a pleasure to have you here with us. I am ready to discuss not only your professional career, but also the current logistics. And well, to give a little more context to the people who listen to us. Gerardo has 11 years of operations experience in logistics operators such as Danko Odi Nagel. David Sanger is now focused primarily on implementation and project management. You have had a very successful career and again we are very happy to have you here with us. Gerardo, tell us a little about yourself, where were you born? Who you are, that more or less a little bit of your personality.
[00:01:51] Yes, of course. Well, as we say here in Chile, I was born and raised in Santiago de Chile and I have not lived anywhere else but the capital of my country. I grew up in a, let’s say, modest family, quite large on my parents’ side. In fact, my dad is one of two brothers. The family of that old-fashioned large family, I say. And my mom wasn’t far behind. She is a sister of a canning group.
[00:02:31] Wow, look at several cousins and uncles o
[00:02:34] I have some that I haven’t seen for a long time, because there are some that are in the United States and others in the south of Chile and so on, scattered all over the place. But I tell you this because it is the style that, according to my point of view of the old families in Chile, was very common. That’s not so much now. It happens a lot as a demographic factor, I think, in many countries, but also in Chile. It is not the exception and it used to be very fashionable to do that and that, touching it, cleaning it. With what I told you, that my modest family, I believe that it also generates that economic impact in these families that are very large. So my father, who is an example for me and my mother, were also people who achieved, did not complete a higher education. For example, my father finished, he finished elementary school and my mother finished high school, which we did the middle school and in the case of my father, basic education and I could say I am the first one to graduate from university in my direct family. So a family
[00:03:45] It’s going to make your mom and dad proud, both of you. And well, and the fruits of their labor. I imagine that much of your success also comes from them and their education.
[00:03:56] Undoubtedly, undoubtedly, that is something that I greatly value and appreciate. I believe that when it comes to the formation of people, the most important thing is the aspect of education and values, regardless of whether you have a lot or a gift or have little. The important thing is the mentality that you manage to cultivate in your family and I believe that in that sense a good job was done and I feel grateful to have had the family I had. I still have thank God, my parents are young and dad is not yet 60 in ’59 and my mom 54. So we could say they are young parents, compared to some of the people I talk to in my life, very young.
[00:04:42] In fact, I am quite young. He is very fortunate in that respect as well. You can’t share a lot of things with your parents when you have them a little closer, generationally speaking of course.
[00:04:56] And well, after education, primary education, well,
[00:04:58] Before, before going into education, tell me about some experience you had as a young person before your professional career. Have you ever talked a little bit about your family, anything you remember in particular? At its best
[00:05:14] There are many things, but I believe that an important experience for me has been the lesson of the concept of entrepreneurship and independence. In what sense? My dad, for example, has always been independent all his life. When he was younger, he worked in construction with his brothers, who had a small company, doing construction work. He later worked in workshops and owned a mechanic’s shop. He also worked for some time in the used car business. So my dad has always been independent and he somehow planted that seed in me, of the value behind independence and personal effort to get ahead. I kept that and one-time experience. I could tell you that when my dad, when I was about, I would ask about twelve years old. At that time, my father was in the used car business. So, in certain situations he found himself with more than one vehicle in his possession and he had to take it to what we call Persian markets, which are like markets where I don’t know if you know something like that, a market where you put vehicles and advertise them, put little signs and sell them. So, since I was the I am the eldest son.
[00:06:40] I had to accompany him sometimes to take cars to this. Then I already had to drive and without a license. I know it’s wrong, but it’s already part of the story of my history. I would go out and about town following him around and driving a car. Obviously if any police caught me that never happened. That was a partial infringement. So that is the lesson, because with that experience, being there, seeing how to trade, how to sell and also the same direct teachings of my father, I have always believed in entrepreneurship and in personal effort to get ahead and that led me being quite young, doing some small businesses, obviously, and I remember having started also close to that time that I told you, when I was 12 13 years old, buying and selling video games. And that was I could say, was my first experience with entrepreneurship. I would buy consoles and video games, some I would lamp them, some I would put together packs and sell them with a margin. And that eventually allowed me to buy my first car when I was in college. I think that’s how it’s done.
[00:07:52] Most of your friends at that age were playing video games. Were you trading with them?
[00:07:58] Yes, I said both,
[00:08:00] Sure, you were a good, good video game salesman at that age.
[00:08:04] Yes, so that is an experience that I think marked me and is composed or composed of the teachings and the opportunity I had because my father lent me, let’s say, the capital, which was a lot of money to buy the first one, and there I sold it for an advertisement. That wasn’t on social media, obviously, so it was different. But I believe that at the same time it is easier from the point of view of competition, because there is much more competition in this type of small market.
[00:08:30] How interesting and a good thing. From a very young age, from a very early age, you were starting your first business, what? What did you learn about yourself? What did you like the most about that first experience that I imagine later led you to pursue your professional career and get to where you are today?
[00:08:53] Of course, perhaps it is not a direct relationship between a person who starts with entrepreneurship and then ends up working in private companies. With the case of Billings, he created a German public company, because the experiences that one sees, I personally, whenever they tell experiences of small enterprises, they are generally people who continue to be, follow that path. I have not followed it 100 percent. I have some little parallel things, but small ones, and it is precisely because I believe in financial independence throughout my life that I aim at that at some point, but I could also exploit and develop myself well in the professional area and that has given me benefits that today allow me to have the life I have. So I can’t complain either. No es I missed a bit of your last question.
[00:09:49] No, it’s not exactly, it’s exactly what you answered. Well, I guess let’s go a little bit then, with that base and foundation that your parents gave you, both your mom and dad, and that entrepreneurial mindset and that desire to market, if you want to look at it that way. Tell us a little bit about the part of your career you studied. What caught your attention? How did you get into this interesting and volatile logistics industry?
[00:10:23] Perfect. Now I really want to finish with what I have been telling you, as I am kind of scattered. If you asked me what lesson or what did I get out of it? I believe that believing that you can do things, that you have tools, that you have health, that you have support, you have tools that are fundamental and that open doors or windows. And you can do many things as long as you have the desire, the energy and also the determination to do it. And I also learned, I believe, the value of money, at least in Chile, and I have seen information from other countries. There is also much criticism of the lack of financial education at an early age. I think those were some take offs that I can take from my experience and bring to the professional side. Honestly. As a good middle-class son, I didn’t have one. An example of some career from some architect family, agronomist family, business family, didn’t have a lot of experience in that regard. Then I entered to study something first in high school. Sorry, I forgot to comment. I don’t know if there is such a figure in the United States, honestly, but there is the humanistic school that simply teaches you all the branches of the social sciences and exact sciences and prepares you to enter university by choosing a career.
[00:11:55] And on the other hand, there are the schools that we call here professional technical schools, which are schools that teach you the humanistic part, but also focus on a certain career. Well, I was recommended by my family to go into business administration, which would be, as you can see, that was my secondary education, and then I somehow got into business and then, for a logical reason, I’m not going to lie to you, I don’t think that I had a passion, let’s say, a genuine passion. I wanted to study business, but since I had already studied in high school something related to business, I said I’m going to go to college business as well. And what business? And then I tried to focus on what was the best thing to do with the information I had at the time. And I, for example, at that time I studied data on the largest number of outflows, of outflows, of professionals, of studies, of houses, of studies. And there was what we call commercial engineering, which would be like business in general lines. And that has always been one of the most popular careers in Chile, because it is flexible, it is versatile,
[00:13:07] It gives you a very important base and a foundation that you can use later to apply in any other type of work.
[00:13:13] Not exactly. And I, because I didn’t have a lot of information, I went by what I could see. There are many coming out of this race. There was also Leyes. For example, I said I don’t want to go to those careers that are coming out with many graduates, many new people, entering the market. Then I found there a career that had only one university at that time, where I studied International Business. So it is the same as business, only it had a tinge and a focus on international trade and business.
[00:13:46] That was the beginning of a very popular career. I think exactly now there are more people coming out of international business than the other.
[00:13:54] There are undoubtedly some particularities, such as the fact that in the career I studied there is much more competition, from technical areas, careers, shorter careers that go to the market faster. Unlike the other. But those were things I learned along the way. Let’s say, I think, the information I had, but in the long run it has been a super good one.
[00:14:16] At what point and at what time did you say good? Logistics, at what point did logistics call you? Or how? How do you enter? What is your foray into logistics?
[00:14:26] In high school we had one with a class or branch that we call here, a branch of studies that was Encotramos and International Trade. So there I was able to learn and click on the importance of the economy at a global level and how this concept has been around for a long time. Globalization led Winter to an economic exchange that led to a much faster economic development of the nation. So, with that and all the information that one acquires in the course of one’s education. It clicked and I said Yes, that’s something important, that’s something that’s in vogue, that’s something to exploit and that one could develop in a professional area. In fact, well, perhaps you know Chile, its recent history towards one of the most economically open countries in the world. Therefore, what could be more ad hoc than something related to economics and international trade in a country as open as Chile? So, that’s where it went. It was my idea. And that’s how I got to college and a five-year degree and then I started working and that’s where I had my first, my first work experience at Tour with Operation Dam.
[00:15:47] And tell us a little more about Danko. And then you were also because an angel, how did you specialize to get to the position and success that you have had with David Jonkhere?
[00:16:02] Yes, like many, like the vast majority I would venture to say in this industry, which, by the way, in my opinion and in my experience, is an industry of much merit which I like very much. I started, like many, in operations, in documentation and operations and in this maritime case. My first experience was getting into perishable cargo exports. In 2011. I learned a lot from documentation, a lot from the processes, but perhaps from my training. I could see that it wasn’t 100 percent for me. No, no, no, no, no, I felt it was the area I wanted to exploit 100 percent, but I also knew it was fundamental to live it, because it gives you an important technical base in this area. I wanted to go at that time, and I wanted to start in my career, to go more into commercial areas, to go into more areas, a little bit more technical if you will. At that time thinking front desk, customer service, things like that. But I lived through the processes, I worked very hard on Perecerás. This is how we work in this area. Long days when it is high season, going out, coming in very early and leaving very late. And so was my experience at Danko. I was there for almost a year. I did the internship, which here is called training or internship, the professional practice.
[00:17:32] Then I was in the season for a while and then I could not renew my contract with the company. And there I was in a step that I didn’t, I didn’t put it there on my resume. But it is also important in a company called Delphi. They are free for water, small to medium, with a focus on Asia-Pacific Maritime routes. There I also continued to advance my experience in the area of operations and commercial maritime. I also learned a lot. I have always been a philosophy of self-learning and always learning by doing and doing more. I believe that if you do and deliver more, you get more in the long run. So I learned a lot that way. Well, after my time at Delfín I had the opportunity to participate in a recruitment process in China. Nagel, who is a benchmark in the industry, no doubt. And from there I was able to take an important step in my career that led me to a hybrid position between operations and commercial where I worked, attending key accounts, important accounts of the company, with a differentiated service and with a lot of information base. Then I also continued to learn a lot. I already went into a commercial department because there I reported to the manager that
[00:18:56] I had a little more interaction with people and of course they told me that’s what I really tell you about Mexico, you’ve been involved in that, so it was what you really like. But I wanted to ask you about what you have told us about your early career. Again, you mention a lot the operational part, the operative part, which at the end of the day is not what you like or what you are passionate about. At that time you were a more commercial person, but for the people who are listening to us and who maybe are about to graduate, or are about to graduate or are in the industry right now. How important is that? Because it seems to me that now part of the success you’ve had is based on that.
[00:19:38] Fundamental is fundamental. We all have different tastes here, but the operation, without a doubt, is a fundamental part of our industry, it is where we interact with the click, with the customer and with his cargo, which in principle is the center of our work. Therefore, learning from the operation, understanding what is behind a veil than behind an air guide is fundamental. So for all those who may listen to us, who are in their training process or looking towards logistics as a career. I think it is important to always keep your eyes on the operation because it will open many doors for you.
[00:20:17] Something else that maybe two or three things that could be recommended to people who are recent graduates or who want to make a change in the operational part, the commercial part, something else that has been useful to you, because you also have a very successful career over the years.
[00:20:33] Yes, without a doubt. Look, on the one hand, there is learning a lot about the business, the core business, the company we work for and the logistics industry in general. But at the same time, in my opinion, a fundamental aspect and if you want a humble piece of advice I could give you is to always seek to learn more. And in this field, at least the one I have been fortunate enough to work in and know, learning more implies doing more. I have had experiences with people who have a very ingrained concept of me first getting, let’s say, a position and then executing the position or then executing and demonstrating that I can do certain tasks linked to that position. I think that is important, but even more important is to know that it is much more worthwhile to do and learn a task and then be able to execute it with evidence and with real knowledge, and to consider yourself for a position. I was telling you that when I was here at Google I had a hybrid role. That allowed me to get a leg up, as we say here in the commercial area, but not selling directly, but maintaining and Farman accounts. So that was very important because it allowed me to use my operational knowledge linked to commercial management with important accounts and at the same time I also told you about information management. This is another important aspect. I learned a lot about information management and the importance of visibility and information management in our industry. I often say that in many operations what we deliver is information, not in all of them, because in others we do take the cargo, we do a more direct management with the cargo, but in other times, in other situations of our services it is mostly information and the information is directly related to the quality and the perception of the quality of service that our customers will have. Therefore, having internalized myself in that area also allowed me to advance in my career.
[00:22:42] Going a little off the grid. And no, sorry to interrupt you again, but. In this information, which I find very interesting, I did not want to let it pass. What information? Actually edit it back to the part about who does what, but what information is it that you actually follow on a regular basis? Because there is so much information now, and with the pandemic, the changes, the changes in legislation, etc., that have taken place over the last two years. The policy, what information does Gerardo follow on a regular basis?
[00:23:16] Look, I also believe very, very strongly that in modern times social networks play a fundamental role in communication and in the dissemination of information. One has to go to the root, it is fundamental to go to the base, that is, official media, direct interviews. Do not go to the videos that other people make about
[00:23:38] Issues that happen to us
[00:23:40] Every day, and this happens a lot, that many times they take a little tail, a part of the tail, out of your body.
[00:23:44] Un or simply editing it, total
[00:23:47] No? I believe it is fundamental and in fact we are moving on to a very, very, very particular presidential election. Here in Chile. I talked a lot about it with my close ones and with my circle that it was important to base it on the main information and not on what third parties. Then I go to official media such as Ñata to give information from the air, Accenture consultant, also official media here in Chile, very well known in the Diario Financiero. I read it a lot in terms of logistics, the charge children is very important that other means could tell you.
[00:24:25] I that with those I think you give us a pretty good idea of the type of information that follows. And well, for people who also think they want to get into the business or who are already in the business, well, again I think we are going to put this in the comments of the interview so that they have it and have the links to, for example, La Ñata or Accenture to the financial journal. I think it’s important, but well, they totally interrupt you in your career story. Of course, you enter a hybrid. Finally, you have some contact with the commercial side, especially in terms of not developing new clients, but rather maintaining and adapting existing ones. Tell us, tell us what else.
[00:25:09] And that allowed me to participate in a selection process to get into the hard leagues to see. There I worked directly in English sales. It was a good departure after a little more than three years of working at the first level. Mainly because I could not see growth in my career, in my leadership. At the time I had plans for myself, but. But a year had passed and the conditions were not right. And this opportunity arose. It was a very good opportunity and I took it. I also believe very much in that, that one has to look for opportunities and also take certain risks. This is the way, I believe, to move forward, perhaps a little faster than just letting things happen, but also to go out and look for them. Then A I got into sales. It was an important leap, an important bet, because it is not the same to maintain than to go out and look for clients.
[00:25:59] Very, very, very, very different, very different.
[00:26:01] And the good Chile. And in the world in general, coaching is an industry of lots and lots of competition, lots and lots of competition. So it’s not easy to bring in a customer and it’s not easy to keep a customer. So that’s where I learned a lot again. I am grateful for my career because in everything I have done I have learned a lot. There I learned about sales and customer development. I also started my first interactions in implementations, did you see? They gave me maybe a little bit more orderly, with the capacity to handle information and they told me to help us here. And I also took on the challenge of implementing and supporting the process of implementing the accounts. I wasn’t there for a while either. In English I get a call from my former boss and my direct boss in an image that was now in Jonkhere and she calls me to offer me a position that she was developing because she was just coming in. This was in 2016 and well, after a little bit some conversations I ended up coming with her, who is an excellent leader. That was also one of the reasons why I wanted to go with her and also for the professional growth. And then I went back into sales, but this time focused on implementation development and development of customer-facing information technology tools.
[00:27:27] I was still following the data and technology part of it, and that part has always been important then too,
[00:27:34] And the turning point was in whom? And there I am going to link it with what I was saying, that I think it is very important to do, to get involved in things, to learn new things. I was among Nigel’s Nigel’s I got in this way by being a nosy reporter.
[00:27:50] It’s just that it’s an excellent company, I think it has a lot to offer in all the companies you’ve worked with. They are excellent, but I think as you were saying, there is a division that they are without a doubt, but in several aspects, without a doubt.
[00:28:03] But I tell you something, I would not have learned what I learned about information management and systems if I had not asked to be put into a training that was not for me, that was for other people. That is why I want to emphasize this as a piece of advice for those who may be interested and may find it useful, because it can provide you with a lot of retribution in your career and in the future. Because in principle what I did, if we look at it from the outside, was to put myself where I wasn’t being called and to take on more work without anyone giving it to me, do you understand me?
[00:28:36] But I somehow take in your hands your training, the very owner of how fast you are progressing in the company?
[00:28:45] Exactly, we in that position that I was in that there were no people. We are in charge of displaying information to clients and preparing reports and presentations that wards send monthly and quarterly business reviews with performance indicators. But those reports were prepared by a specific unit related to the reports. Then you simply received the report more or less assembled. You put together a presentation. So that was the award I asked for and I was not called to it. I said that to my boss at that time because I think it would be very useful if I knew how to manage myself a little more in this, because we would gain efficiency. I got in, I learned and then in time I got loaded with a lot of work because I ended up doing reports for a lot of people, but that in the background that this can be read as why do that if it actually meant more work? Because I did, but in the end it allowed me to advance in the rest of my positions in a solid way. And in fact I would dare to say that this milestone that manager could open the doors for me to be where I am today, because I make the difference where, where I have been. I have made a difference precisely in that I can combine operational, commercial and also technical experience related to information tools that today are also very much in vogue. In other words, digital transformation is something that almost everyone knows about all medium and large companies, even some small things, because it is. What is needed is the fourth industrial revolution; information is the basis of our work and we cannot be oblivious to that. And I got a little bit ahead of myself precisely because I was nosy and somehow wanted to get involved in things that were not necessarily my responsibility,
[00:30:24] That it is basic as it says to be nosy, to want to do more than what you are told you can do. I think it is important to grow, not only in terms of knowledge and experience, but also to grow at an organizational level. Speaking exact level on TV Jonkhere, which is the company you are spent since your boss called you to be with you more than 5 years ago plus five years has a great team. Why? What makes your equipment so special? I think they have a way of working, a culture. I can imagine what makes that culture so, so interesting, so efficient. Watch.
[00:31:08] First and foremost are the people. In other words, I believe and we believe in the organization. That we are a service company based on people, that is, all of us. From the document executive Customer Service, Sales, Managements, all finance, human resources, Haiti, quality, etc. We all do the service and are responsible for the result we have today. Success depends on people, so the recipe if I could give you one is that, just work with people. To build strong, versatile and high performance teams, but always through modern leadership. The most horizontal leadership and very, very good communication. Communication is fundamental and I believe that unequivocal proof of this is what we experienced with the flag. Communication, in this case through digital media, was a trial by fire and those who were able to overcome it have been able to hold their own in these difficult times.
[00:32:16] No, I totally agree. And I think what you’re saying people are what organizations do and they say it’s proof of that. I think they have. It seems to me that they are celebrating the 150th anniversary and a slogan that seems to me to be very good, which is to raise lives for the people who listen to us. No di Jonkhere raise lives 150 years. What can you share with us a little bit about it and how are you going to celebrate it? Because I imagine that’s something that very, very few companies, regardless of industry, achieve.
[00:32:52] Yes, and if I am not mistaken, I believe we are the company with the longest history in the forward industry,
[00:32:59] Probably with so many years in the industry,
[00:33:02] 150 years is a very long time. And well, as a good German and European company, there is a lot of focus on sustainability, environmental care, technology development and innovation. So, in this context and also in addition to the celebration of 150 years, which is a tremendous milestone for the company, we are carrying out a global campaign that will donate one million 500 thousand euros to charitable causes during the year 2022 through a sports goal. We have an application called Time Fit, where you register the sports activities you do and we have a goal of 150 million kilometers. So, well, what’s a tremendous number? But we are more than 75 thousand people in the network. So then I believe it will be more than achieved. And the fun of this is that you download the application and Contour, either smart watch or with the same cell phone, records your sporting activity and will count the kilometers and that will add teams that may have their team within the country, teams per unit, then country team, team, region and global team.
[00:34:19] And when? When it started
[00:34:21] This started about two weeks ago and
[00:34:26] Kilometers you carry,
[00:34:27] I’ve been there a little bit. I was not with a lot of things personally and work-wise.
[00:34:34] 150 million kilometers is what you said.
[00:34:37] Yes, worldwide.
[00:34:39] But no,
[00:34:40] I’m coming for you. I have no goal to contribute a lot, at least the 50 km per week, because I’m going to take up cycling again. I like to ride my bike, so I can add a lot of kilometers to that,
[00:34:51] Because it doesn’t have to be running. The bike counts.
[00:34:54] The bike even counts. There are also some conversions that do it through calories when you do activity, such as walking, for example, or functional exercises.
[00:35:03] So that’s very interesting because they also promote health within the company and they are tracking it by country as well. And if there is resistance by
[00:35:14] Countries, there are rankings by country or region. Everything is very measured and that gives, shall we say, a certain spark to the competition.
[00:35:25] Because it’s a good idea and ultimately the goal is to donate these 1.5 million euros.
[00:35:31] Exactly. So it’s super, super interesting. In addition to that, the company made an agreement with Adidas and they are making sneakers with 100 percent recyclable material that will go to everyone who signs up from the company and ideally that would be everyone. But everyone who participates in the Challenge will receive a pair of Change logo shoes.
[00:35:53] They do it well
[00:35:56] And a line that is 100 percent recycled material from and not just any recycled material, but plastic taken from the ocean. So this is super interesting, these are initiatives that I think make you feel proud, to participate in the organization, to be part of the organization and the good thing is that both are super excited to participate, I also distribute it for my team, for the group,
[00:36:21] It’s very interesting, it’s a good cause, it’s fun and we are helping the planet at the same time. It’s a great split idea and I’m talking a little bit sustainability. What other? I know they are also very important to you. What is it for? What else do you do now and what services do you offer for your customers? On the air side, which is where you are, on the sea side,
[00:36:49] Look, as a German and European-minded company I was telling you, a lot of effort is being put into sustainability. Until a couple of months ago Ventures was developed, which is a division of Ginger’s division that invests venture capital in companies that are developing and that have some positive environmental impact. So we have that branch where the company invests significant sums of money in this type, in these types of companies, to develop them and contribute to a better world. On the other hand, there have been very interesting innovations in different countries that are gradually looking for expansion, obviously, but always born a little more intensively in Europe. In Sweden, for example, the Las Maile was implemented some time ago with electric vehicles, an electric mix of electric and self-driving cars, which are like electric bicycles. How well as these evax they have that are with three wheels trististisimo tricycle that make the mael and can transport up to a pallet in smaller streets of the cities in. We have also invested in electric trucks for Europe and Trucks, which today are already operating in Europe and we are also looking to make similar investments in the rest of the Americas and the rest of the world, as other things have been done. A company called Voltron is also working very hard to develop the first cargo drones.
[00:38:33] High-weight for last mile shipments as well, and also to gray warehouses that are in larger urban centers, so a lot of things have been done. In fact we also had that already Lufthansa, this airline has done it with other logistics operators, but we were the first to operate a 100 percent pseudo-neutral flight last year. How nice that it is a flight that uses, that used what we know as the jet field. It is a fuel that is a mix that has a certain part of oils and recycled fuels, in addition to investing in reducing the carbon footprint to make it carbon neutral. Then we have reliable, sustainable flight for a full Schengen flight that was made from last year. And that was also a milestone in the industry, because for me personally it is a step that one could see as small, but it is nice because it is a milestone, because it is the first step today. You see, the media today are taking care of Boeing and others. Other manufacturers are already developing prototypes of 100 percent electric aircraft. Imagine what that’s like. On the maritime side, work is also underway on electric ship prototypes. Yes. So, the world itself, logistics, is working very hard on sustainability.
[00:40:03] And in logistics it has a great responsibility because we are also one of the biggest polluters of the planet. So I think it goes hand in hand with the responsibility we have to dedicate ourselves to what we do. But Debby Singer is definitely leading the way and is one of the pioneers in many of these initiatives. And as you rightly say, I think it is something that should be celebrated and should be celebrated throughout the year, as I imagine. You are going to do it, you are going to do it. Tell us now a little bit more about what a country does, and let’s get into your day to day life. What a day in the life of Gerardo Naranjo looks like and tell us, now, a little more about the airline industry. We have all lived through the pandemic, it has been a very difficult time, there is no availability of equipment, there are no containers. In Chile in particular, it has been very difficult. Tell us a little more about your position first and what you do? And then some of the. The challenges you have faced.
[00:41:11] Well, I started in the unit in charge of the department in 2018, I took a year, as the industry in general was coming with a certain challenge. In fact, I remember very clearly that before the pandemic happened, well, some social issues that did not occur in the country, the airline industry was already hit. It came with a decrease in its global volumes of about 4 percent compared to 2018, which although we could categorize it as marginal, but it is not something that any industry expects, i.e. that there will be a decrease in volumes. The economy is a little bit leaner, let’s say, with certain impacts of crises that had occurred years before and that scenario was seen in a low scenario, but well into 2020. And what could have been a negative scenario is transformed into an even more challenging and more complex scenario with the pandemic in April, in the first, ending the first quarter of 2020, the global air capacity, according to official data from yachts and official consultancies, was reduced by up to thirty-five on some routes 40 40 percent. In other words, the availability of space for uploading cargo was reduced by almost half. And that is because passenger flights contribute between 60 and 70 percent of the total volume of cargo handled by the industry, and as the borders closed, passenger flights remained stationary. It is not in the airlines’ interest to move their cargo on passenger flights because it is not the purpose of the particular aircraft.
[00:42:52] Therefore, capacity was significantly penalized, to the detriment of tariffs. The scenario became very challenging in those terms. However, considering the sanitary crisis and what also happened in the maritime market, what was negative also had certain positive aspects, and these were the large volumes of cargo that could not be transported by sea because of the availability of containers due to the maritime situation in the United States, especially in Long Beach and in the larger ports. This situation generated high volume spot business due to the urgency of transporting masks or personal protection elements, or because it could not be handled by sea, because this also generated benefits from the point of view of business generation and invoicing. Why? Because since the rates were very high for a similar or even lower percentage margin, it was possible to maintain a fairly good business and achieve blue numbers at least. And so it was that 2020 managed to maintain a blue number with volumes similar to 2019. A larger drop was expected, but we managed to at least hold our ground and not to grow so significantly. There was a small marginal decrease in volume, but there was an increase in the volume
[00:44:19] Considerable considerably the rates and all that went to heaven.
[00:44:24] Not as much as the maritime industry, but yes, but
[00:44:28] Also this one yes, definitely not as much as the maritime part. But how do you see Chile in particular in 2022? The Chinese New Year is approaching. By the time this episode comes out, we’ll probably have seen what happens, but if it’s your Forcas for this year. How do you see it on the aerial side? What do you think will happen in Chile?
[00:44:53] I see an aerial scenario. Let’s talk about air even more stable than 2021. But still in a loss-making situation. As we have seen, the new COBIT variant does not leave us at ease. We thought we were on our way out and it seems that we are re-entering a peak of contagion in several countries. Chile has also had recent pics. So that’s going to keep the challenge on capacity again for the, for the availability of passenger flights. However, we will not reach the peaks we had in 2021. Therefore, I would expect a slightly more stable scenario, but with its challenges. The spot load of high-volume CTs will be reduced, because it is also seen that maritime capacity is being injected. Therefore, we are not going to have the same pressures in the maritime business. Therefore, there will not be such large cargoes as there used to be when a full container was almost airlifted because it could not be handled by sea and there was a significant stock out. I believe that business will have slowed down significantly if it will also continue to be very spot, very case by case. Before, you had many shopkeepers that were closed on an annual basis, where the client would ask for certain rates for certain routes and you could have cargo with them and work together for a period of one year.
[00:46:22] At least today it is already giving us that. Customers are looking on a case-by-case basis because obviously, given the tariff levels, which by the way, today are around 126 percent over a preponderant scenario. They need to take care of the economics of their operation because they are calling for that. Therefore, this challenge will continue to exist. I think we are going to do well. It’s going to be a better year than 2021, but it’s not going to be a pre-pandemic level year. In the context of Chile, like many other countries in the region and the world, it was now taking the same thing, due to the economic incentives and the low comparative base of 2020. Chile is growing at over 15 percent in 2021. This is an important growth, unprecedented, but it has an explanation, which is a comparatively low growth rate for the year that is already underway, 2022, which is not expected to be more than 1.5 percent. There are even some predictions, by the way, some political uncertainty that we hope will soon dissipate, including having zero growth. So, in that context we also have pressures again that could somehow reduce the chances of success. But I think it’s going to be better than this year, so 2021. So there is good expectation from that point.
[00:47:45] It is good and good. We start the year with a lot of energy, as you say, I think there are many challenges and they will continue to be there. But as you say, I think that after several interviews and several talks with people in the industry, at least here in the U.S. and Mexico, I think that the global sentiment is shared a little bit. I don’t think people are optimistic or definitely not going to we’re not going to get back to pandemic levels, but I think we’re generally positive about what’s going to happen this year and well, I hope that’s the case. I imagine that everyone expects this to be the case. Gerardo, it is a pleasure to talk to you, we are running out of time, but before we go, tell us where you can be reached. How can people connect with you? Where can you learn more about Dillinger? All those who listen to us. What is the best for the best? Access and contact.
[00:48:43] Look, we have a very active participation in. There you can search by division and you will find the companies page in the first results. There is a lot of information there. We put out a newsletter, sometimes weekly, there are two or weekly and monthly on what is going on with logistics. We also have a blog where we present certain articles, sometimes recommendations on what to do in certain situations in the industry and also our page, which kind of dotcom divisions also have all the information and there is also an online quote. If someone needs to have a reference on rates for a route, there is also the perfect tool to connect with us. I am also at your disposal. You can look me up on LinkedIn and whatever I can help you with. I will be happy to be there supporting me. So the invitation is open. Hey, just a little note I left out about the 150th anniversary celebration. We are going to do it locally because I told you about the global initiatives, but locally we are also preparing an important event with our customers, which we will soon be announcing, celebrating this important milestone of 250 years and also to leave a precedent locally, that it is a milestone that we want to mark and we also want to mark it as a starting point of a new era, where although we are a long-standing company with a lot of experience, we are also a company that is modernizing day by day. We are pro continuous improvement, pro innovation, pro sustainability, so we invite all those who are interested to learn more about this and all the initiatives we are carrying out.
[00:50:22] Not perfect and obviously 150 years old. It is worth mentioning, worth celebrating. We wish you all the best this 2022 and wish you and your divi junker team all the best. Thank you very much for participating in this interview. Again my name is Enrique Alvarez with Supply Chain Now in Spanish and if you like this kind of talks with interesting people like Gerardo, please don’t hesitate to subscribe, share it with people in the industry or people who would be interested in getting into, maybe in the logistics industry. Thanks again Gerardo, we will be in touch and have a good week.
[00:50:57] Likewise, Enrique, see you later, thank you for everything.
