Logistics Damage

Source: Economic Week The FEN damages will have a medium-term impact.

The sector represents 7.2% of Piura’s GDP. Recovery will depend on the speed with which transport routes, mainly land, are rebuilt. 1,700 km of roads have been destroyed and their total reconstruction cost would amount to US $ 1,479 million, according to APOYO Consultoría (AC). “The (land) accesses from Virú (south of Trujillo) to the north have been blocked. The supply to Piura, Chiclayo and part of Trujillo has been done via cabotage, ”says Andrés Diez, corporate manager of Yobel SCM.

The FEN raised operating costs for both carriers and their customers. The cost of transporters to supply the affected areas increased more than 300%, adds Diez. Following that, Yobel’s sales were down 25% of which 17 percentage points were due to damage from the north. Although the companies most affected by transportation have been those in the mass consumption, fashion, textile and direct sales segment, the increase in distribution and transportation costs in the medium term will vary according to the type of product. At least in the short term, the transportation of heavy loads of supplies for construction will face greater difficulties due to the size of the vehicles required for these tasks and the use of alternative routes. “It is decided to divide the load into smaller vehicles, which raises the cost of distribution by (around) 10% for each fractional load” adds Ángel Becerra, director of GS1. AC points out that the rehabilitation of the Panamericana Norte highway, with the exception of the 450 km Del Sol highway that connects Piura with Talara, will be quick because it involves private concessions. The latter could accelerate the demand for transport services in 2018.

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