No. 13 - Pontificia Universidad Javeriana, Cali

DOCUMENTOS DE TRABAJO FCEA
ISSN 1909-4469 / ISSNe 2422-4642
Año 2015
No. 13
Departamento de Gestión de Organizaciones
Logistics and transport in Colombia:
factors affecting the export performance
Diana Marcela Escandón Barbosa
Facultad de Ciencias Económicas y Administrativas, FCEA
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DOCUMENTOS DE TRABAJO FCEA
ISSN 1909-4469 / ISSNe 2422-4642
Año 2015
No. 13
Documento de Trabajo FCEA
ISSN 1909-4469 / ISSNe 2422-4642
Año 2015 No. 13
Logistics and transport in Colombia: factors affecting he export performance
Autor: Diana Marcela Escandón Barbosa. dmescandon@javerianacali.edu.co
Departamento de Gestión de Organizaciones
WEBSITE:
wp_fcea.javerianacali.edu.co
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Pedro Pablo Sanabria Pulido
Correspondencia, suscripciones y solicitudes
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©Sello Editorial Javeriano
Junio de 2015
La serie de Documentos de Trabajo FCEA pone a disposición para el análisis, discusión y retroalimentación de la comunidad académica los avances
y resultados preliminares del trabajo académico de los profesores de la Facultad de Ciencias Económicas y Administrativas. Estos documentos no
han sido sometidos a procesos de evaluación formal por pares internos ni externos a la Facultad. Se espera que muchos de estos documentos
posteriormente sean sometidos a evaluación en publicaciones especializadas.
Las opiniones expresadas en este documento son de exclusiva responsabilidad de los autores y no comprometen institucionalmente a la Facultad
de Ciencias Económicas y Administrativas, ni a la Pontificia Universidad Javeriana Cali.
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Content
1.
1.1
1.2
1.3
1.4
2.
2.1
3.
4.
5.
6.
Theoretical framework
Transaction costs theory
Transaction costs theory as an international approach
International logistics
Exports, costs of transport and infraestructure
Analysis of the Colombian context
The impact of imports and exports in the Colombian economy
Methodology
Results
Conclusions
References
5
5
7
9
13
14
14
17
20
26
27
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Logistics and transport in Colombia: factors affecting the
export performance
Diana Marcela Escandón Barbosa
dmescandon@javerianacali.edu.co
Departamento de Gestión de Organizaciones
Pontificia Universidad Javeriana Cali
ABSTRACT
The election of a country destination to export is one of the problems with greater interest
within the field of internationalization of companies. Companies seek to minimize labor costs,
transport, tariff and other issues affecting their choice. However, transportation costs and
logistics becomes in a key aspect in the enterprise competitiveness for access to international
markets. Therefore, from the application of a survey of 319 exporting companies in Colombia a
model of neural networks is performed to measure as factors affecting export performance
variables such as efficiency in the process of customs clearance and other border agencies, ease
and affordability of international shipping, transport infrastructure and technologies adequate,
level of competence of the local logistics industry, ability to track and trace consignments and
timely deliveries destination. Among the main findings is that the level of competence of the local
logistics industry manages to be the most important variable for export performance in
Colombian companies because they can improve pricing systems and the existence of lower
export costs.
Key words: International transport, Export Performance, Logistics
JEL Classification: F14; M16
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INTRODUCTION
In recent years there has been interest in analyzing the significance of transport costs
for the structure of trade and production due to the growing trend towards
globalization of markets and the need to compete in this new scenario. For industry,
logistics and transport it helps optimize production and distribution processes based
resource management to promote efficiency and competitiveness. Transportation
occupies one third of logistics costs and affects performance in international markets.
Therefore, the role of transport manages to be dominant because their participation
starts from the production process to distribution to the consumer becoming a
cornerstone for achieving high performance and can make the difference between
staying or leaving international markets.
The purpose of this article is to identify the logistics and transportation factors
affecting export performance of Colombian companies from the theory of transaction
costs, which helps with understanding the optimal choice of costs for the start of the
internationalization process.
To serve this purpose, the development of this article is performed as follows: a first
section where a brief literature review based on the theory of transaction costs ago.
The second section presents the analysis of logistics and transportation in Colombia
as a broad context for the article. Subsequently, it develops methodology performed.
The paper concludes with the presentation of the main findings and conclusions.
1. THEORETICAL FRAMEWORK
1.1. TRANSACTION COSTS THEORY
The Transaction Cost Theory (TCT) is part of the New Institutional Economics, and its
main focus is the definition of the determinants of coordinating transactions through
markets or hierarchies (Joskow, 1988). In this sense, the boundaries of the company
must be a function of the governance structure (Williamson, 2002, 2005), especially if
5
one considers that this governance structure ensures optimum adaptability of the
company to changes under the conditions of supply and demand. An important aspect
of the Theory of Transaction Costs is that not only focuses on the two ends of the
governance of transactions (ie, market vs. hierarchy) but also in other hybrid and
forms long-term contracts.
Williamson (1985) refers to these three generic forms of government: market,
hierarchy and a hybrid of both. The hierarchy is characterized by cooperation, by
administrative controls and the absence of a contractual law. On the other hand,
market parties are autonomous and have the strong incentive that stems the flow of
net income accumulated as a result of cost reduction and efficient adaptation. Here the
contract law is supposed. The hybrid form is a combination between the market and
hierarchy, where incentives are sacrificed in favor of more coordination, compared
with the market, or where more cooperation risks for greater intensity of incentives,
compared with the hierarchical form.
Theory of Transaction Costs (TCT) seeks to explain the reason that economic
transactions are organized in the way they are developed in modern society
(Williamson, 1994). Specifically, why are some economic transactions internalized
within the limits of the companies while others are acquired through third parties?
The answer to this question is that the activities are internalized within the company
when there is some kind of market failure. The Transaction Costs Theory argues that
the costs of conducting transactions through the market can be reduced through
mechanisms that are not markets (Coase, 1937; Williamson, 1975).
The TCT notes that these transaction costs that drive economic organization are as
important as the even more significant costs of production, or perhaps, as in
production, costs are easier to assess with respect to transaction costs therefore,
transaction costs are an important part of the total costs of a company. Transaction
costs include ex-ante cost of search and information costs make agreements and
6
negotiations and safeguard the costs of the agreement. The ex-post costs involve: the
costs of the assessment of entry, production measurement and monitoring and
(Williamson, 1985) application.
The TCT emerges from the relative failure of neoclassical economic theory to
adequately address and explain economic phenomena. It focused on the paradigm of
perfect competition, the neoclassical view of the firm as a production function is often
criticized for being reductionist, simplistic and unrealistic. In this vision, the company
is considered a black box comprised of labor and capital inputs and the output are the
products (Alchian and Woodward, 1988). TCT researchers refer to the company as
open to consider further how it works in reality black box. In contrast to the
neoclassical view, the TCT considers the company as a hierarchy that adds value to
economize transaction costs. The TCT says the company, in many cases, provides a
relatively efficient method of organizing in relation to the market, due to the
optimization of transaction costs.
1.2. TRANSACTION COSTS THEORY AS INTERNATIONAL APPROACH
The economic approach to internationalization focuses on the company and its
environment (Andersson, 2000) and its fundamental assumption is that companies
are rational in their choice of investments, because the decision maker has access to
perfect information and therefore, choose the optimal solution. This approach focuses
on two aspects of international production: the ownership of assets employed in
productive activities in different countries and the localization pattern of this type of
activity (Benito and Gripsrud, 1992).
According to this approach, the choice of where to invest abroad is a deliberate
decision made in order to obtain profitability (Buckley et al., 2007). Economic
theories predict that a company will choose the place of your investment that
minimizes the total cost. The differences in labor costs, transportation costs, existence
7
of tariffs and trade barriers and government policy are crucial to the choice of location
(Benito and Gripsrud, 1992). Lack of experience is another factor considered in
determining the location decision because it generates certain costs. However, when
the company goes international it identifies your competitive advantage and seeking
these advantages in a market to provide the best conditions for the production and /
or sales. (Glucker, 2006). Are part of this economic approach, Dunning's eclectic
theory, the theory of product life cycle and the Theory of transaction costs, which have
sought to promote low-cost internationalization, through low-risk strategies such as
exporting.
With Transaction Costs theory it is assumed that the company is internationalized
when the cost of domestic transaction balances the cost of the same transaction that is
based on the market (Hermannsdottir, 2008). Coase (1937) points out that there are
conditions under which it is more efficient for a company to create an internal market
instead of entering a foreign market. These are the transaction costs of activities in the
foreign market. In a perfectly competitive market, transactions are conducted under
free transaction costs, this is because the information is freely available, the decision
is rational, there are always alternative suppliers and buyers and have no specific
transactions spillovers from one period to another. However, these conditions rarely
occur, incurred transaction costs because there is a need for efforts to reorganization,
implementation and monitoring of transactions between interdependent firms
(Hermannsdottir, 2008).
The Transaction Costs Theory assumes that a multinational company has developed a
specific advantage in their home market. This advantage can be developed intangible
assets that give the company greater productivity. The market for this type of
intangible assets or know-how is characterized by imperfections that can be created
as a result of differences in price and transfer, leading to higher costs associated with
the transaction with another company. Therefore, a high level of transaction costs
resulting in a preference for the internalization of the transaction. For this reason,
8
companies decide to produce abroad if they perceive that reducing transaction costs
resulting from the replacement of external imperfect markets will outweigh the costs
of such activities internally (Johanson and Mattson, 1987).
Otherwise, sales license or some other form of different international export activity
will satisfy foreign markets. In short, for the company TCT choose the location and
form of organization where transaction costs are minimized (Coviello and Martin,
1999).
1.3. INTERNATIONAL LOGISTICS
Two of the main engines of globalization in recent years have been: a) the reduction of
trade tariffs in commerce and, b) the sharp drop in the costs of communication and
transportation. The regime of "free trade" encouraged by the United States in the
post-war as represented by the General Agreement on Tariffs and Trade (GATT) and
the World Trade Organization (WTO) has greatly reduced different types of trade
barriers between countries, thereby encouraging the rapid growth of cross-border
movement of goods largely in North America, Europe, East Asia.
At the same time, technological change in the transport and information technology
have ushered in a period of transportation of high value at low cost.
In fact, the combined effects of changes in transport and information technologies are
not only visible in the supply of traditional transport services with more speed,
reliability and cost reduction, but also in introducing new types of transport
(Chatterjee and Tsai, 2002).
The costs of land and sea transport have declined steadily after the postwar years
(Frankel, 1997). The air cargo rates have not only fallen in recent years, air travel with
jet engine and cooling have made the trade in perishable goods such as cut flowers
and live lobsters. Air transport routinely carries large volumes of goods with high
added value and mail packages through the continents.
9
There is controversy regarding the role of technology in explaining these decreasing
costs. Contrary to Krugman (1995), Board et al. (1999) say that technological
progress has been very influential in explaining the decline in transportation costs.
Much of this technical improvement is derived from information technologies, which
not only increase the capacity and functionality of cars, trains, ships and planes, as
well as the road and the system of air traffic control, but also, it makes possible the
functions of organization and coordination that include transportation logistics and
supply chain management (Chatterjee and Tsai, 2002).
These technologies enable the management and coordination of various economic
activities worldwide. They allow the increase of the division of labor in production
processes and components divided geographically. In this context, cost reduction has
encouraged global sourcing as manufacturers and wholesalers to supply intermediate
and final goods to the global market. While sea freight and other transport costs have
been declining steadily over time which increases the flow of goods between
countries, the current form of globalization with horizontal integration and chains of
interdependent production has greatly facilitated logistical support, which has
enabled countries to fully capture the benefits of transport improvements. In turn, the
global production chains promote the development and improvement of new logistic
innovations (Chatterjee and Tsai, 2002).
In general, logistics, defined as the integrated analysis and active management of the
global supply chain of a company, from the sources of inputs to delivery of finished
products, has had a huge impact on services freight (Willoughby, 2000). Managers
freight market should compete in transportation costs and service quality, and this
has put downward pressure on total logistics costs (including storage and transport)
by approximately 40% on average. Such cost reductions will vary depending on the
type of industry and trading partners (Schneider, 1998).
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Logistics is increasing in importance in the process of globalization, raising
modernization of economies, accompanied by the continuous lowering of tariffs and
the opening of closed economies, it is encouraging transnational corporations to
streamline production systems worldwide. These trends in recent years have
increased trade to be doubled, while global production has grown only 50%. This
growing share of trade over production puts pressure on distribution systems where
cost minimization; profit maximization and strengthening market presence are all
sought (Chatterjee and Tsai, 2002).
The aim of transport logistics is then to, compress time along the entire supply chain.
This involves not only reducing time delivery of shipments from suppliers of raw
materials, intermediate goods and components to factories, but also the distribution
of the end of the factories products to wholesalers, retailers end users. Companies get
value from reduced stock-keeping units and being able to respond quickly to market
conditions (Caldwell, 1998).
Another improvement of the service offered by providers of transport logistics,
namely reducing order cycle times, productivity gains confers on producers and
industrial carriers. In transportation, logistics information replaces inventory.
Logistics can reduce the accumulation of stock, eliminating costly bottlenecks and
delays in the delivery, and the time of supply and cost savings to participants of the
supply chain. While transportation is only one component of integrated logistics
management, the current trend is towards increasing the contribution of information
technology, and therefore, is crucial (Chatterjee and Tsai, 2002).
Transportation is not limited only to the movement of goods through space. And not
only it performed a liaison function between mere preproduction (moving inputs) and
post (delivery of outputs). Now, there is a component of value added which is
incorporated in the strategic management and operational business decisions through
transport logistics (Chatterjee and Tsai, 2002).
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Currently, the field of transport logistics has grown in a way that is influencing what
to produce, where to produce and in what quantities. Thus, the transport function is
undergoing a structural change, which is reflected in the evolution of transport
logistics. Logistics adds value in both phases of pre-production and post-production
logistics referred to as input and output (Chatterjee and Tsai, 2002). Porter (1990) in
the discussion of the competitive advantage of companies draws attention to the
important role of logistics in the value chain.
The goal of inbound logistics is to harmonize supply chains with production needs so
that minimizing costs in purchasing management and inventory can be achieved.
Inbound logistics also involves the choice of the optimal mode and intermodal
coordination. Decisions will also need to take with regard to the distribution network:
deliveries must be made directly to the factory or entries stored in the central or
regional warehouses.
Outbound logistics has three elements, namely, whether the shipment of factories
must be stored in warehouses, stored in trucks or sent to customers directly. If they
are stored in warehouses, decisions must be made regarding the logistics provider.
The store features, location, transport routes, the efficiency of loading, unloading and
storage. All these variables are part of strategic decisions.
In the early stages of transport and distribution logistics, the focus was on optimizing
inbound logistics and outbound logistics for individual shipments. The current trend
is towards global optimization, that is, throughout the value chain. The objective is to
synergize integrated logistics delivery and reduce shipping costs and cycle time.
Adding flexibility and accuracy of shipments is included. For purposes of this study,
analysis of international logistics focuses on freight transport, with particular
emphasis on transportation costs (Chatterjee and Tsai, 2002).
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1.4. EXPORTS, COSTS OF TRANSPORT AND INFRASTRUCTURE
Based on Melitz (2003), Bernard et al. (2006) show in a theoretical model of
international trade as a fall in trade costs increases costs of non-exporting firms,
which find more likely to start exporting and for existing exporters, it would be an
opportunity to increase their exports. An important part of business costs are
transportation costs. Trade volumes between countries decrease rapidly with
distance, and more specifically because of transportation costs associated with it
(Disdier and Head, 2008).
Limao and Venables (2001) estimate that a 10% increase in transport costs, trade
volumes is reduced by approximately 20%. Anderson and Van Wincoop (2004) argue
that trade costs remain high even among highly integrated economies and in the
absence of informal trade barriers. The transit time is increasingly important for
competitive strategies, specifically the production and delivery time. Hummels (2001)
found that increased transit time between two countries reduces the probability of
exporting 1 to 1.5%.
Transport costs are determined not only by distance but by the quality of the
infrastructure. Bougheas et al. (1999) develop a model of bilateral trade with
transport costs depending on the level of infrastructure. Limao and Venables (2001)
find that a deteriorating infrastructure raises transportation costs and reduced
trading volumes. Francois and Manchin (2007) show that the infrastructure and
institutional quality are important determinants not only export levels, but also the
likelihood that exports are carried out, even more important than changes in tariffs.
Limao and Venables (2001) argue that the poor national transport infrastructure can
prevent a country participating in global production networks. Moreover, some places
are better locations for exporters due to better access to international markets
(Hummels, 2001).
13
The various studies that have examined the impact of infrastructure in trade costs
have reached the conclusion that the level / state of infrastructure is one of the main
determinants of international trade (Limao and Venables, 2001; Francois and
Manchin; 2006). While many developing countries have not been able to take
advantage of globalization to increase trade, others have traded little or nothing with
the rest of the world, mainly due to lack of infrastructure to produce and compete
effectively in exporting markets.
Bougheas et al (1999) the first to introduce variables argued that differences in the
quality and quantity of infrastructure across countries could be responsible for
differences in their trade competitiveness infrastructure. These authors showed that
an improvement in infrastructure through its impact on transport costs has a positive
influence on international trade. Similarly, Clark et al. (2004) found that the
infrastructure and port facilities contribute to ocean freight as a significant
determinant of bilateral trade.
2. ANALYSIS OF COLOMBIAN CONTEXT
2.1. THE IMPACT OF IMPORTS AND EXPORTS IN THE COLOMBIAN ECONOMY
Exports of goods and services in Colombia play an important role given that the
participation of the same was 17% as a percentage of GDP (for the periods between
2009 and 2013). However, when this indicator is compared with its main Latin
American neighbors (Table 1), Colombia lags ranking in ninth place (of the eleven
countries compared), mainly due to the lack of competitiveness in the country as
confirmed by the Global Indicator competitiveness 2013-2014 of the World Economic
Forum (WEF, for its acronym in English), which shows that in 2009 the country stood
at 69th place among 133 countries and four years later is in the same position among
148 countries.
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Table 1 Exports as %GDP in some Latin American countries
Country
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Argentina
21,5
20,9
20,43
19,84
19,91
17,4
17,5
17,79
15,8
14,27
Bolivia
31,14
35,55
41,77
41,8
44,91
35,72
41,19
44,12
47,25
N.D.
Brazil
16,43
15,13
14,37
13,36
13,66
10,98
10,87
11,89
12,59
12,55
Chile
37,86
38,38
42,43
43,83
41,51
37,17
38,06
38,02
34,24
32,56
Colombia
16,77
16,85
17,64
16,54
17,79
16,03
15,94
18,74
18,26
17,75
Costa Rica
46,26
48,5
49,13
48,71
45,44
42,28
38,17
37,18
37,2
35,14
Ecuador
24,55
27,62
30,33
31,93
34,16
25,25
28,74
31,54
30,93
30,53
Mexico
26,23
26,57
27,56
27,74
27,9
27,28
29,87
31,25
32,64
37,75
Panama
67,61
75,49
76,71
76,09
78,75
75,53
70,58
79,29
79,79
71,01
Peru
22,49
26,55
30,22
30,5
28,44
25,19
26,56
29,66
26,6
23,74
Venezuela
36,2
39,66
36,52
31,13
30,82
18,07
28,53
29,94
26,17
N.D.
Source: Prepared by the authors with information from the page www.bancomundial.org
Within the above figures are included exports of oil and coal quetienen an important
role in Colombian exports, ranging between 65% and 67% of total exports between
2011 and 2013. If these exports are excluded earlier figures for not being caused by
the traditional industrial base, the share of exports in GDP would increase from 17%
to less than 8%, moving further away from its Latin American neighbors (see Figure
1).
15
Figure 1. The 10 most competitive countries in Latin America
In 2006 - 2007
In 2013 - 2014
between 122
between 122
Place
countries
countries
1
Chile (27)
Chile (34)
2
Mexico (52)
Panama (40)
3
El Salvador (53)
Costa Rica (54)
4
Panama (60)
Mexico (55)
5
Brazil (56)
Colombia (63)
6
Brazil (66)
Peru (61)
7
Costa Rica (68)
Colombia (69)
8
Argentina (70)
Ecuador (71)
9
Peru (78)
Uruguay (85)
10
Uruguay (79)
Guatemala (86)
Source: Private Council of Competitiveness (Report 2013-2014)
The competitiveness and productivity policy defined by the National Competitiveness
Commission proposes that in 2032, Colombia will be one of the three most
competitive countries in Latin America and have a high level of income per person
equivalent to a country with medium income through an export economy of goods
and services with high added value and innovation with a business environment that
encourages local and foreign investment, fosters regional convergence, improve
formal employment opportunities, raise the quality of life and reduce poverty levels
substantially.
In terms of infrastructure and transport logistics, Colombia participates more in the
terrestrial environment (see Figure 2) due to its flexibility, as it is a door to door
service and there is more supply than demand. Thus, the share of rail transport is
deliberately minimized and the river transport has never been developed. Railways
currently carry only coal export and pose serious challenges in terms of
infrastructure. The truck is definitely the most important mode of transport, it
accounts for 81% of the cargo transported measured in tons / km. But the
performance of the trucking industry is poor, it is characterized by a high degree of
16
atomization and informality and the average life of equipment is over 20 years. In
addition, there are serious limitations in specialized services such as cold chain and a
small fleet of container trailers.
Millions of USD$
Figure 2 Method of clearance of exports (2013) of the main exporter departments
3.000
2.000
1.000
Antioquia
Maritimo
Maritime
Bogota
Valle
Aereo
Air
Bolivar
Terrestre
Terrestrial
Atlantico
C/marca
Otros
Other
Source: Prepared by the authors with information from the page www.colombiatrade.com.co
For the movement of this type of transport, the country has a road network of 203 392
km, of which 17,037 km (8.3%) are primary roads that are under concession for 30%
and 70% respectively by the Institute National Roads (INVIAS). On secondary roads it
has 44 399 km (21.9%) by departments and tertiary roads 141 955 km (69.8%) by
INVIAS, departments and municipalities.
3. METHODOLOGY
To meet the objectives of this study and analyze the influence of logistics and
international transport on the export performance of Colombian companies, a
database that includes 319 surveys exporters used. This survey was conducted in
2013 to exporters of major cities (Bogota, Medellin, Cali, Barranquilla, Bucaramanga
and other) starting from a preflight in the directory of exporters Proexport
17
(Colombian entity in charge of the Promotion Tourism, Investment and Export
Colombia).
To measure aspects of logistics and transport, take the questionnaire the following
variables that are dichotomous type, where 1 is yes and 2 is No.
• Efficiency in the process of customs clearance and other border agencies
• There ease and affordability of international shipments
• Transport infrastructure and information technology is adequate
• There is competition on the local logistics industry
• There are easy to track and trace shipments
• Punctuality is presented in deliveries destination
These variables are related to the export performance of companies also join
measured with dichotomous variable (1 is yes and 2 is not), asking if the company has
increased exports in recent years.
To establish the influence of the variables logistics and international transport on
export performance, a model of neural networks is estimated.
The neural network model viewed as a derivation of biological networks (Row and
Martinez 1995), refers to a number of networks that are connected in parallel, trying
to interact as a nervous system. Through this model can be grouped a number of
variables that in the case of economic and administrative field are useful as a
methodological tool (Hawley, et al., 1990). The method of Artificial Neural Network
(ANN) is used to obtain data on the environment and achieve iteration mathematical
algorithms to find a solution according to the object of analysis. This is a
computational tool to analyze the required variables and their interaction.
18
Table 1 Definitions of ANN
Author
Kung (1993)
Fausett (1994)
Bishop (1996)
Chen (1998)
Lin (1996)
Hassoun (1995)
Definition
System characterized by an adaptive array combined with parallel
processing techniques
System where the information is processed with performance characteristics
similar to biological neural networks
Classical statistical method proposed for pattern recognition
Mathematical models that allow a simulation of the brain and how it works
Systems that organize information based on principles similar to those that
allow the structure of the human brain
Computational model consisting of adaptive processing units with high
interconnection between them
Source: Own elaboration based on Serrano, Soria and Martin (2009)
According to Table 1 to the points in Table 1 it can be demonstrated that the majority
of authors agree to define the ANN as systems that simulate the functioning and
structure of the human brain as a tool for processing and analysis.
ANNs are constituted by a series of layers, whose inputs find connected to the output
through a single neuron or an assembly thereof, while any networks layers
responsible for receiving sensory information also output layers and layers
intermediate. The architecture of the ANN is determined as follows: There is an input
layer is constituted by three neurons, which are the three independent variables. Each
connection between synaptic neurons is associated weight that represents the
interaction between each.
The equation representing the input layer of the network is as follows:
𝑛𝑒𝑡𝑗 =
𝑤𝑖𝑗 𝑥𝑖 + 𝜃𝑗
𝑖
In which:
𝑛𝑒𝑡𝑗 : The input of a neuron j
𝜃𝑗 : Is the threshold (bias) of the neuron j
19
The hidden layer is estimated to reduce the time used to calculate the result; hidden
layers are defined by discretion of the investigator. In this research two hidden layers
in order that results are tighter in the output layer is taken into account.
The transfer function of the output layer neuron j is represented in the following
equation, with sigmoid type:
𝑦𝑗 =
1
1 + 𝑒 −𝑛𝑒𝑡 𝑗
Hawley, et al (1990) suggest that the sigmoid function is used in the estimates of the
ANN thus allows better approximations of any function with a specific number of
discontinuities.
4. RESULTS
Figure 3 shows the neural network model used in this study; the architecture is
composed of six neurons in the input layer, two neurons in the hidden layer and
neuron in the output layer.
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Figure 3 Neural Network Model
Source: Own elaboration –SPSS
For those surveyed entrepreneurs, the competence of the logistics industry is one of
the main factors affecting the performance of businesses nationwide, followed by
process efficiency of customs. As a result, the ease and affordability of international
trade is generated, as well as the ease of monitoring and traceability. For
entrepreneurs, transport infrastructure and technology, although they are
determining factors in its performance are classified lesser order of importance, just
as the timeliness of deliveries destination.
21
Table 2 Level of significance of variables
Competencia
de la
logistica local
Competition
from
theindustria
current logistics
industry
Efficiency
the process
of clearance
and
Eficiencia
delof
proceso
de despacho
de aduanas…
other border agencies
Ease Facilidad
and affordability
of international
y asequibilidad
de los envios…
shipments
Facility
to track
and
traceyshipments
Facilidad
para
seguir
localizar envios
Transport infrastructure and information
technology
Infraestructura de
transporte y tecnologías de…
Punctuality of deliveries destination
Puntualidad de los envios al destino
0,0%
20,0%
40,0%
60,0%
80,0%
100,0%
Source: Own elaboration –SPSS
• Competition of the local logistics industry (100%):
It is the first major factor for employers because the country's development is closely
linked to the growth of this sector. For Colombian exporters, having logistical
competitors destination that can offer lower prices country, implies the possibility of
assuming lower costs in the process, a situation that would improve the level of
exports of enterprises. This result is consistent with the statements by Schneider
(1998), who notes that the companies responsible for the logistics of transport must
compete on cost and quality of service, a situation that has pushed a decrease in total
logistics costs
New trade agreements require improvements in infrastructure, management of
transport companies and operations management. Therefore, a need to streamline
processes, make better monitoring and negotiating with shipping lines with the
purpose of making more competitive Colombian logistics companies. It notes that
logistics cover, other than freight, planning and organization of cargo throughout the
value chain as a quality element.
22
Although the country has improved in the time to import and export about their Latin
American peers (Export: Colombia 14 days - LATCO - 16.8 days; Import: Colombia 13
days - LATCO: 18.7 days) 1, costs remain high vs. the same pairs (Export: Colombia
US2.355 - LATCO - US $ 1,299; Import: Colombia US $ 2,470 - LATCO: US $ 1,691) in
January.
• Process efficiency of customs clearance and other border agencies (47%):
For entrepreneurs, this is the second important factor and its justification is linked to
the arguments mentioned above. The efficiency of the clearance process reduces time
in the processes along the supply chain (Caldwell, 1998), impacting favorably on
export performance.
The importance given to Colombian companies this factor can be analyzed to confront
the figures of the times and duration customs costs and technical control as well as the
time and cost of ports and terminals management regarding Panama Colombia and
Mexico (Table 3), who are ranked first and fourth, respectively in cross-border trade
in Latin America and Caribbean. It can be concluded that there is a significant gap in
the days of export procedures but cost issues, variations can exceed 100% with peers
countries analyzed. Opposite situation exists in imports, where the costs of the
proceedings in Colombia are less than the peer countries analyzed, reaching 100%.
Table 3 Days and costs incurred between Colombia, Panama and Mexico
Concept
Customs clearance
and technical
control
Ports and terminal
handling
Place in LATCO
(out of 28
countries)
EXPORT
Colombia
Panama
Mexico
Days US$ Days US$ Days US$
IMPORT
Colombia
Panama
Mexico
Days US$ Days US$ Days US$
2
350
1
50
2
150
2
170
1
225
2
300
3
170
1
65
2
200
2
150
1
265
3
300
21
1
4
21
1
4
23
Source: Prepared by the authors based information from the page of Doing Business 2015
• Ease and affordability of international shipments (38.2%):
This variable analyzed is part of the Logistics Performance Index of the World Bank,
which carries a report every two years, which reflects perceptions of a country's
logistics based on efficiency of the clearance process customs, quality of infrastructure
related to trade and transport, ease of agreeing competitively priced shipments,
quality of logistics services, ability to track and trace consignments, and frequency
with which shipments reach the consignee at the scheduled time. The index ranges
from 1 to 5, where the highest score representing better performance.
• Ability to track and trace shipments (23.9%):
This factor is fourth in importance for Colombian entrepreneurs. While it is very
important for most companies in the world know where your shipments and whether
there is compliance with the connections and the time scheduled traffic, these
responsibilities in the management of information are transferred to the transport
companies or logistics operators who are obligated to provide location information of
shipments to companies (Chatterjee and Tsai, 2002). Today, entrepreneurs are more
demanding and impatient and choosing who carry their load, take into account
whether the company has an efficient information management either by a
department or personalized customer service through technology platforms that
provide all the information in real time through a web page. Being blind regarding the
information and shipping status, it can give rise to a claim and can also generate a fail
in the delivery.
24
• Transport infrastructure and information technology (17.6%):
This factor according to the results obtained by the model, was located on the fifth
place with 17.6% of importance for Colombian entrepreneurs. While it is true that the
international trend is towards a globalized world and accelerated trade liberalization
of the country, following the signing of the various trade agreements, make transport
infrastructure and information technology fundamental to compete in the market,
entrepreneurs prefer to be focused on making more competitive products with higher
added value, provide better service and a differentiation that makes distinguish
compared to competitive products. The importance of transport infrastructure and
information technology coincides with the statement made by Chatterjee and Tsai
(2002), about the combined effects of changes in transport and information
technology in the provision of transport services with higher efficiency conditions.
• Timeliness of deliveries destination (4.9%):
For entrepreneurs the timeliness of shipments to the destination factor is less weight
in the variables that influence the performance of exports. This shows that the
importance in delivering their shipments, even if they do not arrive on time, it is more
important. Also, they know that concepts such as product quality, customer service,
competitive pricing, differentiation, after-sales service and value added, among others,
narrow trade relations with their end customers. The aim of transport logistics is then
compress time along the entire supply chain (Willoughby, 2000). This involves not
only reducing time delivery of shipments from suppliers of raw materials,
intermediate goods and components to factories, but also the distribution of the final
products from factories to wholesalers, retailers, and final users. Companies gain
value by reducing stock-keeping units and being able to respond quickly to market
conditions (Caldwell, 1998).
25
5. CONCLUSIONS
The competitiveness of a country is defined by the dynamics of trade, not only seen as
the flow of people, information and goods, but for the integrity and generation of
added value. Thus, infrastructure, transport and logistics, are crucial to the country's
development factors. In Colombia, the lack of a multimodal transport policy and
development of the different modes, has led to more than 80% of the load is carried
by road, followed by the railway with a share around 24% (the which 99% is coal
transportation). The delay in the implementation of infrastructure projects has led to
the country to lose competitiveness against its Latin American peers. The various
studies that have examined the impact of infrastructure in trade costs have reached
the conclusion that the level / state of infrastructure is one of the main determinants
of international trade (Bougheas et al, 1999; Limao and Venables, 2001; Francois and
Manchin, 2006).
Regarding the influence of logistical factors in the export performance of Colombian
companies, it is concluded that the level of exports of these companies is strongly
influenced by logistics, whose importance has increased in the process of
globalization; encouraging companies to reduce costs in production systems. Since the
purpose of the transport logistics to reduce the time throughout the supply chain,
companies need to cut costs in shipping, at the time of delivery, in the distribution of
final products. However, for Colombian companies, concern about the impact of
logistics on performance, competition comes primarily from the national logistics
system faced to enter other markets, and having to compete on cost with local
logistics companies, own competitive advantages of belonging to these markets.
Additionally, Colombian companies believe that efficiency in the process of customs
clearance, is also central to the export activity of companies, because it enables help
reduce operating costs. Although shipping issues are important to these companies,
the answers of respondents placed these variables in lower levels of importance, and
26
although facing any problem in sending directly impacts customer for Colombian
companies the cost issue is prefixed compared to level of service.
In the legislature a more active role both in the presentation of new proposals as well
as the agility of passing laws, seeking the common good rather than the same interests
(personal or political) is required. In the judiciary, as quickly as required in the
resolution of cases resulted in increased productivity court to do so, the improvement
of human resources required through a process of selection and evaluation stricter
ensuring its good performance.
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