The recent TradeHub Customs & Trade Innovation Summit from this year brought together leaders from some of the most promising startups in the foreign trade and logistics space, offering a fascinating view of how these emerging companies are revolutionizing the industry.
The Nearshoring Expert and Prodensa's CEO, Emilio Cadena participated in the event, and summarizes key insights from several conferences.
Foreign trade and logistics are fundamental pillars of the global economy. However, these sectors have long faced challenges in terms of efficiency, transparency, and access to capital. Fortunately, a new generation of startups is changing the landscape, leveraging technology and innovative business models to tackle these problems head-on.
One of the biggest obstacles for companies involved in foreign trade has traditionally been access to working capital.
"We quickly realized that we weren’t adding as much value by connecting companies with buyers, but rather by helping them bring these potential business relationships to life. The best way to do this was by providing fast, quality capital through technology," said Paulina Aguilar Vela, Co-Founder & General Manager of Mundi, during the panel.
Mundi focuses on providing financing solutions to companies with monthly revenues between $500,000 and $10 million, a segment often underserved by traditional banks. This approach is revolutionary for several reasons:
This democratization of access to capital is enabling more Latin American companies to participate in international trade, boosting economic growth and diversifying exports in the region.
The following chart shows the expected growth of the global trade finance market, with international banks being the largest players. Still, startups can serve sectors where large banks have little penetration.
Inventory management has always been a challenge for foreign trade companies, but data analytics is changing the game.
"When we talk about service level, one of the best ways I can be closer to the client, offer better response times, and even compete on price is by having the product in my warehouse. But determining the right amount of inventory, where to store it, how often to replenish it, and which products minimize the risk of tying up working capital is where data analytics and the constant evolution in analytics models allow us to provide an answer," said Johnny Turquie Sutton, Co-Founder & Director of IBSO.
IBSO uses advanced algorithms and big data to help companies optimize their inventory levels. The key benefits include:
Turquie Sutton also emphasized the importance of a holistic approach, where technology is implemented alongside solid processes and trained personnel to maximize its impact.
International trade inevitably involves handling multiple currencies and managing exchange rate risks. Dimitri Zaninovich, Co-founder of Efex, explained how his startup is simplifying this process.
"We create accounts in different countries according to your operation. These accounts are under your same business name. You don’t have to set up a company in another country, you don’t need a subsidiary, you don’t need an LLC. From an accounting standpoint, everything happens under your same company," he stated.
The advantages of this approach include:
Zaninovich highlighted the growing importance of these solutions in today’s context, as the volatility of the peso-dollar exchange rate has significantly impacted many businesses.
The trucking sector is another fundamental pillar of foreign trade but has traditionally been fragmented and under-technologized. Some startups are addressing this challenge.
"We are focused on accelerating payments in logistics through technology and financing. The industry typically operates on a 60-day payment cycle. How can a small micro-carrier survive a 60-day payment delay when their main cost of capital is divided into fuel, payroll, tolls, and maintenance, all of which must be paid before making the trip?" explained Guillermo Bosch, Co-Founder & COO of Solvento.
Bosch pointed out that about 200,000 companies are registered in Mexico, and more than 95% of them have fewer than five trucks. This fragmentation has historically hindered the adoption of technology and access to financing.
Solvento tackles these challenges in several ways:
The rise of e-commerce highlights the critical importance of last-mile logistics.
"Moova was born by identifying the problem and being the technological springboard to use idle capacity, making it efficient and providing technology to allow them to bring their skills to the e-commerce market," said Diego Rodall, Country Manager of Moova.
Moova is transforming last-mile logistics by leveraging idle capacity. By connecting delivery demand with underutilized small transportation companies, Moova optimizes existing resources rather than adding more vehicles to congested streets.
Rodall also emphasized the unique challenge of Mexico’s vast geography: "We have a regional complexity where we don’t concentrate all the volume in one city, but instead have Mexico City, Monterrey, Guadalajara, Mérida, Tijuana."
Moova even optimizes the cross-docking process, that is, it uses highly technological processes so that what comes in at night leaves the next morning. This efficiency is crucial to meet the increasingly shorter delivery times demanded by the market.
Despite the significant advances these startups are achieving, all the startup leaders agreed on the challenges and opportunities:
By leveraging technology and innovative business models, these companies are not only improving efficiency and reducing costs but also democratizing access to tools and services that were once reserved for large corporations.