PriceSmart is redesigning its logistics network to navigate high-tariff, low-infrastructure markets. Regional distribution centers, trade zone integration, and selective in-sourcing are being used to manage cost volatility and service reliability at the same time.
In Brief:
• New DCs in Guatemala, Trinidad, and the Dominican Republic reduce lead times and support cost stability in constrained markets
• Free trade zone operations in the U.S. and Costa Rica allow duty-free consolidation and export
• In-sourced trucking in select countries reflects a shift toward fulfilment control where third-party reliability is limited
PriceSmart is building out regional distribution centers in Central America and the Caribbean, not just to shorten delivery times, but to regain control over how goods move in complex markets.
New facilities in Guatemala, Trinidad, and the Dominican Republic are being paired with upgrades to its Panama hub and cold chain capacity. But this isn’t a typical regionalisation story. The company is also integrating free trade zone (FTZ) operations in the U.S. and Costa Rica to consolidate shipments before export, avoiding duties and stabilising landed costs.
This model is designed for structural complexity: markets with fragmented infrastructure, volatile tariffs, and limited third-party logistics capacity. By embedding control points, DCs, FTZs, and in-house fleet capacity, PriceSmart is building a logistics network that can flex without exposing the business to sudden cost spikes or service failure.
Free Trade Zones as a Policy Hedge
The company’s FTZ operations are increasingly being used as strategic tools. Goods can be held, repackaged, and re-exported duty-free, giving PriceSmart greater control over timing, classification, and destination routing. This is particularly important as trade rules shift across member countries.
Upstream, PriceSmart is testing consolidation strategies in China to reduce origin-side fragmentation and streamline direct-to-market flows. These are incremental moves, but together they reduce risk and improve cost predictability, without increasing complexity at the destination.
Owning the Last Mile Where It Matters
In some countries, PriceSmart has begun operating its own fleet of trucks to move goods directly to clubs. This isn’t about cost savings. It’s a response to reliability gaps in the local market, where delays, poor route coverage, or limited capacity undermine service consistency.
Rather than fully in-sourcing logistics, the company is making selective moves where the control risk justifies the operational burden. It’s a model designed for practical flexibility: outsource where the market can deliver, own where it can’t.
Why Control Is Becoming the Margin Lever
This approach reflects a broader shift in how companies are managing logistics in emerging or high-friction markets. Physical proximity to demand is no longer enough. The differentiator is control, over duties, over delivery windows, and over how inventory is routed through regions with uneven infrastructure.
PriceSmart is showing how logistics can be treated as a structural risk mitigator, not just a cost centre. As more markets adopt tariffs, tighten trade rules, or struggle with service reliability, companies with built-in logistics flexibility will be better positioned to hold margin, and protect customer experience.
