Survey: Brazil shippers eye landed costs
A survey of Brazilian shippers found most are focused on reducing total landed costs on imports.
The survey, conducted by Philadelphia-based third-party logistics firm BDP International, found that seven out of 10 respondents cited total landed costs of imports into Brazil as their greatest challenge. These costs include purchase price, freight transportation, insurance and other inbound logistics costs to the port of destination, plus customs duties and other taxes on shipments.
'As Brazilian companies become part of the regional and global supply chains, they increasingly are looking to reduce the landed cost of their imports and speed their delivery to markets here,' said Roberto Croce, BDP's general manager in Brazil, in a statement.
The companies surveyed appear to be placing more emphasis on reducing overhead as they turn to logistics firms to better control inbound shipments and ensure compliance with complex import regulations that can impede cargo clearance and incur punitive penalties for documentation irregularities.
'Recognizing the impact of the total landed costs of imports on their profitability and competitiveness, many Brazilian companies are transferring both the process and accountability for import documentation and compliance penalties to third-party service providers,' Croce said.
The survey found that more than 60 percent of respondents are increasingly outsourcing their transportation-related functions, with nearly half reporting greater outsourcing of logistics management support as well.
'This trend was already underway prior to last year's global financial crisis, but economic conditions clearly accelerated it as companies refocused on their core businesses, and turned to external resources for their non-core activities,' Croce said.
Brazil endured the global economic recession better than the United States and Europe, mostly due to a vibrant intra-regional trade. Although the surveyed shippers source product from all over the world, 70 percent export primarily to other Latin American countries.
'Though its trade agreements with other Latin American countries as well as China and other countries in Asia, Brazil has managed to make significant progress in reducing its reliance on North America and Europe, insulating itself from the economic volatility affecting those relatively mature markets,' Croce said.
The survey found concerns among 90 percent of the shipper logistics managers respondents over Brazil's infrastructural readiness for the 2014 World Cup and 2016 Summer Olympics. Many raised doubts that much needed improvements will be finished in time to accommodate the business and consumer demands of these major national events.
'However it should be noted that our Growth Acceleration Programs, while somewhat behind schedule, are injecting BRL 60 billion ($35 billion) into infrastructure upgrades,' Croce said. 'We're admittedly in catch-up mode, but I'm quite confident that a number of the major projects will be completed in time for these events.'
The BDP survey was conducted by online questionnaire and distributed to 350 supply chain professionals. About 11 percent responded. Of those, 41 percent were in the chemical industry with the balance representing other industry sectors. More than 80 percent of the respondents are engaged in both imports and exports. Nearly 70 percent use ocean transport most frequently, compared to 22 percent who use primarily air transport. Over half the respondents worked for companies with annual revenues of more than $500 million. ' Chris Gillis
Survey: Brazil shippers eye landed costs
