Prior discussions I’ve had with supply chain executives have alluded to the many challenges that exist in the BRIC economies. Brazil is the first letter in BRIC, and perhaps also stands for “bloody impossible” when it comes to importing into the country. At the root of this problem are the many regulatory requirements for importing and exporting materials into Brazil, and the challenges that go along with navigating these rules. The problem, like many emerging countries, is that no one really knows what rules apply and when, and since there are so many of them, then it appears as if it is often “the luck of the draw” when it comes to which customs officer is likely to oversee your shipment. This is particularly true for imports, as the government has openly declared a protectionist culture for many of the countries industries, which renders all inbound shipments subject to scrutiny.
This issue was alluded to in a recent study being initiated by one of the SCRC partner universities, Fundação Dom Cabral. This is coordinated by Professor Paulo Resende, to analyze the logistics costs of companies in Brazil. These costs involve items related to transportation, warehousing, packing and distribution, and of course, hidden import/export costs and supply chain delays/risks. This work is expected to enable the understanding of the formation and bottlenecks of key global logistics costs and thereby formulate possible solutions seeking to guarantee an increasing competitiveness for the firms that operate within the country.
This debate in Brazil around streamlining logistics regulations is relatively new, compared to other industrializing countries such as China and India. The reason for this is mainly due the resistance of the Brazilian government to trading liberalization, a necessary process to create more competition and encourage nationalized companies to seek higher efficiency.
The SCRC is partnering with Professor Resende to learn more in this space through a global logistics study, and will continue to pursue this and other BRIC related challenges in global logistics in the coming weeks and months.
The pursuit of higher efficiency involves improvements in logistics aspects allowing cost reduction.