Logiport Conference Eyes Infrastructure

Even Brazil, one of the top global performers over the past few years, has not been immune to the impact of the worldwide recession. Its exports plunged by 21.9 percent, and imports by 21.6 percent during the first two months of 2009, year on year. But when shippers, carriers, port operators and logistics providers met for the JoC South America Logiport Conference in Sao Paulo, Brazil, this week, they focused not on the global economic crisis -- or flagging demand for Brazilian exports in China -- but on strategies for upgrading the logistics infrastructure of Brazil so that it can continue to outperform competitors over the long term.

Panelists agreed that the current crisis provides opportunities to re-focus attention on the costly structural weaknesses of Brazil's ports, roads and railroads that were obscured by the tremendous growth of the past few years.

When it comes to ports, Julian Thomas, president of Hamburg Sud Brasil, said that his company suffered considerably as a result of port inefficiency even last year, during the boom. Thomas said Hamburg Sud spent over 15,000 total waiting hours in South American ports from the first through the third quarters of 2008.

Brazil's road and railroad infrastructures are also in need of major upgrades, participants at the conference agreed. Oswaldo D. Castro, Jr., general director of Expresso Aracatuba Transporte e Logistica, said, "The Brazilian road network is so poor; it is totally destroyed." Castro blamed Brazilian bureaucrats, arguing that they are road engineers who "have no idea of the culture of logistics." The fundamental issues are political and cultural, not just economic, he said.

Rather than wait until the economy recovers before investing in such improvements, Brazil needs to act quickly, said Ricardo Melchiori, chief operations director at CEVA Logistics Brasil. "We should not stop any plans, but we should accelerate our plans for the infrastructure" so that Brazil is better prepared after the recession ends.