JEITINHO

JEITINHO

Very loosely translated from Portuguese, the slang word atop this column is used by Brazilians to describe how things somehow always get done. Some things may need a little fixing here and there, but Brazilians find a way. This year, Alianca Lines is celebrating its 50th year as a Brazilian-flag carrier that has indeed found a way to succeed in a country that has not yet lived up to its potential. 'Yes, this has been a good year for Alianca and for Brazil despite the country's many ups and downs,' said Jose Roberto Salgado, Alianca's U.S. general manager. This year, container trade with Brazil is firing on both northbound and southbound cylinders. Through the third quarter, U.S. import volume is up 4% while exports have recovered quickly from declines of the past two years by registering a 13 0ain. Over the past 24 months, Alianca's volume has doubled. Salgado gives the credit to Hamburg-Sud, which bought the company in 1998. 'Hamburg-Sud captured the opportunity to invest in Alianca, making us much more competitive as a niche carrier,' Salgado said. He cited the carrier's expanded U.S. sales network and the addition of two roll-on, roll-off ships in the Gulf serving Mexico and the east coast of South America. Alianca's new parent quickly approved both of those initiatives.

Brazil is not the easiest place for shipping lines to do business, whether you're a global operator or a niche home-flagged carrier. As reported by Thierry Ogier for JoC Online and in this issue of JoC Week, the dockworkers' union at the Port of Santos suspended operations last Monday in protest of a ruling that gave private terminal operators control over the use of casual dockworkers.But things are improving. 'Brazilian shipping is looking up, but not all the problems will go away overnight,' said David Lorimer, president of Datamar, a Brazilian shipping trade consulting firm. 'Shipping rates are a lot better, and the trade is more balanced this year. About 700f the lines have fixed-day sailings and immediate berthing, so congestion is not a problem.'

Lorimer points to improvements in all modes of Brazilian transportation that have opened the door for expanded international trade. Railroad privatization has been under way for only four years, 'and it is an even newer concept for the port terminal operators,' he said. 'A little more than 600f Brazil's terminals are privately owned, but they already handle 850f the international container volume.' Lorimer cautions that high costs are a continuing concern for terminals, as they paid dearly for the original concessions and -- as witnessed in Santos -- they still have labor problems. But he said, 'On the whole, privatization has been a success. The industry's next challenge is to complete the landside intermodal chain.'

Brazil is still a predominantly port-to-port trade, due to steep transfer taxes imposed on any international bill of lading that includes the inland rail or truck movement. Shipping between Brazilian states can add to the tax bite. Tax reform is in the works and Datamar expects the ocean lines to jump at the opportunity to offer a single through bill of lading. 'The bargaining weight of the big carriers like Maersk or Hamburg-Sud will begin to show,' Lorimer suggested. 'Like America, you will see stacktrains affecting the routing of ships to better serve inland Brazil. This will also be new to the railroads, which have naturally concentrated on their own domestic cargoes up until now.'

Alianca is open to a stronger partnership with the railroads but has also taken its own steps to improve cargo flows in Brazil. 'I would say that the country has not grasped the broader concept of logistics yet,' Jose Salgado explained. Eighteen months ago, after port privatization reduced costs, Alianca launched a coastal liner service to leverage its international operation with more port connections. Two 1,200-TEU vessels call six ports northbound or southbound every other week. 'Technically, we still offer a port-to-port bill of lading, but we really provide a through service to the customer's final destination,' Salgado said. 'The coastal service allows us to reach more distribution channels.'

Forecasters expect Brazil's economic recovery to stick around for a few years. Port privatization is catching on, and it appears that the government is willing to open the intermodal channels to become competitive. Alianca is in the right place at the right time. To Salgado and those at Alianca, congratulations on your 50th anniversary, and best wishes for many more.

Bill Ralph is president and publisher of The Journal of Commerce Group. He may be reached at bralph

oc.com.