Brazilian companies seek to reduce costs of importing, say supply chain execs  

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São Paulo

and Philadelphia, July 20, 2010 –In a recent study of supply chain executives in Brazil, nearly 7 out of 10 respondents cited total landed costs of importing products into the country 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 regional and global supply chains, they increasingly are looking to reduce the landed cost of their imports and speed their delivery to markets here,” explained Roberto Croce, general manager of BDP International in Brazil, a unit of U.S.-based global logistics firm, BDP International, which conducted the study. 

These companies also appear to be placing higher priority on reducing internal overhead as they turn to firms specializing in logistics for better control of inbound shipments and compliance with complex import regulations that can impede cargo clearance and incur highly 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 added.

The survey also found that more than 60% of the respondents are increasingly outsourcing their transportation-related functions, with nearly half reporting greater outsourcing of global logistics and Lead Logistics Provider (LLP) 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,” said BDP’s Croce.

“Outsourcing their logistics-related functions not only helps them reduce internal costs, but also manage their global supply chains better through the expertise of lead logistics providers and value-added services such as supply chain visibility and metrics on the performance of  upstream origin suppliers, carriers, third-party logistics partners and other players in the supply chain, he added.”

Significantly Brazil weathered the global recession considerably better than the U.S. and European economies, due in large measure to vibrant intra-regional trade. While respondents to the survey indicated they import materials from a variety of regions, nearly 70% export primarily to other Latin American Countries.

“Through 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,” noted Croce. “We are moving toward becoming a first-world economy with continued strong growth prospects.”

Among the survey’s other findings were concerns among supply chain professionals over the readiness of Brazil’s infrastructure for the 2014 World Cup and 2016 Summer Olympics, cited by over 90% of the respondents. Many raised doubts that much needed improvements will be completed in time to accommodate the business and consumer demands of national undertakings of this magnitude.

“However it should be noted that our Growth Acceleration Programs, while somewhat behind schedule, are injecting nearly BRL 60 billion (USD 35 billion) into infrastructure upgrades,” said Croce. “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 survey was conducted via an online questionnaire distributed to 350 supply chain professionals, 11% of whom responded. Of those, 41% were in the chemical industry with the balance representing other vertical industry sectors. More than half of the respondents’ companies are based in South America, 26% in North America and 18% in Europe. More than 80% of the companies are engaged in both import and export activities. Nearly 70% use ocean transport most frequently, compared with just 22% that use predominantly air. Over half the respondents worked for companies with annual revenues of more than $500 million.

For further information, contact:

Arnie Bornstein

Executive Director – Marketing & Corporate Communications BDP International, Inc.

510 Walnut Street, Philadelphia, PA 19106

phone: 215-629-8493

e-mail:abornstein@bdpnet.com.

For BDP:

Henry Raab

phone: 610-866-0611

e-mail:

henry.raab@swbrinc.com

For more information in Latin America, contact

Roberto Croce

General Manager

BDP International – Brasil

Rua Geraldo Flausino Gomes, 78 5o andar

São Paulo, SP – Brasil CEP 04575-060

phone: +55 11 5504 3416

e-mail:rcroce@bdp.com.br.

For BDP:

Roberta Provatti

phone: 55 (11) 3061-4074/ (11) 96524661

e-mail:roberta@yellowcomunicaca

o.com.br.

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About BDP
BDP International is one of the leading privately held freight logistics/transportation management firms based in the U.S. It operates freight logistics centers in more than 20 cities throughout North America and a network of subsidiaries, joint ventures and strategic partnerships in 122 countries. The company serves more than 4,000 customers worldwide.  Clients include Bayer, Dow, DuPont, Heineken USA, Honeywell, Johnson & Johnson, Revlon, Trek Bicycle, Wacker, and others. BDP provides a range of services, including ocean, air and ground transportation; lead logistics process analysis, design and management; export freight forwarding; import customs clearance and regulatory compliance; project logistics; warehousing/consolidation/distribution; and web-based shipping transaction/tracking management systems. For more information visit:www.bdpinternational.com

Note: A copy of the complete study is available upon request.

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