Rise in logistics costs and drop in road transport

As happens periodically, the newspaper Valor Econômico launched this Thursday its already traditional logistic notebook. As in other editions, the publication brings an overview of the sector in Brazil, covering everything from how logistical costs are going to topics that promise to win the daily lives of companies in the coming years, such as the internet of things. Although investments in technology are fundamental for the future of companies, the issue of logistics costs is always highlighted, especially in periods of economic crisis such as the one we are experiencing.

And the news is not good at all. In the study carried out by ILOS itself and published by Valor Econômico, the expenses of companies with logistics in Brazil rose in 2015, representing 11,9% of the country's GDP, against 11,7% in the previous year. Responsible for this increase in national logistics costs was the cost of inventory, which, in 2015, was 3,9% of GDP (against 3,7% in 2014), influenced by the growth in interest rates in the period and by the retraction in consumption.

Although the percentage spent on transport has remained the same between 2014 and 2015 (6,8% of GDP), the activity has also been greatly affected by the crisis. Analyzing diesel consumption and the flow of heavy vehicles on the highways, a sharp drop in demand for road freight transport can be seen, mainly in regions such as the North and Northeast.

In the Valor section itself, our managing partner, Maurício Lima, explains that there is a relationship between GDP and the demand for road transport. When the Brazilian GDP drops, the movement by truck drops in a greater proportion, and when the GDP rises, the movement skyrockets. That is, the road works as a kind of transport buffer in Brazil. Due to the lack of investments in other modes, trucks handle the extra cargo movement when the economy is growing. So, naturally, when the economy contracts, it is road transport that feels the crisis the most.

With a forecast GDP drop of 3,3% in 2016, the scenario for road transporters in Brazil is not the best for the rest of the year. We can only hope that the new air that has been blowing in the Brazilian economy will change this trend. Meanwhile, the moment seems more propitious for companies that are negotiating more affordable freight prices.

Be sure to check out the full article on this link! (restricted to newspaper subscribers)