When reading an article published yesterday by Estadão, commenting on the failure of the logistical infrastructure concession auctions in 2015, I couldn't help but be reminded of the comment made by Professor John C. Taylor of Wayne State University during his talk at the International Supply Chain Forum last year. He is also the son of Professor John Taylor from Michigan State University, who helped found the FGV business school (FGV-EAESP), and for this reason he lived in Brazil for a few years in the 50s. lack of infrastructure and the need for investments in the country are the same as six decades ago.
In general terms, the text of the report says that, of all the auctions for highways, ports and airports scheduled for this year, only 3 terminals at the Port of Santos were sold. All other auctions were “pushed” to 2016. Add to this the paralysis of several works due to lack of resources, due to the drop in revenue, we have a catastrophic scenario for the country's competitiveness in the long term. In the short term, infrastructure is no longer overloaded just because of the political-economic crisis, which has significantly reduced domestic demand.
O National Logistics and Transport Plan (PNLT), launched by the federal government in April 2007 and which subsidized the Growth Acceleration Program (PAC and PAC 2), it seems that it will not materialize. This plan designed a new transport matrix for the year 2025, as shown in Figure 1, with the aim of increasing efficiency, eliminating bottlenecks and reducing costs.
Figure 1 – Brazilian transport matrix proposed by the PNLT for 2025
Source: PNLT
Despite the fact that we have observed a significant growth in investments in transport infrastructure in recent years, from 0,2% of GDP in the early 2000s to something close to 1% of GDP in recent years, this is still not very significant in view of the challenges Brazilians. To give you an idea, this magnitude of investment would not allow us to build the 2 kilometers of railways per year that we would need to reach, in 2050, the same railway density that China has today (just to avoid an embarrassing comparison with the USA and Europe).
The result of this failure can be found in the 4th edition of Connecting to Compete: Trade Logistics in the Global Economy, a report prepared by the World Bank that evaluates the logistics of 160 countries and takes into account the perception of more than 1.000 businessmen from all over the world in relation to the efficiency of the transport infrastructure of the nations. Compared to the previous ranking, released in 2012, Brazil dropped 20 positions, now occupying 65th place, behind other Latin American countries, such as Chile, Mexico and Argentina. This is the worst ranking in the country since the ranking was launched in 2007, as can be seen in Figure 2.
Figure 2 – Evolution of Brazil in the world ranking of logistics
Source: Connecting to Compete: Trade Logistics in the Global Economy
O most recent Global Competitiveness Report – 2015/2016 – from the World Economic Forum corroborates these results and presents an even more dramatic situation, placing the Brazilian transport infrastructure in the 77th position among the 140 nations evaluated. With such a clear diagnosis, how is it possible not to evolve in the subject and make the necessary investments feasible? Let's hope 2016 is a “less worse” year!
References
<http://www2.transportes.gov.br/bit/01-inicial/pnlt.html>
<http://www.worldbank.org/content/dam/Worldbank/document/Trade/LPI2014.pdf>
<http://reports.weforum.org/global-competitiveness-report-2015-2016/>
Leonardo Julianelli
https://ilos.com.brExecutive Partner of ILOS. Graduated in Production Engineering from EE/UFRJ, Master in Business Administration from COPPEAD/UFRJ with extension at EM Lyon, France, and PhD in Production Engineering from COPPE/UFRJ. He has several articles published in periodicals and specialized magazines, being one of the authors of the book: “Sales Forecast: Organizational Processes & Qualitative and Quantitative Methods”. His research areas are: Demand Planning, Customer Service in the Logistics Process and Operations Planning. He worked for 8 years at CEL-COPPEAD / UFRJ, helping to organize the Logistics Teaching area. In consultancy, he carried out several projects in the logistics area, such as Diagnosis and Master Plan, Sales Forecast, Inventory Management, Demand Planning and Training Plan in companies such as Abbott, Braskem, Nitriflex, Petrobras, Promon IP, Vale, Natura, Jequití, among others. As a professor, he taught classes at companies such as Coca-Cola, Souza Cruz, ThyssenKrupp, Votorantim, Carrefour, Petrobras, Vale, Via Varejo, Furukawa, Monsanto, Natura, Ambev, BR Distribuidora, ABM, International Paper, Pepsico, Boehringer, Metrô Rio , Novelis, Sony, GVT, SBF, Silimed, Bettanin, Caramuru, CSN, Libra, Schlumberger, Schneider, FCA, Boticário, Usiminas, Bayer, ESG, Kimberly Clark and Transpetro, among others.
