The main Logistics executives gathered at the opening of the XX International Supply Chain Forum, in Rio de Janeiro, to discuss the challenges and opportunities of the logistics infrastructure in Brazil, subject of the thematic track of the first day of the event.
The opening mega-session, “Current Overview of Logistics Infrastructure in Brazil”, was attended by Dalmo Marchetti, Engineer at the Department of Transport and Logistics at BNDES, Carlos Geraldo Langoni, Director of the World Economy Center at FGV, Mauro Viegas Filho, Chairman of the Business Council for Infrastructure at Firjan, Remco Overwater, Director General at Dinalog and Mona Haddad, Manager of Business Practices and Global Competitiveness at the World Bank, moderated by André Zajdenweber, Executive Partner – Infrastructure at ILOS.
Infrastructure and Competitiveness
The problems of the Brazilian logistics infrastructure, which directly affect the country's competitiveness in the global and local market, were present in the speech of all the panelists, who also suggested viable alternatives for the scenario that is designed for the coming years.
For André Zajdenweber, from ILOS, the solution for the logistics infrastructure node in Brazil does not involve building new infrastructure assets. “We need to have long-term planning, supported by quality projects that integrate modes in a complementary way. This must be a State policy, not a Government or a party”. He pointed out cabotage as a much more efficient modal than road, which is subsidized by the government.
Brazil has lagged behind in infrastructure and logistics compared to other countries, said Mona Haddad of the World Bank. In addition, the country has been characterized by low investments in this regard. “If we look at different indicators, you see that Brazil's cost is much higher than China and Malaysia,” she said. The specialist criticized the fact that the country, despite the growth of the last decade, has remained relatively closed to international trade. “Brazil remains not very connected to other countries. And we know that trade is an engine of growth.”
According to Mona, the high cost of transport, mainly by road, the long delivery time, the bureaucracy in releasing the goods, the congestion of ports and highways, the low investment in infrastructure and a weak intermodal connection for logistics are obstacles to the development of the sector. in Brazil. “Some solutions involve improving cabotage for domestic trade, investment in new highways and greater use of waterways,” listed Mona. “We know that there is a deficit in investments in transport. Investments in infrastructure have not kept pace with growth. They are very low, lower than in countries that are growing fast.”
The World Bank executive also warned of the need for a more decentralized policy for the logistics sector, involving several regulatory agencies. “There is a need to combine infrastructure with operational improvements looking at the entire supply chain,” she concluded.
Integration, modernization and challenges
Dalmo Marchetti, from BNDES, highlighted that our number one challenge is to change the modal matrix, which needs to be integrated to reduce our number two challenge: the logistical cost. “We have to think about the long term. We cannot make four-year plans. We do need to expand assets, but also the productivity and management of the assets we already have”. Marchetti signaled the need for new actors to enter to expand competition in Brazil, and also to attract foreign private capital in infrastructure: “we need to move twice as fast in investments and, for that, have an internal and external legal framework that supports ”. For the future scenario, Marchetti pointed out that the Planning and Logistics Company (EPL) as an organizing element of Brazilian logistics can be an attraction for long-term investments”.
Investing in infrastructure can be a shortcut to recovering growth at a stronger pace. This is what Carlos Langoni, from FGV, said, explaining that there is a very clear relationship between competitiveness and investment in logistics infrastructure. “The complexity of the Brazilian State, obsolescence and high bureaucracy are the factors that most immobilize private investment in infrastructure. Without modernization, we will always be outdated”. However, for him, the delay in infrastructure represents an opportunity for foreign companies, however, only a residual part of the investment is being channeled towards modernization, which could reduce the incessant dependence on BNDES resources.
Langoni explained that the modernization of infrastructure depends on the combination of an endogenous shock, which undergoes a profound review of the role of the State in the Brazilian economy, since, according to him, the government does not have the managerial capacity to lead the management, and therefore must act as a regulator. And also an exogenous shock, which would be a new cycle of negotiated opening of the Brazilian economy, to attract technology and innovation and stimulate progress in efficiency and productivity.
“For a global world, we need global practices. Brazil's low competitiveness is all based on the low efficiency of the public sector. The challenges are immense and infrastructure modernization is an absolute priority. The choice of this strategy is not an ideological, state or political party issue. The modernization of the infrastructure is an absolute necessity”, concludes Langoni.
