Logistics performance: Brazil suffers from a lack of infrastructure

Recently, another edition of the Logistics Performance Index (LPI), ranking developed by World Bank and which will be presented in XXIV International Supply Chain Forum, which will take place from September 18th to 20th, in São Paulo. In the general ranking of 2018, the situation of Brazil was not very different from that of 2016 (55th), with the country occupying the 56th position in the general ranking that brings together 160 countries.

That is, in two years, we walked sideways in terms of logistical performance, right? Wrong. Those two years were of intense crisis in the country, with a strong retraction of the industry, which brought relief to the weakened and bottlenecked infrastructure of Brazilian transport. Less cargo overloads the infrastructure less, bringing a false sense of improvement for logistics operators, freight forwarders and the like, as happened from 2014 (65th) to 2016 (55th). In 2018, not even that happened, which shows that the infrastructure is bad even for a stagnant economy.

One of the items that make up the LPI is precisely the quality of the countries' infrastructure. In the case of Brazil, we dropped from the 47th position in the infrastructure ranking to the 50th, with more than half of the interviewees complaining about the tariffs practiced in all modes. It is important to emphasize that the interviews were carried out between September 2017 and February 2018, that is, long before the much criticized road freight table launched by the Brazilian government at the end of May and which brought an increase in transport costs for most national companies.

The fact is that Brazilian companies have no choice. Problems such as lack of infrastructure, poor quality of existing infrastructure and bureaucracy end up leading more than 60% of companies to choose road transport, facing poor quality roads. In addition, the national road network is far below the needs of a country with continental dimensions like Brazil, with a density of only 0,025 km/km2 of national area, about 20 times smaller than China and the United States.

Much more than investing in other modes of transport, Brazil really needs to invest in transport, that is, build more highways, more railroads, make its waterways viable and integrate these modes to its ports and airports, to ensure efficient logistics. Furthermore, with a coastline as extensive as ours, it is important to ensure the competitiveness of cabotage, which allows for lower costs, environmentally cleaner and safer transport, but which ends up hampered by bureaucracy and national politics.

References:

Connecting to Compete – Trade Logistics in the Global Economy – 2018