After 3 years of increasing the Brazilian basic interest rate, the SELIC rate, on 02/08/2023 the Copom made the decision to reduce it by 0,5 pp, opening the door to the possible, and so eagerly anticipated, cycle interest rate reduction. The latest projections from the Focus bulletin indicate an estimate of SELIC at 11,75% pa at the end of 2023 and 9% pa at the end of 2024. However, it may not be so clear to everyone why so much attention is paid to this simple number.
The economy's basic interest rate has a significant impact on logistics companies, being a crucial element that influences their operational and financial activities. When the interest rate is high, the cost of capital increases, making it difficult for logistics companies to access loans and financing for infrastructure investments, fleet expansion and technology modernization. This scenario can compromise the efficiency of logistical operations and even prevent the development of new projects.
A clear example of this influence can be seen in road freight transport companies. With high interest rates, the acquisition of new trucks or fleet renewal becomes more costly, which postpones the investment decision and results in older vehicles circulating in the market. These vehicles, in turn, have a higher maintenance cost and lower energy efficiency, which may affect delivery times and freight costs, negatively impacting customer satisfaction.
On the other hand, if the interest rate is reduced, logistics companies have greater access to credit and, consequently, more resources available to invest in innovation and expansion. Logistics operators working with storage and distribution also benefit from lower interest rates, as they can invest in automated storage systems, improving inventory management and reducing operating costs.
A real example of this was seen in 2020, when many countries reduced their interest rates to combat the economic effects of the COVID-19 pandemic and companies operating in the e-commerce sector experienced accelerated expansion due to the increase in online purchases, if taking advantage of low interest rates to finance the expansion of its storage capacities and improve its delivery services, meeting growing demand.
Figure 1 – E-commerce growth in relation to the SELIC rate Source: ABComm and Central Bank
Bearing in mind the future perspectives of SELIC reduction, it is possible that we will start to experience in the short and medium term a heating up of the economy and an expansion of investments in logistics. However, it is important to highlight that many other aspects must be taken into account before creating expectations. The analysis of the impact of the basic interest rate on logistics companies must be contextualized with other economic indicators, such as inflation and the exchange rate. In addition, the particularities of each company, its business model and political stability also shape its vulnerability to fluctuations in the SELIC rate.
