Asphyxiating infrastructure in Brazil
To bring a container from China to Santos Port, in Brazil, a 17,000 km-long trip that may last 35 days, a textile company in São Paulo state spends US$1,200 per unit, on average, in sea freight. To send the container from the port of arrival uphill, to São Paulo city, located just 77 km away, the company spends the same on road transportation freight.
Like this, many other companies have been suffering from the same chronic problem - the cost burden by the poor Brazil’s infrastructure, which has been putting a lot of pressure on the cost of logistics of the companies doing business locally, therefore reducing their competitiveness.
According to a recent study carried out by the São Paulo State Industries Federation, FIESP, which surveyed 1,211 companies, doing business in Brazil has an extra cost worth US$10 billion annually thanks to the poor roads services, the governmental bureaucracy, insufficient railroad service and storage costs, which allied to Brazil’s voracious taxation system, produce a least attractive business environment. According to the survey, of the those companies' annual revenue, 0.36 percent (US$3.65 billion) is spent on maintenance of the transportation fleet, 0.6 percent (US$6 billion) on transportation freight and, finally, 0.4 percent (US$400 million) on merchandise storage.