The challenges of logistics

“Without a doubt, the biggest challenge of all when it comes to logistics in Brazil is infrastructure. We still have a long way to go to ensure greater availability and efficiency in the transport of goods by road, railway, pipeline and waterway”

A product’s quality and cost are decisive factors in any client’s purchasing choices. But the equation does not stop there: innovation, sustainability, partnership and relationships, and, of course, logistics, are all factors with increasing weight in trade relations.

Without the right logistics, there is no guarantee that products will reach clients on time, with the requisite quality. At Braskem, we are always seeking opportunities to add value to our clients through the optimization of logistics processes, with various initiatives such as reverse logistics and the constant revision of our logistics network. But the challenges are just as big as the opportunities in this segment, because in our day-to-day operations we need to ensure the delivery of 5 million metric tons/year of dry cargo (plastic resins) to some 1,600 clients in Brazil and about 250 abroad, in 60 different countries, and 9 million metric tons/year of gas and liquid cargo (basic petrochemicals) to clients in Brazil and other countries on five continents.

To continue fulfilling our mission of providing ever better service to our clients, we must overcome challenges on a daily basis. Without a doubt, the biggest challenge of all when it comes to logistics in Brazil is infrastructure. We still have a long way to go to ensure greater availability and efficiency in the shipment of goods by road, railway, pipeline and waterway.

The railways, coastal shipping and inland waterways are important parts of the logistics system in a country of continental proportions like Brazil, and therefore these modes need to be rapidly developed through the expansion and improvement of express routes and channels. Our rail network, for example, now covers just 30,000 km and is concentrated in a few states (São Paulo, Minas Gerais, Rio de Janeiro and Rio Grande do Sul). In the USA, for comparison’s sake, the railway network exceeds 200,000 km, and rail freight is one of the most commonly utilized modes of transport.

Due to the limitations of infrastructure in Brazil, we still depend heavily on road transportation, which represents more than half (65%) of logistics operations, while in the United States, for example, this mode represents only 25% of operations.

As for waterways, the situation there is also complex. The main bottleneck is the lack of investment in port infrastructure facilities on rivers, such as the Manaus Free Trade Zone hub. The limitations in sea ports for export and coastal shipping such as Santos (São Paulo), Rio de Janeiro, Rio Grande (Rio Grande do Sul) and Aratu (Bahia), include access infrastructure, back-port areas and the capacity of port terminals.

In light of this situation, several measures are required to strengthen the supply chain as a whole. We have to take a proactive stance. Brazil needs to invest in infrastructure in all modes of transport. Streamlined ports, intermodal accessibility (products reaching ports by road and/or railroad), the expansion and modernization of railways, and road quality and conditions are essential factors.

The medium and long-term outlook for the Brazilian logistics scenario is positive, but the attitude of the business sector should be primarily proactive, and (why not?) creative. We must take part in the debate, influence the sector in the right direction and help open up more and more paths of development.