The Brazilian customs strikes, caused by a dispute over wages, are continuing to cause significant disruption in the region. After two days of heightened industrial action that effectively closed customs on 12 and 13 July, officials have returned to running a severely limited service. Our local specialists are reporting that the current delay for cargo is approximately one week, but this is set to increase as more cargo is sent to the already oversubscribed ports. Green channel* goods are able to move through customs unhindered, but red, yellow, orange and grey channels are experiencing serious delays.
It is impossible for a logistics manager to sit in Germany, China or the UK and fully grasp the changing problems and opportunities available in Brazil and even more difficult to implement a solution with a high level of confidence
The strikes are affecting the whole of Brazil, and highlight the importance of OEMs and Tier Ones doing their homework before a difficult situation arises. A detailed understanding of the area and the local business culture and customs processes will highlight the opportunities available and the risks. It will also provide advance information to help mitigate the difficulties and to provide knowledge of how the trouble spots can be bypassed.
It is impossible for a logistics manager to sit in Germany, China (which accounts for 31% of Brazil’s export) or the UK and fully grasp the changing problems and opportunities available in Brazil and even more difficult to implement a solution with a high level of confidence. Our local knowledge and expertise allows us to develop creative solutions which can often make the difference between a busy production line and an idle one.
One major OEM has already commissioned Evolution Time Critical to move a large number of engine blocks, previously scheduled to travel as ocean freight, by airfreight to Europe. Local knowledge from our team of specialists on the ground resulted in the OEM following our advice to send the shipment as smaller multiple consignments, increasing the chances of material being routed through the green channel, thus enabling the successful flow of product in time for the planned production schedule.
A detailed understanding of the area and the local business culture and customs processes will highlight the opportunities available and the risks.
While no-one in our industry can prevent these strikes, we can prepare for them on both a macro and a micro level. We must ensure that our supply chain analysis is thorough and that each new venture is entered into with eyes open and a safety net of local-level knowledge to help prevent a drama turning into a crisis. Critical logistics planning should be part of all footprint analysis and regularly updated.
*The colour coding represents the different customs inspection channels for imports
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Brad Brennan is Managing Director of Evolution Time Critical. For more information, visit www.evolution-timecritical.com.
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