Commentary

Delivering Rio 2016: a hurdle too far? 

As Brazil’s infrastructure strains to breaking point, the Road to Rio could be a rocky one, warnsDavid Jinks MILT of Fastlane International.

As the world heads to Rio, Brazil’s overstretched logistics network may be unable to cope with the increased demand. And, despite the introduction of a special ‘Olympics law’ which fast-tracks official team equipment into Brazil, striking customs officials can intervene to check any athlete’s kit. This could potentially delay Olympic Events, while bringing the world’s attention to the strikers’ grievances.

Strictly speaking, Olympic team equipment shipped by courier should bypass Brazil’s usual customs checks and creaking delivery infrastructure, under a special law that waives the usual checks and hefty import taxes. But customs officials still have the right to intervene and examine any shipments if they wish to; and the tax officials’ union boss, Claudio Damasceno, has vowed: “If the strike continues it will certainly disrupt the Olympics.”

And this isn’t the only threat for anyone trying to ship to Brazil during the Games. Our new industry report – Delivering Rio 2016: A Hurdle Too Far? – reveals the strike and the heightened security measures surrounding the Games, mean Brazil’s struggling logistics network could buckle under the pressure.’

Britain’s SME exporters planning to ship to Brazil are also facing some Olympic size hurdles. Over the last four years, UK exports to Brazil have grown by 20%, reaching £2.5 billion. That makes it a market no self-respecting British exporter can ignore – especially post-Brexit. However, businesses shipping to Brazil not only face glacial delays; warns the report, but too many shipments are simply ‘disappearing’.

In addition to which, Brazil is still a significantly protectionist economy that favours its own businesses over overseas companies.

Even the UK Government’s Trade and Industry team warn Brazil is ranked 72 in the Transparency International corruption perception index (CPI) and that organised crime is a significant problem in some parts of the country. That can make doing business there difficult, to say the least.

Add to this the fact British parcels to Brazil face a whopping 60% flat tax, plus 18% VAT; and UK-made goods face six different and hefty taxes, and Brazil becomes a significantly less attractive place to trade. In fact, Brazil has one of the highest number of new potentially trade-restrictive measures.

The potential for delays to the delivery of vital Olympic equipment during the Customs strike is there. It is to be hoped that Brazil’s Government will be able to intervene to stop any such actions, with the entire eyes of the world on the smooth running of the Games.

And as for the continuing delays facing non-official Olympic shipments to Brazil, our report reveals eBay users are reporting deliveries through the Correios network have been taking two or three months on average. Fastlane’s advice is that ‘disappearing’ shipments, increased security and extra Olympic traffic, mean anyone shipping items to Brazil should bypass Brazil’s post network and ship directly using tracked international courier services such as UPS, TNT and DHL. It’s the easiest way to turn what could be a marathon delivery into a sprint!

Image credits:

  • Christ on Corcovado Mountain - Copyright Artyominc, Creative Commons, link