Modal Synchronization is the Future

In Rotterdam (Netherlands) and Antwerp (Belgium), the largest ports in Europe, modal synchronization is taken to extreme levels today. For instance, a commodity, whether it comes by truck, train, or ship, can only arrive at the terminal seven days before the scheduled date for the ship’s entry that will transport it to another port. If the shipper does it before this deadline, costs skyrocket because, after all, space is vital and must be extremely well managed to ensure that the cargo does not stay in the port any longer than necessary.

This is because transportation costs weigh heavily on the final price of a product, as the owner of the goods must pay not only the expenses incurred by moving between two points but also the expenses related to maintaining inventory in transit. Therefore, logistics seeks to select transportation with lower costs that meet consumer needs.

Furthermore, it is also necessary to minimize the time required for product movement as much as possible because, after all, the faster the transportation, the less time the warehouse space will be unavailable for other cargo. Therefore, the carrier that can meet the scheduled deadlines for product movement with the lowest possible costs comes out ahead. These costs, especially in road transportation, which handles 61% of the country’s cargo, are mainly divided between terminal and transit expenses. Terminal expenses, including collection, delivery, platform maintenance, billing, and invoicing, represent 15 to 25% of the total costs.

This can be explained by the fact that today, the purchase or sale of a product is subject to a set of needs that only take into account price, quality, delivery agility, and, above all, reliability. Faced with strong competition and constant changes in consumer behavior, companies seek practices that offer advantages over competitors because that’s the only way to retain and acquire new customers.

In other words, the much-vaunted productivity is only possible through cost reduction and perfect customer service, which is only proven if the customer has the purchased product in the conditions, quantities, time, and place defined at the time of purchase. If any of these items does not work satisfactorily, it is clear that the customer will not only complain but also often communicate their disappointment to other partners. And this complaint is now transmitted not only by word of mouth but also through digital media at incalculable speeds.

To achieve this goal, many companies that had their own fleet decided to partially or fully outsource transportation since maintaining a fleet of trucks and trailers requires a complex administrative structure with drivers, assistants, mechanics, supervisors, and assistants to keep the vehicles up to date. However, the excellence of services still tends to escape the control of companies because there are often errors or delays caused by third parties and, especially, by the deficient infrastructure of the country.

Therefore, it is essential for there to be increasing synchronization between the modes of transportation, which depends largely on public investments in highways, railways, waterways, ports, and airports. Thus, the restoration and completion of road and railway networks and the construction of port facilities, as well as improvements in the airport sector, are becoming increasingly urgent. At the same time, it is necessary to increase the number of concessions for port terminals to the private sector, including foreign capital.

The hope is that, by offering concessions in which companies pay the government a fee to operate the facilities and commit to making significant investments, Brazil will stimulate its economy and resume growth. Along this path, perhaps one day, the main Brazilian ports will reach the standard exhibited by Rotterdam and Antwerp.

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Liana Lourenço Martinelli, lawyer, postgraduate in Business Management and International Trade, is the Manager of Institutional Relations at Fiorde Group, comprised of the companies Fiorde Logística Internacional, FTA Transportes e Armazéns Gerais, and Barter Comércio Internacional. Email: fiorde@fiorde.com.br. Website: www.fiorde.com.br.

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