Evaluation of logistic performance indexes of Brazil in the international trade

Abstract

The importance of efficient logistics for trade growth is widely acknowledged. Literature has shown that better logistics performance is strongly associated with trade expansion, export diversification, ability to attract foreign direct investments, and economic growth. On the other hand, international trade represents a challenge to logistic operations in transporting and storing products. High logistic costs and low quality of services may be considered obstacles to international trade. This research aims to assess Brazil's Logistics Performance Index (LPI) in relation to its major competitors in international trade. The international trade data was collected from SECEX and COMTRADE, while the LPI was provided by the World Bank. Statistical techniques such as cluster analysis and multiple comparison tests of means have been applied to analyze the data. After using LPI index for the 39 competitors, it has been observed that Brazil occupies the 26th position in the rank of performers, behind South Africa, Kuwait and Saudi Arabia. The top performers are in general the leading exporters and importers worldwide (Germany, U.S.A., Japan and the Netherlands). Furthermore, they are the strongest competitors of Brazil in international trade. Thus, the competitiveness of Brazilian domestic firms depends crucially on a dynamic and competitive internal logistic environment in order to stand up to these countries. The results also indicate the bureaucracy as a major obstacle to the logistic performance of the country. The dimension Timeliness of Brazil is very close to the High Logistics Performance Group (HLPG) while Customs is very close to the Low Logistics Performance Group (LLPG). Although Brazil has failed in its customs operations, there seems to be more credibility in Brazilian dealings. The main contribution of this paper is to reveal logistical aspects in which Brazil has shown large inefficiencies. The difference among the logistic performance indexs also appears to be relevant to governments to address their new public policies and also to highlight the logistic obstacles of the Brazilian international trade.