Infrastructure logistics strangles national it distribution

Among the many hurdles that the technology distribution sector faces daily in Brazil, perhaps one of the worst is transportation. Dependent almost entirely on road transport, it operates through a clogged funnel – a precarious system, with few and poorly maintained highways. Expensive and inefficient.

A company’s reputation for its consumers is also tied to the quality of deliveries, and unpredictable logistics impact business. Good transportation solutions make all the difference to the distribution business, but bad roads, falling bridges, and truckers caught in traffic prevent carriers from delivering with quality.

Obviously, for a technology distributor to have a high standard of service, it also depends on the carriers, that, in turn, face an adverse scenario and have difficulties in securing deadlines.

Such is the connection between the quality of transport services provided and the infrastructure offered, which in the United States, for example, as in other developed countries, there are excellent, well-maintained roads served with stopping areas every 5 km or 10 km. In short, elements that allow a transport of the highest standard, with a predictable delivery time.

The Brazilian public power would be responsible for ensuring good roads and bridges, safety and lighting on the highways, with a good supply of support services, etc. Some states, such as São Paulo, Rio de Janeiro and Paraná, among others, are able to offer a certain standard of quality, but the same cannot be said in many other regions of the country. There is so much to improve.

Industry Data

The technology distribution sector in Brazil usually operates with low margins. Despite the high volume of invoicing, the costs of the production chain and the costs are numerous, which tightens the results. As a rule, profit is between 1% and 3% in the industry.

For this reason, shipping, which costs on average 1% of company revenues, is so important. With the IT distribution sector earning approximately BRL 12 billion in 2018, according to a survey published by Abradisti, transportation spending was around BRL 120 million.

Given this scenario, the Association is moving to create, this year, a specific working group to discuss transport and logistics. The objective is to understand the demands of the industry and how the main routes, the quality indexes and, above all, the price logic are met, as they are distributed in the chain. It is necessary to pave the way for quality and reduce costs through collective organization and structured knowledge.

The initiative should facilitate the work of the associates in the country in the face of very low predictability caused by incidents such as the truckers’ strike, which stopped Brazil for 11 days in May 2018. For the IT distribution sector, the estimated losses exceeded BRL 100 million.

We cannot forget that the drivers stopped the country, which can happen again. Being prepared for this type of crisis is fundamental for both the industry and the country’s future.

Highlight

A company’s reputation for its consumers is also tied to the quality of deliveries, and unpredictable logistics impact business.