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Brazil Betting Good Money on Air Cargo

Viracopos Airport in Campinas, São Paulo,  BrazilThe great business for airports is no longer passenger transport, but cargo logistics. Despite the greater cost when compared to other systems, air product transport has speed as its main advantage.

It is on this differential that Brazilian airports, such as Viracopos, in Campinas, in the southeastern state of São Paulo, are betting more and more.


According to figures supplied by the Brazilian Airport Infrastructure Company (Infraero), in 2003 Brazil transported 1.2 million tons of air cargo. Of this total, 557 million tons were import and export products, stored in the company terminals.


Nowadays business in the air logistics area is responsible for 26% of all Infraero revenues.


“This is the most profitable and promising sector within the services supplied by the company. In 2003, it generated revenues of US$ 127.3 million and should grow in years to come,” stated Gustavo Schild, national cargo logistics superintendent at Infraero.


The company has been investing in its 32 cargo terminals throughout Brazil. With modern infrastructure and latest generation equipment, the terminals are prepared to receive the most diverse products.


“There are cold storage facilities, special areas for radioactive material and chemical products, and installations for live and restricted cargo,” explained Schild.


The largest terminal in terms of cargo volume in Brazil is in Viracopos International Airport. With an area of 77,000 square meters turned uniquely to cargo storage, the airport should become one of the main distribution centers in the world due to the investment being made by Infraero.


The terminal at Rio de Janeiro International Airport is considered one of the best in Latin America. It has the largest and best equipped storage area for live cargo in Brazil, with bays for eight horses, a 220 square meter paddock to exercise these animals, and a laboratory used by the Agriculture Ministry.


Revenue Service Partnership


One of the most important Infraero operations was the establishment of a partnership with the Revenue Service so as to simplify procedures for cargo customs clearance, reducing import tariffs at Viracopos and Guarulhos (both international airports in São Paulo) and at Galeão (in Rio de Janeiro).


The last two alone are responsible for 60% of air transport from Brazil to the international market. The projects have received the names of Linha Rápida (Fast Line) and Linha Azul (Blue Line).


The first brings together not only the Revenue Service and Infraero, but also importers, freight forwarders, and air and highway transporters.


The objective of this partnership is to reduce the time spent for clearance of the product imported at the airport, thus reducing company stocks and real estate cost.


Including other gains, Fast Line eliminates the 48 hour period for Agriculture or Health Ministry inspection of cargo that needs inspection, and permits preparation of the product for “door to door” delivery.


Success of this the system is guaranteed by information about the cargo that the agent supplied previously and by the forwarder having filled out the Import Declaration. With this, cargos that used to take days for clearance are now cleared in approximately four hours.


Blue Line does not lose in terms of agility. The program was so successful in Campinas, where it was born, that it was implemented throughout the country, transporting over seven tons of cargo in 2003. This process guarantees cargo clearance in up to six working hours after the aircraft’s arrival, thus reducing storage cost.


Viracopos airport also offers another advantage to users, Programmed Cargo Delivery, a system that has been reducing the number of trucks stopped at the terminal docks at peak times since 1999.


The solution was simple: orders booked by the importer at the Cargo Removal Center up to 05:30pm have guaranteed clearance that day. In Viracopos, over 6,000 customers have already used the system – 1,800 regularly, of which 100 are large companies answering to around 50% of total cargo movement.


The company that administers the Brazilian airport system also created the Exportação Expressa (Express Export) system, for Brazilian exporters to be able to do organize their own shipping, increasing control of the “door to door” process.


“Businessmen see this airport logistics advance as very positive. As the import of components used in products for export becomes cheaper and more agile, there will be advantages for foreign trade and for the Brazilian economy,” stated José Cândido Senna, coordinator of the Committee of Port and Airport Users in the State of São Paulo (Comus).


Investment


According to Schild, Infraero has a development plan for cargo logistics terminals forecasting the construction of new warehouses and the modernization of the current terminals.


This action forecasts the construction of new terminals, air expansion, improvement of installations, purchase of equipment such as the trans-elevator, a piece of equipment that guarantees vertical storage and computer identification. This makes more rational use of the space possible and simplifies product location.


Mercosur Hub


Viracopos is becoming the cargo distribution center in Brazil and in the Mercosur common market. A large part of the import volume that arrives there is components used in products assembled in the country and destined to the foreign market. Of the US$ 850 million received in import in Viracopos, 20% is sent to other airports.


This does not happen by chance. For some years, Infraero has been preparing the airport to be the South American hub. Two export cargo warehouses, one with an area of 10,000 square meters, and another with 36,000 square meters, a patio for freighter aircraft for up to 11 Boeing 747’s, and a live cargo terminal have been built.


The next steps are to concentrate on the area around Viracopos, on foreign trade service providers, and on transformation of the Campinas terminal into an Airport-Industry.


This means that companies will be able to assemble their products at the airport, using imported components, without the need for tax payment for entry of components, exporting from there.


The Airport industry project is one of the 11 initiatives for export incentive adopted by the Development, Industry, and Foreign Trade Ministry. The first airports to receive this structure will be São José dos Campos (also in São Paulo state), Tancredo Neves (in Confins, in the southeastern state of Minas Gerais), Antônio Carlos Jobim (Galeão – in Rio de Janeiro), and Petrolina (in the northeastern state of Pernambuco).


Strategic location


In Campinas region, located between greater São Paulo and the Paraí­ba valley, there are 430 companies, of which 50 are subsidiaries of some of the largest companies in the world, mainly in telecommunications, including Motorola, Compaq, IBM, and Lucent.


Campinas also has subsidiaries of the largest express cargo companies in the world – UPS, DHL, and FedEx. UPS, whose investment in Viracopos corresponds to 70% of the total investment in Brazil, has an aircraft exclusively for that terminal, with six flights a week.


The Brazilian Association of International Express Services (Abraec) is elaborating a project, together with the Infraero and the Revenue Service, for construction of a unified cargo terminal at Viracopos Airport.


Organization president Cássio Lopes stated that the objective of the project is to “put everyone under the same roof. The companies, the Revenue Service, the Agriculture and Health Ministries, and Infraero,” he explained.


According to him, the project is in the phase of approval, therefore the investment has not yet been defined. “Works should be finished by the end of 2005,” he stated.


Online cargo


The Infraero cargo terminals are available on the Internet. On the Infraero site, at the Tecanet page, the client can monitor the route taken by the item shipped from the shipping terminal to the moment it is collected at the airport of destination.


Thus, importers or exporters will have in their hands an important mechanism for business control, which may be used from home or from the office. If the client is registered, it will even be possible to print a bill for bank payment, speeding up product clearance and avoiding lines.


www.infraero.gov.br


This report is part of a series of articles on transport in Brazil prepared by ANBA ”“ Brazil-Arab News Agency – www.anba.com.br.

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