Ministry of Logistics?

IMPORTERS, EXPORTERS AND SHIPPERS THROUGHOUT THE REGION HAVE been learning just how much money they can save with the right kind of intermodal and logistic networks in place. Now, governments are starting to learn the same lesson.

Brazil's gross domestic product could grow 0.5% to 1% yearly after a multimodal transport system to move freight is operating, the Brazilian government says.

For countries in South America, growth like this means US$11 billion every 12 months in cost savings, according to Paulo Vivacqua, president of the Mercosur Atlantic Corridor, one of the companies that is planning to develop a regional intermodal logistics system. The company has signed a letter of intent with the Brazilian government to help develop a new logistics system or improve the existing network over the next couple of years.

The company figures such a system can cut shippers' costs to deliver products in Brazil and South America by 50%.

But the region notoriously lacks decent roads, ports and other logistic infrastructure. The necessary investments won't come cheap--the estimate to improve navigation, ports, roads and railways runs between $2 billion and $3 billion a year.