XXIII ENANGRAD. Gestão de Operações e Logística (GOL) EXPORTATION CHAIN OF TINPLATE: AN ANALYSIS OF LOGISTICS COSTS. Dário Moreira Pinto Junior

Transcription

1 XXIII ENANGRAD Gestão de Operações e Logística (GOL) EXPORTATION CHAIN OF TINPLATE: AN ANALYSIS OF LOGISTICS COSTS Dário Moreira Pinto Junior Antonio Carlos Breves de Souza Eduardo Gomes Meireles André Seixas de Novaes Bento Gonçalves, 2012

2 GESTÃO DE OPERAÇÕES E LOGÍSTICA GOL

3 EXPORTATION CHAIN OF TINPLATE: AN ANALYSIS OF LOGISTICS COSTS ABSTRACT Distribution of products is among the main activities of the companies.the work in question is referring to an analysis of logistical factors relating to export of the tinplate. We carried out a survey, through interviews, web-based, with some trading companies to obtain data of the export market. For the research were sent questionnaires to different tradings installed in different countries negotiating the product sheet metal. Emphasizing that trading companies are commercial exporters that act as intermediaries in representation and marketing of products from Brazil and other countries. These companies provide a great support in the area of foreign trade, both in respect of legal procedures for export, as in market research, economic viability and integration of products of interest for various markets. With the survey results it was possible to analyze logistics costs of the export chain of the product, as well as a market situation today. Key words: logistics costs, tinplate, exportation 1. INTRODUCTION Distribution of products is among the main activities of the companies, as they define their success in serving its clients, ensuring satisfaction and creating conditions for them to achieve the efficiency and service reliability, and represents a significant element of cost reduction, when well planned, all commercial and industrial activity of the organization (Botelho, 2003). The value of logistics in corporate strategy as a result generates a series of questions related to how companies from the same supply chain are organizing to confront new challenges (SILVA, 2000). The logistics in addition to being a contemporary management tool is also an important economic activity. The importance of transport operations it is present in the daily life of all companies that need to move loads, which means that relevance in both the high representation of their costs as the major impact that transport has on the level of customer service. According to the "Panorama Logistics Cost in Brazil" (EIRAS and FIGUEIREDO, 2007). Transport costs represent 7.7% of GDP (Gross Domestic Product) in Brazil compared to 5% in the United States. At the same time, the "share" the costs of transport holding companies in Brazil is 64% of total logistics costs. With respect to the number of ports in Brazil, one can say that they are sufficient, but at certain times of the year occur congestion and queues of modals, especially in land and waterway modals. This is because the set of logistics operations is poorly distributed, due to excessive demands and bureaucracy of government agencies. According Alfredini and Arasaki (2009), our country does not need more ports, but the freedom to face with exports greater productivity in their operations. The Brazilian steel industry is positioned between the most competitive in the world, offering comparative and competitive advantages that allow you to expand on a permanent basis, their participation in the global market. IBS (2011) defends policies that would allow the industry to expand, at competitive prices, its export capacity. The Brazilian steel industry, with exports of around 40% of its production and significant participation in the global market, is among the leading generators of trade balance in the country. New projects in development, many of them focused mainly exports should expand that position (IBS, 2011). The work in question is referring to an analysis of logistical factors relating to export of the tin plate. We carried out a survey, through interviews, web-based, with some trading companies to obtain data of the export market. Noting that trading companies are trading companies that act as intermediaries in representation and marketing of products from Brazil and other countries. These companies provide a great support in the area of foreign trade, both in respect of legal procedures for export, as in market research, economic viability and integration of products of interest for various markets. With the results of the research was to classify values of the costs of export logistics chain of the product, as well as a market situation today.

4 For the research were sent a total of ten (10) questionnaires to different tradings installed in different countries negotiating the product sheet metal. Of the total sent, 07 (seven) responded, of which only 05 (five) had usable responses to our study. 2. OBJECTIVE The work is related to an analysis of tools and logistics costs in the chain of export of the metal foil - also known as tinplate, a product used primarily for packages, especially in the food industry. 3. ABOUT TINPLATE The only producer of tinplate in Brazil is the National Steel Company - CSN. The metal sheets products, in fact, products are coated with tin, on both sides and are used primarily for the manufacture of cans and other containers. The sales of tin mill products totaled more than one million tons in With six electrolytic coating lines, CSN is a the biggest manufacturers of metal sheets in the world and only in Brazil. The CSN has a production capacity of this product around 1.1 million tonnes per year and the historical relationship between domestic and export has been approximately 70% for domestic exports and 30% considering the product in question. The main destination of tinplate foils is the manufacture of packaging, particularly for foodstuffs. They are made of low carbon steel and coated on both sides with a film of tin that is deposited on the surfaces by means of an industrial process known as electroplating, or coating by electrolysis. Comparing the issue of consumer markets sheet metal for the metal packaging, it is important that the market that is most similar that of Brazil is in Europe. The consumer gives more value to a lithograph done well, what a beautiful design. And it features a great impact on consumption in different segments. In Brazil, the consumer tends to reject packages that do not have a lithograph done well, which is not pretty, even if the product is sometimes the same and even lower quality (ABEAÇO, 2011). Figure 1 gives an overview of the distribution of tinplate products for export, since the output of the production company (National Steel Company, CSN), located in the city of Volta Redonda, Rio de Janeiro, to the ports. It can be seen in the figure, the export of the tinplate is made via the following ports: Angra dos Reis - which is distant about 140 km, Sepetiba - which is distant about 109 km and the Port of Rio de Janeiro - which is distant about 120 km from the city of Volta Redonda. Figure 1 - a vision of the product distribution from the exit metal foil of the primary producer to the ports of Angra dos Reis, Rio de Janeiro and Sepetiba. We also focus on the distances

5 4. EXPORTATION LOGISTICS COSTS The transport of products is usually where the biggest expense is concentrated in logistics. Allied to the continuing impact of rising fuel costs, it is considered the biggest expense of logistics, which probably tends to increase (HUTT & SPPEH, 2000). According to Faria and Costa (2007), the total logistics costs can be calculated from the sum of the individual elements of logistics costs: cost of warehousing and material handling, shipping cost, including all modes intermordais or operations, costs of packaging used the logistics system, maintenance costs, inventory costs lots of tax costs, costs of service level and cost of logistics management. Some authors (Bowersox & Closs, 2001) emphasize that the main components of logistics costs are costs of holding inventory and transportation. They represent 80% to 90% of all logistics costs. We can classify basically five transport modals, ie rail, road, waterway, pipeline and the by air. Each modal has its particularity. The train is equipped with high fixed costs in equipment, terminals and railways, and that variable costs are low. In the case of the road, fixed costs are low and the average variable variables (fuel, tires and maintenance). The waterway; medium-high fixed cost (ships and equipment) and low variable costs (ability to carry large amounts). Pipeline, higher fixed costs (rights of access, construction of pipelines) and lower variable cost. Air transportation, high fixed costs (aircraft) and high variable costs (fuel, labor and maintenance). When making comparisons between the transport logistics between Brazil and the USA (IAB, 2011) it is clear that logistics is a big difference in the transport matrix, which shows that the share of road transportation in Brazil is twice that of the United States as shown in Table 1. As the railroads the second most expensive, only losing to the by air, it becomes clear how the lack of infrastructure for the use of other modes in Brazil is a great challenge for Brazilian companies. Table 1 - Matrix of charge transport comparing Brazil with the USA BRAZIL (%) USA (%) Air 0,1 0,4 Pipeline 4,4 19,9 Waterway 13,5 13,9 Road 58,5 29,0 Railroad 23,5 36,8 Source: Institute of Brazil Steel The decision of a user for the transportation of your load depends basically on two factors: the costs and operational characteristics of the transport service. The main objective of transportation is to move goods from one place of origin to a destination while minimizing the financial costs, time and environmental. The costs for damages must also be minimized. At the same time, the drive must meet the expectations of customers regarding the performance of the supply and availability of information on cargo transported (Bowersox & Closs, 2001). In the case of sheet metal, the transport is done via roads and railroads, and, according to data from the Ministry of Transport, in 2001 the railroads were responsible for 60% of cargo handling in Brazil, followed by the railroad, with 21% and water transport with 14%. The sector can be characterized by the predominance of moving products with low added value covering long distances, thus it would be necessary to facilitate logistical arrangements contemplate the waterway and rail transport suitable for this type of profile. However, road transport is predominant (YAMAKAMI and OJIMA, 2003). This

6 predominance of the road can be explained by the difficulties facing other transport categories to answer efficiently to increases in demand in more distant areas of the country, which are not served by rail or waterways. The total cost of transportation can also be increased depending on the cost of inventory in transit. This cost refers to the opportunity cost of capital immobilized in the period in which the goods are in transit, representing what could have been gained by applying the value of the product in any financial transaction during the transport (ANGELO, 2005). This cost can be relevant, for example, when making a comparison between modal the modals to freight rates as lower as waterway and rail, are lower speed and thus immobilize capital for a longer time, which causes a higher cost of stock in transit. Therefore it is interesting to consider some costs: freight (all modals), loss of merchandise (break) and opportunity cost of inventory in transit The intermodal takes place when there is the use of more than one modal transport. That is, the goods are transported from their point of origin to its final destination by different modes. In these operations, terminals play a key role in the economic viability of the alternative. The most worrying is that the terminals are just one of the main barriers to the development of intermodalismo in Brazil. Several studies (ANGELO, 2005) carried out in Brazil show a high level of inefficiency in the operation of transport, especially in the activities of loading and unloading, where waiting times are generally very high in relation to the standards of other countries. This characteristic results in high transfer costs, which in many situations, just invalidating intermodal operation. CSN has 11.9% of the FCA SA (FCA) which has the concession to operate until the year 2026, the assets of the central-eastern rail system. This system covers 7080 kilometers in length within the states of Sergipe, Bahia, Espirito Santo, Minas Gerais, Goiás and Rio de Janeiro and Brasilia. Besides serving other customers, the railroad transports limestone and dolomite mines of CSN in the locality of Arcos in Minas Gerais for the Presidente Vargas Steelworks and carries CSN's exports to the port of Angra dos Reis (SEC, 2011). With regard to Southeastern Railway System, the CSN has 32.2% of MRS Logistica SA (MRS) which has a concession to operate until the year This system, which covers 1674 km in length, serves the industrial triangle Sao Paulo - Rio de Janeiro - Belo Horizonte in southeastern Brazil, and connects the mines of Minas Gerais to the ports of the States of Sao Paulo and Rio de Janeiro and plants CSN, Cosipa and Acominas. In addition to serving other clients the railroad transports iron ore mines in the locality of CSN's Casa de Pedra in Minas Gerais and coke and coal from the port of Sepetiba in the state of Rio de Janeiro for the Presidente Vargas Steelworks and transports exports of CSN for the Port of Sepetiba and Rio de Janeiro. The railway system connects to the Presidente Vargas Steelworks Sepetiba Container Terminal, which handles most of CSN's steel exports (SEC, 2011). Independent of the type of transfer, or where it is performed, one must consider the loss of goods during the process. The amount of charge lost depends on the modal used type of packaging the product state and fleet number of transfers. Products in containers have no loss, since the bulk materials loss is significant, particularly when it comes to road transport made by older vehicles. Considering the storage operation, Faria and Costa (2007) report that it has as main objective the establishment of the flow of product movement and its decisions are related to the areas, conditions, equipment and operating methods. Also the inspection and return of materials, routes of movement and handling involved. In this case, this study considers the cost of storage fee for intermodal terminals and ports for storage on the chemical. An important cost to consider is also the opportunity cost of the stored product, since the capital immobilized could be used differently. In the case of the product in question can be considered as cost of storage, the storage fees per unit stored per unit busy or occupied area, in terminals and ports and the opportunity cost of the stored product. The main costs in existing taxes on customs operations are: use of port infrastructure, use of ground infrastructure, transhipment and storage fees. In summary we can say that the costs of port operations are port charges (use of port infrastructure, use of terrestrial infrastructure); opportunity cost of inventory on the truck (because of queues and delays to discharge) and remuneration per stay (JTASIDER, 2011).

7 As discussed above, the total logistics costs of disposal to the foreign market is formed by transport costs, storage, transshipment terminals and port costs. An outline of these costs can be viewed in table 2. TOTAL COST LOGISTIC Transportation cost Storage cost Transshipment cost Port cost Freight Rate storage in terminals Cost of transshipment Ports rates and ports intermediary Loss of goods Opportunity cost of the stored product Cost of transshipment in the port Pay per stay Loss of goods during transhipment Table 2 - total logistics costs of disposal for the export market Opportunity cost of stocks on the truck 5. METHODOLOGY We carried out a survey, through interviews, via the web, with some trading companies to obtain data of the export market. With the results of the research was possible to qualify and quantify the exportation chain costs of such product, as well as a market situation today. We sent a total of ten (10) questionnaires, with open and closed questions, the different trading companies located in different countries, including Brazil, who sell sheet metal. Of the total sent, 07 (seven) responded. However, only five (05) responses were usable for our study. 6. RESULTS AND FINAL CONSIDERATIONS With respect to competitiveness, the companies reported that the Brazilian steel industry is among the most competitive in the global market and has comparative advantages that allows you to preserve this position. The tax relief on investments and exports and improving financing conditions are determining factors in fully utilizing the potential of the country Another trading reported in relation to protectionism, the use of the export potential of the Brazilian steel industry depends on reducing the barriers of access to external markets. Another company commented on logistics, the following: "the competitiveness of Brazilian products in foreign markets and increase exports of steel in the country depend on the expansion of systems and reducing logistics costs." Of all the 05 (five) trading, only one showed values quantified in logistics costs that are presented below. This trading normally exported at a price of approximately US / ton. Typically in the form of bales, ie cut sheets in predetermined dimensions by customers, with weight 2.5 tons transported takes place in containers 20"of up to 25.0 metric tons. Then the product is transported to the port by truck at a price of US50.00 / ton. Normally the truck takes up to metric tons at a total cost of US When the port still has a cost of US28.00 /ton on port handlings and more US33.00/ton to cover the costs of transhipment. And finally we have the freight cost of the ship which is US42.00 / ton. It is worth mentioning that in the year 2010, this trading company exported a total of 6,700 metric tons of sheet metal. The customs bureaucracy appears as the main obstacle to expansion of exports representing approximately 40.0%, and secondly as an obstacle appear port costs. Other major obstacles are marketing channels, and tax bureaucracy, marked by, respectively, 23.9% and 22.6% of the trading companies surveyed. The tax issues, with regard also to the difficulty of recovery

8 of tax credits, appear among the most important obstacles to exports, reported by 36% of companies. In Brazil, in summary, the instability of exchange, the logistics of transporting goods and the lack of information on export procedures represent the biggest barriers to Brazilian companies export their products. Also with respect to our country, most of the production of sheet metal, intended for export, produced here, out of the production company via trucks, which is an expensive means of transport that compromises the price to the consumer. The port structure also requires improvements to the optimization of integrated logistics. 7. REFERENCES ALFREDINI, P.; ARASAKI, E. Artworks and management of ports and coast. São Paulo: Blucher, ÂNGELO, L. B. Logistic Costs Transfer Products and Studies GELOG -UFSC Available in: Access in: 10/09/2011. BALLOU, R. H. Supply chain management: logistics business. 5.ed. Porto Alegre. 4ª. Edição. Editora: Bookman, BOTELHO, L.G. Supply chain management: logistics business. Dissertation. Graduate Logistics business PUC Rio, BOWERSOX, D. J.; CLOSS, D. J. Business Logistics. São Paulo: Atlas, EIRAS, J. & FIGUEIREDO, R. Collaborative Transportation: concepts, benefits and practices. Institute of Logistics and Supply Chain, FARIA, A. C.; COSTA, M. Gestão de Custos Logísticos. São Paulo: Atlas, JTASIDER. TRADING COMPANY. Available in: Access in 01/11/2011. HUTT & SPEH. Business Marketing Management. Orlando, Dryden Press, IAB - INSTITUTO DE AÇO BRASIL. Available in: Access in 03/11/2011. IBS - INSTITUTO BRASILEIRO DE SIDERURGIA. Disponível em: Acesso em 05/11/2011. OJIMA, A. L. & YAMAKAMI, A. Analysis of the logistical movement and competitiveness of soybean in the brazilian center-north region: an application of a spatial equilibrium model with quadratic programming. In INTERNATIONAL CONFERENCE ON AGRI-FOOD CHAIN/NETWORKS ECONOMIC AND MANAGEMENT, 2003, São Paulo. Available in Access in: 05/09/2011. SEC - SECURITIES AND EXCHANGE COMMISSION -Washington, D.C Avaliable in: Access in 03/11/2011.

9 SILVA, C. R. L; FLEURY, P.F. Organization Assessment Business Logistics in the Food Supply Chain: Industry and Trade. R A C. Magazine Contemporary Management - ANPAD, Jan, 2000.