A very special day for those who work in this area to celebrate their personal achievements and direct participation in the country’s economic development.
But do you know the story behind this date and what is the market scenario for those who work with comex today in terms of careers?

No?!

No problem, in the next few minutes we will tell you a little about the history of foreign trade in Brazil and you will understand even more how important foreign trade professionals are for the country’s economic wealth.

HISTORICAL CONTEXT

It all starts with the arrival of the Portuguese royal family and the establishment of the royal court in Brazil in 1808.
At that time, Portugal feared the imminent invasion of Napoleon and, out of an act of courage combined with necessity, the then Regent Prince Dom João de Bragança, decided to transfer the royal court to the Tupiniquin lands. From there on, a series of measures are taken that culminate in Brazil’s emancipation, which up to that moment was just a Portuguese colony.

Among the actions taken that same year – more precisely six days after his arrival – Dom João VI signed a royal letter on the 28th of January: the Decree of “The opening of the Brazilian Ports to Friend Nations”, which determined that, from then on, Brazil was free to do business with other friendly nations of Portugal. Before the decree, the products exported by Brazil had as POD (Port of Destiny) exclusively Portugal, which later re-exported them.
Such decree was the first step towards independence that would come years later, on the banks of the Ipiranga River, in 1822.

This is why January 28, 1808, is considered the beginning of Brazilian Foreign Trade.

The main exported products were sugar, cotton, tobacco and coffee and the country with which Brazil had the most import and export operations was England.

With the economic explosion that came with the England Industrial Revolution, Portugal signed an agreement with them where many benefits were guaranteed to the English in negotiations involving products from Brazil to the detriment of products produced in Great Britain.

This commercial agreement, known as the Treaty of Commerce and Navigation or the Pelris Treaty, authorized the entry of English products into Brazil upon payment of taxes at a rate of 15% ad valorem. Products originating from other locations were subject to a 24% tax. On the other hand, Brazilian products that were prohibited from entering English soils were then allowed.

The continuation of this history involves the independence of our nation and the industrial and economic development whose main mechanism is foreign trade for the control and regulation of the entry and exit of goods.

THE IMPORTANCE OF FOREIGN TRADE AND THE BRAZILIAN TRADE BALANCE

As we have seen, since its origins in Brazil, Foreign Trade is a powerful tool in promoting economic and cultural development. Likewise, when we get to know the Foreign Trade history, we can see that since the beginning it was always necessary to deal with the challenges of imposing trade conditions on other nations that were favorable to Brazilian interests.

A nation is considered economically prosperous when the main indicator of foreign trade, the Trade Balance, results in surplus.

The Trade Balance points to the difference found between exports and imports. When the balance of exports is greater than the balance of imports, there is a surplus. When the difference is negative between exports and imports, you have a deficit.

In other words, a well-economic country sells (exports) much more than it buys (imports).

Let’s get to know a little bit more about the current reality of Brazilian Foreign Trade.

According to data released by the Brazilian Ministry of Economy, the Trade Balance ended 2021 in a surplus of US$ 61 billion. This was the Brazilian record for surplus in its history: growth was 21.1% higher in relation to the previous year.

This positive balance of Brazilian Foreign Trade is largely due to the 28.3% increase in the value exported compared to the previous year.

The increase in exports was mainly observed for the United States (44.9%), Mercosur (37%), Association of Southeast Asian Nations – Asean (36.8%), European Union (32.1%) and China (28%).

The main products exported by Brazil are soy, crude oil derived from petroleum and minerals, iron ore, beef, poultry, and cellulose.

Regarding imports, the growth in imported value was 14.2%, and the origins with the highest rates of increase were Mercosur (44.7%), the United States (41.3%) and China (36.7 %).

The main products imported by Brazil are petroleum or mineral fuel oils, manure or chemical fertilizers, manufacturing industry products, telecommunication equipment, and thermionic valves and tubes.

As we can see, Foreign Trade was not only important in the historic process of Brazil’s independence, but continues to be extremely relevant today.

It can be seen that currently Foreign Trade sextor has been using more and more of the new technological trends and innovative models available in the global market.

The main trends serving Brazilian Foreign Trade companies is the mass management of data and its functionalities. The Brazilian Government has invested vigorously in technological development of technological systems and functions that promote better control and greater facilitation of the steps involved in the entire chain.

The topics that have set the tone in the speeches of CEOs and key professionals from the main foreign trade players are risk management, comex 4.0 and industry 4.0, big data, business intelligence, and automation via artificial intelligence.

Professionals who are looking to start in this career or those who want to continue acting with relevance in the foreign trade market need to be updated on these new market trends.

To be prepared for the new it is important to know what is comex 4.0 and all its outcomes.

In addition, those who want to stand out in this scenario can seek to specialize through courses and training that involve Power BI – Business Intelligence, Data Analysis and Management – Big Data Centers, Risk Analysis and Management, New Import Process – NPI and DUIMP, Dashboards and KPIs, Systems Integration and Automation – API.

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Insurance is not mandatory in Foreign Trade operations, but highly recommended by any experienced professional in the sector, especially considering that in this transit (whether by sea, air, road or rail) many things can happen, and the cargo can be totally either lost or damaged. International cargo insurance is extremely important, therefore, for cases of:

• Robberies and thefts.
• Damage that the cargo can suffer while it is stored in the port.
• Maritime piracy.
• Accident with containers.
• Damage during handling.

Depending on the INCOTERM previously negotiated between the importer and the exporter, the responsibility for contracting insurance will be this or that one.

It is important to note, however, that some setbacks are not under the insurer’s responsibility and exempt it from compensating the contracting party in situations such as:

• War cases.
• Bad faith conduct by the importer in order to obtain gains from giving false information about the state of the cargo.
• Default of the contracting party.

When the goods to be exported are of Brazilian origin, the contract must be closed with a national insurance company, but if the destination is Brazil, the Brazilian importer can opt for an insurance company from another country, if he is responsible for contracting and paying the policy.

How much does it cost to contract the insurance and how to get a good cost-benefit?

Searching for different suppliers of a particular product or service is always the best way to get good offers and quotations, the same works for hiring an international cargo insurance. It is important for the exporter or importer to do deep research and assess which insurance company makes the most sense for its operation and meets the specifics of the operation.

A complete insurance proposal must basically contain:

• The value of the prize.
• Deductible on the policy.
• Term of coverage.
• Maximum warranty limit.
• List of items that are not insured.
• Risks that the insurer will cover.

For such it is essential that the contracting party provides as much detail as possible so that there is no misunderstood information, thus avoiding many problems. That’s why it is the contracting party’s responsibility to make certain information such as:

• Start and end of the insurance coverage location.
• Value of items to be insured.
• Dimensions of the cargo.
• Frequency of operation (since it is possible to contract insurance for reiterated operations that happens in a specific period).

However, always pay attention to every step of the process and always choose reliable suppliers so that your operation is carried out successfully!

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The air modal serves the same long distances as the maritime transportation, but the delivery time of this latter is much longer, which is why importers need to well-plan so that they receive their goods in a timely manner, avoiding problems.

One of its main advantages is in fact the cost, plus its greater capacity in cargo transport (as for the mentioned commodities, for instance). On the other hand, some of its disadvantages are the need for transshipment at ports, the long distance to reach production centers and the congestion at ports, which is one of the biggest problems that Foreign Trade has been facing since the beginning of the pandemic.

Currently, international trade is facing the worst crisis since the beginning of the history of container usage, as the rapid increase in world demand caused a shortage of empty spaces available, causing the price of international freight to rise steeply as a whole and several ports around the world experienced congestion, causing numerous delays in deliveries.

What documents are required for this operation?

The main documents required for an import by sea are:

Certificate of Origin
Packing List
Proforma Invoice
Commercial Invoice
Bill of Lading
Import License
Import Declaration

Cabotage

One of the subjects currently being discussed, matter on which, in fact, there is even a bill called “BR do Mar” (“sea highway”) to be approved, that is the use of cabotage (or coasting), which consists of domestic maritime transport between Brazilian ports.

Brazil has more than 8,000 km of coastline, so taking advantage of such modal is essential to increase the efficiency of our logistics, which is mostly dependent on the road modal, so subject to the risk of accidents, cargo theft and the cause of a large part pollution of the environment.

This bill, however, has yet to be approved by the Senate and still is the subject of several debates aiming to assess whether its implementation will be feasible or not.

The main Brazilian ports

Brazil has approximately 175 port cargo terminals, which include terminals for long-haul shipping (for imports and exports) and waterway facilities located on the countryside of the country that enable inland maritime transport through our rivers and lakes.

Currently, the main Brazilian ports that handle the largest volumes of cargo are:

1) Port of Santos (SP)
2) Port of Paranaguá (PR)
3) Itapoá Port (SC)
4) Portonave (SC)
5) Port of Rio Grande (RS)
6) DP World Santos (SP)
7) Chibatão Port(AM)
8) Port of Suape (PE)
9) Port of Itajaí (SC)
10) Port of Rio de Janeiro (RJ)

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One of the modes that can be used is by air, which despite the higher cost compared to shipping via containers, makes the speed of delivery compensate in certain situations.

According to data from the Federal Government’s infrastructure official website, the air modal is still little used in Brazil: only 4% of all cargo handled in the country and the main reason for this is precisely the high cost of this type of operation.

What are the advantages of air freight and when to choose it?

The speed is one of the most important aspects in this modal, as a cargo that would take weeks to reach its destination via container takes a few days by air modal. Not to mention that, in addition, the matter security is also very relevant in air freights, considering that the risk of accident or cargo theft is much lower compared to other forms of transport.

With regards to urgent cargo, the air modal is also perfect to meet expectations and is widely used in the transport of perishable food, flowers, replacement items for machinery, jewelry and equipment used in the medical industry, as we have been following in the news in these times of pandemic the air transport of personal protective equipment, vaccines, respirators, medicines, among many others.

What documents are required for this operation?

As with other modes of international transport, air freight requires a Bill of Lading, in this case known as Air Waybill and called on the day-to-day as AWB, which is issued by the airline itself or by the international cargo agent.

It contains essential information about the cargo, such as: name and data of the issuing company, general information (name, address, CNPJ) of the exporter and importer, quantity of packages, weight, dimension, and type of packaging.

What are the main cargo airports in Brazil?

Due to its territorial extension and large population, Brazil is one of the countries with the largest number of airports in the world, in which, in addition to the large number of passengers transported, it is estimated that about 1 million tons of cargo enter and leave our territory annually.

Viracopos Airport, located in the city of Campinas, countryside of São Paulo state, is the busiest in the country in terms of cargo volume, which has intensified in recent months with logistics aiming the arrival of vaccines against Covid-19 in the country. So true that the airport has already received some international certifications and awards due to its good performance and efficiency of its logistics.

After Viracopos, other airports with the largest volume of cargo transported in Brazil in recent months are Manaus, Recife, Guarulhos, and Brasília.

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