What do you need to know about trading with Brazil?
Working with different markets is an excellent strategy for companies that do not want to become dependent, as the more countries you reach, the lower the risk of being affected in cases of seasonality or crises suffered by the few trading partner nations they maintain.
The world is full of countries that operate in the international market, and some are specialists in certain products, depending on their territory and climate, while others can produce practically anything since they have vast space, abundant population, and favorable weather, such as China, United States, India, Russia, and Brazil.
The latter, Brazil, country whose territory is the fifth largest on the planet and one of the biggest economies in the world, is full of opportunities for freight forwarders, but before venturing out, it is necessary to understand some important details to avoid serious problems.
What are the advantages of working with Brazil?
Extensive in territory and abundant in population, this Latin-American nation is the continent’s largest economy. Brazil maintains a healthy trade balance, especially for those seeking opportunities in foreign trade, as the country has a high volume both in exports and imports.
In addition to offering many businesses to share, Brazil is also a country of welcoming people and a dazzling and receptive culture, which makes negotiation very smooth, as Brazilian executives feel comfortable with contact, meetings, calls, and teleconferences.
What precautions are necessary when negotiating with Brazil
As it is an emerging economy, foreign cargo agents need to pay attention to some important details before looking for a business partner in the Latin American country. With the exchange rate between the local currency and the dollar, it is common to hear about cargo agents in Brazil who receive the amount to pay the freight from their customers and do not pass it on to the shipowners, pocketing the money.
In addition, economic instability makes it a little riskier for freight forwarders who do not know the operational details of the process bureaucracy, which can result in fines and other mishaps that, when occur, can cause inconvenience for all sides, but mainly for those who want to explore this continental country.
Legislation
Never dispatch a shipment to Brazil before receiving formal approval from the consignee. Brazilian legislation requires the importer to be registered and authorized to operate in foreign trade.
In addition, every shipment requires several documents and detailed information that, when absent, create problems for the importer and for the freight forwarder, such as the wood used for shipment, which, if not treated and certified, must be re-exported before the product to be released by customs.
Financial risk
All mistakes present in international cargo shipments take time to resolve, which can result in extra storage costs, demurrage, fines, extra inspections, or expert analysis by engineers (in cases when Brazilian Federal Revenue suspects that the product is not exactly what is being declared).
Another factor of concern is the exchange rate disparity and instability that transforms a few dollars into many reais (local currency) after conversion, motivating some entrepreneurs not always to comply with their financial obligations, since there can be variations of 10 to 15% in the Brazilian currency in a matter of weeks. Therefore, it is important to understand the financial health of the freight forwarder before starting to work with him.
Language
The local language is Brazilian Portuguese, a variant of Portuguese from Portugal, the country that colonized Brazil. Foreign trade professionals mostly write and understand English and Spanish well, so it won’t be difficult to trade in any of the three languages.
Outside the business environment, people in general do not have good fluency in languages other than Portuguese, so it can be tricky traveling to Brazil without the help of a local, as people cannot always understand what foreigners say and traffic signs in Brazil are not bilingual.
Culture
As a Latin country, Brazil is extremely receptive to business and people. Be aware that visiting someone’s house can result in a big party and is equally sure that you will experience great meals. It is common in Brazil for international freight forwarding executives to be invited for lunch or dinner before or after a business meeting.
Corporate gifts and giveaways are also appreciated but be careful as Brazilian customs restricts travelers to enter the country bearing large amounts of goods, even if they are to be distributed on visits, so before taking a full suitcase of notebooks and calendars, check if the quantity is within the allowed or bring gifts just for the most important meetings.
Conclusion
Although permeated by social imbalance, Brazil is one of the richest countries in the world. It is among the ten largest economies, which makes it the target of freight forwarders from all over the world for the certainty of profitable and regular business.
In order for shipments to take place in a healthy way and without hiccups, it is advisable to pay attention to the points brought by this article to protect yourself from unforeseen events that happen on a daily basis, but which only prepared cargo agents will be ready to solve.