After the tax reform, what are the pain points in the cross-border logistics market in Brazil?

In November 2023, during a live connection with Fang Ke, the founder of Anjun Logistics, Fang provided a detailed and comprehensive explanation of the changes and current situation of logistics in Brazil after the tax reform.

The main content of Brazil's "Compliance Tax Payment Plan (PRC)" is that all inbound parcels need to pay a 17% Import Circulation Tax (ICMS tax). The preferential policy of "duty-free for goods under $50" continues, but parcels with a value of $50 or more will incur an additional 60% comprehensive import tax. This event has put the Brazilian logistics market on the path of compliance and ushered in a comprehensive iteration.

Currently, Brazil's logistics still needs to address some historical issues, and new challenges have arisen after the implementation of the tax reform. In general, the pain points of Brazilian logistics are:

High tax rates: Brazil has multiple taxes, high tax rates, each federal state has its tax laws, and the tax system is complex, with long processes and strict regulations. After the tax reform, ICMS tax rates in each state are unified and fixed, but overall tax rates have increased, and regulations are stricter, leading to increased costs for sellers and logistics providers.

Customs clearance difficulties: After the new policy, there are more items in the customs clearance conditions; the customs clearance location is no longer limited to the Curitiba Ceint warehouse but still lacks customs clearance facilities; in terms of tax payment mode, there are significant differences between PRC parcels, cross-border DDP, and DDU modes. Additionally, e-commerce and logistics companies need to obtain qualifications and make connections to enjoy the customs clearance convenience of PRC, which involves complex processes and conditions.

High costs and slow delivery: Brazil's logistics started late, and infrastructure construction is very weak. For a long time, over 85% of e-commerce parcel orders within Brazil used Brazil Post, and local logistics resources are scarce, leading to limited choices. Moreover, with a long logistics chain, overall costs are still high, and delivery times are slow. After the tax reform, commercial express delivery has risen, but the industry is still in its early stages.

Regarding the new changes and issues, Fang Ke, the founder of Anjun Logistics, suggests that facing the trend of compliance and iteration, companies need to change their mindset, actively respond to policy changes, which is a test and an opportunity for the development of e-commerce logistics in Brazil.

Having entered Brazil since 2019, Anjun Logistics has profound insights and mature experience in the local logistics market. They have made many pioneering initiatives, starting from scratch to build a moat and provide valuable references for sellers and logistics providers entering the Brazilian market.

Anjun Logistics first helped the Brazilian government establish a bilateral agreement for the direct delivery of small parcels from China to Brazil. They transformed from "mail to mail" to "business to mail," optimizing the overall service quality of the China-Brazil cross-border small parcel line. Later, combining with China's "three-match" proposal, they suggested a solution supervised by tax numbers, which was recognized by the Brazilian government, addressing the issue of regulating the supervision of imported e-commerce goods.

During the pandemic, facing disruptions in airfreight flights and chaotic ground services at airports, Anjun Logistics promptly established the first airport ground service company operated by a Chinese enterprise. To solve the problems of on-the-way supervision of goods and warehouse supervision, Anjun Logistics won the bid to join the service tender for the Paraná State Customs Supervised Warehouse, dispatching personnel to work in the warehouse and conduct in-warehouse operations.

After years of deepening localized business operations, Anjun Logistics gradually introduced more diversified services. Currently, Anjun Hut has expanded to 200 locations, and the pickup network in São Paulo has begun to take shape. Facing the drastic changes brought about by the tax reform, while continuing to monitor, Anjun Logistics timely proposed more advantageous solutions to help e-commerce companies better expand the Brazilian market.

After the tax reform, Brazil's e-commerce logistics can be said to have reached a crucial turning point, and Brazilian e-commerce and logistics are entering a path of benign development, with more significant growth expected.

According to the latest data from the Brazilian E-commerce Association (ABComm), it is expected that the momentum of e-commerce growth will remain unchanged in the next four years. Specifically, by 2024, e-commerce revenue is expected to reach 205.11 billion reais, a growth of 10.45% compared to the sales forecast for 2023.

In addition, in April 2023, Brazilian President Lula visited China, deepening the comprehensive strategic partnership with China, opening up a new era of Sino-Brazilian relations, and actively exploring the alignment of the Belt and Road Initiative with Brazil's "reindustrialization" strategy. Chinese e-commerce logistics companies going to Brazil show a more positive development trend.

Since 2023, more and more e-commerce platforms have intensified their efforts in the Brazilian market: Amazon Brazil officially opened to Chinese merchants, Chinese cross-border e-commerce giant SHEIN announced an investment of nearly $150 million in Brazil, TikTok plans to enter the Brazilian e-commerce market, and Temu also sent a delegation to Brazil to investigate the market...

As one of the pioneers in logistics going to Brazil, Anjun Logistics, with in-depth localized service layout, is committed to building a logistics bridge from China to various countries in South America, aspiring to become a leader in cross-border direct mail lines in Latin America and a leader in local e-commerce logistics.

At the end of 2023, Anjun Logistics signed a lease agreement for a 25,000-square-meter customs supervised warehouse with São Paulo GRU Airport. A significant portion of globally shipped commercial clearance items to Brazil will undergo customs clearance and sorting in this supervised warehouse. This means that Anjun Logistics will become a major service provider for the transformation of Brazilian cross-border e-commerce from postal clearance to commercial clearance channels.

In 2024, Anjun Logistics is about to launch five new businesses, covering five dimensions: cross-border small parcel direct mail lines, port business, local express delivery, express delivery, and overseas warehouses. This will bring disruptive solutions to the e-commerce logistics market in Brazil and even the entire Latin America.

On January 18th, Anjun Logistics will hold the 2024 Product Launch and São Paulo Airport Customs Supervised Warehouse Handover Ceremony in Brazil. Cross-border e-commerce logistics expert Xiaosheng will join hands with Anjun Logistics to directly broadcast the event, unveiling the specific content of the five new businesses, witnessing the birth of the first customs supervised warehouse of Chinese-funded enterprises in Brazil. At that time, many mysterious heavyweight guests will also be present to make forward-looking trend predictions and analyses for the Brazilian e-commerce logistics market in 2024. Let's look forward to it together!

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