Brazil’s logistics sector braced for higher costs amid soaring fuel prices

Around the world, the war sparked by Russia’s invasion of Ukraine has ignited concerns about disruptions to global logistics and supply chain operations. Much of the worry is caused by oil price shocks, as well as interruptions to cargo transport in and out of the two warring countries.

In the first week of the conflict, major shipping firm Maersk warned that the turmoil in Eastern Europe has “a global impact, not limited to trade with Russia.”

In Brazil, however, the effect on the logistics sector is still diffuse. “The impact [of the war] has been low so far,” said Marcos Alberici de Mello, managing partner at management consultancy SCAMBO Consultoria, earlier this month.

The rationale here is that the war will not exactly plunge Brazil’s logistics sector into turmoil, instead it will deepen existing problems, namely rising costs due to the relentless increase of fuel prices.

Over 2021, the price of diesel increased by almost 50 percent — almost five times that of the overall inflation rate. Any hopes that oil prices would stabilize this year were dashed when Russia invaded Ukraine.

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