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MANAUS, BRAZIL-The announcement of new K-Line feeder service beginning in mid-October by Japan’s Kawasaki-Kisen-Kaisha Ltd. between the US East Coast and Brazil’s Amazon region highlights the South American nation’s rising role in world trade. The bi-weekly service, to be jointly operated with Miami-based Bringer Lines, will deploy two 500-TEU vessels traveling between Savannah or Port Everglades, FL and Manaus or Vila do Conde, Brazil.

The announcement coincided with the inauguration by TAM Cargo, the freight unit of Brazilian airline TAM Linhas Aereas, of the organization’s largest freight terminal, in Manaus. The facility has an operational area of 23,250 square feet, three times the size of the former Manaus facility, providing more than 80 tons per day of storage capacity.

“Manaus is strategic for TAM Cargo as a result of steadily increasing production at its duty free zone and the increase in international flights at the airport,” explains Paulo Castillo Branco, TAM vice president for planning and alliances. “The new terminal can handle nearly 35% more freight than its predecessor, in addition to allowing for expansion in coming years, depending on market demand.” He says the larger terminal will make it possible for new partnerships with air and ground transportation companies.

While rapidly escalating global demand for agricultural and mineral commodities has driven much of Brazil’s trade growth so far, the recent development of global manufacturing facilities in the Amazon region looks to play an increasing role in future growth. As evidenced by the above, the trend has not escaped the attention of the international logistics industry.

Manaus and the surrounding state of Amazonas have become the focus of the renascent manufacturing industry because of the availability of undeveloped land, access to natural resources and attraction of the Manaus free trade zone. The Brazilian government created the trade zone in the 1960s, but only in the past decade has the area begun to catch fire, as motorcycle and home appliance manufacturers, among others, established a growing foothold to take advantage of special tax incentives. Manufacturers import parts and materials from Asia and North America, assemble them at local production facilities, then sell finished goods to the US and Europe.

In addition, over the past few years, a domestic market for these products has also arisen in response to Brazil’s rising economic tide. Already the world’s twelfth largest economy, the country anticipates GDP growth of 5.8% for 2008, according to AMR Research. The rate is among the highest in the world.

In late August, the Boston-based firm, which provides research and advisory services for supply chain and IT executives, released a survey of supply chain technology spending intentions for the Brazilian market. Produced in cooperation with the COPPEAD School of Business of the Federal University of Rio de Janeiro, the survey queried executives from 108 Brazilian companies with revenue from $100 million to well over $1 billion.

The survey found that Brazilian companies are as likely to buy supply chain technologies as US and European counterparts but are much more aggressive in using such technologies to drive top-line growth. In addition, supply chain hardware and application infrastructure spending by Brazilian companies is 20% higher than in Europe and North America, signifying deeper overall growth. According to AMR researchers, other findings reveal that the rapid expansion of country’s middle class is forcing Brazilian companies to extend their supply chain and ITT capabilities.

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