Delivery and distribution costsThe Verde website currently offers pricing per tonne already that includes free delivery to the customer in three states:
Minas Gerais (the home state for the mine, processing plant (Sao Gotardo) and the administrative offices (Belo Horizonte)
Goias - to the north west of Minas Gerais
Sao Paulo - to the south of Minas Gerais
Given the significant cost of providing "free delivery", which in Q2 cost R$190 per tonne, versus the cost of the finished product at R$63 per tonne so 3 times the cost to deliver as the cost to make, I have been scrolling through delivery manifest in a local online database to see what distances are invloved in the "free delivery" zone.
In the last week, 35 tonne bulk shipments have gone out for free to customers that are located in Goias with distances listed between 400 and 900 km (I am assuming these would be round trip and not one way figures).
In the same time period there have been free deliveries to customers in Sao Paulo State with distances listed between 350 and 600 km.
Rather than offering open ended free dilivery bay selected states, perhaps it would be more cost effective to have a base price, then a delivery gross up per tonne based on expanding radi from teh processing plant? Anything with say 75 km of the plant is indeed free. 75 to 150 km is plus R$X per tonne, 150 to 250 plus R$Y per tonne, etc.
At three times cost on average, we need to knock of the far distant yet still free dilery customers, based on my analysis so far.
Cheers,
S