BR-163 Asphalt x Freight Reduction

Last Friday, the 14.02th of February, the 50 km of asphalt road on the BR-163 that were missing to connect Sinop, in the state of Mato Grosso, to the ports of Miritituba, in Pará, were finally inaugurated. Although the paving had been ready since November 2019, it was only now, in February 2020, that the road was actually inaugurated with the presence of the President of the Republic.

It may not seem like much, but this stretch made the journey very low in predictability, given that many vehicles loaded with soybeans stopped along the way due to the poor quality of the road.

In the rainy season, the journey by truck from the Midwest to Miritituba or Santarém, which on average should take 4 to 5 days, took 8 or 9 days. This made freight more expensive, and the uncertainty of when the vehicle would arrive at the port was always a concern for companies.

With the asphalt, came the drop in the value of freight and greater certainty in the date of arrival at ports. Companies in the sector indicate that their freight rates have already dropped between 15% and 20%, as well as the travel time effectively reduced from 3 to 4 days, depending on the route traveled. These results bring greater competitiveness for Brazilian soybeans in the international market.

The good news is that companies expect that, with lower freight rates, this corridor will move more and more. This is in line with a study carried out by ILOS in 2007 on soy logistics in Brazil. At that time, the north exit already proved to be an excellent alternative, as long as the BR-163 was no longer a problem.

In recent years, the private sector has invested in the region by building new port terminals and, now, the government has also done its part, paving the stretch that was still dirt. However, it is worth mentioning that, as important as the paving itself, is the maintenance required so that the road can be used throughout the year. After all, the climate in the North of Brazil is known for the heavy rains that happen regularly throughout the rainy season. Now we hope that: first, maintenance is carried out with the necessary regularity so that the asphalt lasts longer than a summer, and second, so that Ferrogrão leaves the drawing board and becomes a reality.

I am aware that we will not build a railroad in the same speed that China was able to build a hospital, but neither can we wait for another 30 years.