SCENARIO OF ROAD INFRASTRUCTURE IN BRAZIL

Road transport is the main means of transporting cargo within Brazil. Although the Federal Government has been increasing investments in other modes, road transport is still responsible for almost 63% of the TKU (tons per useful kilometer) moved in the country, having transported, in 2008, more than 770 billion TKU, a volume 14% higher to that registered in 2006, according to a study by the ILOS Institute.

Figure 1 – Transport matrix in Brazil
Source: ILOS, 2010

The large volume handled and the fact that it is one of the modes with the highest unit price – second only to air transport – mean that road freight transport has a wide representation in the country's logistics costs. In 2008, expenses with the movement of cargo on Brazilian highways were R$ 164,5 billion, or 5,7% of the Brazilian Gross Domestic Product (GDP).
Even though the poor maintenance of highways is the target of complaints from 90% of logistics executives in Brazil, an advantage of road transport is that it reaches practically all parts of the country, unlike rail and water transport. Road transport is also capable of responding much more quickly to companies' demands, by avoiding certain formalities necessary for other transport modes. ROADWAYS THROUGHOUT BRAZIL The Brazilian road network has around 1,6 million kilometers paved and unpaved), with a density of 0,2 km/km2 of the country's area. More than half of the roads are located in the South and Southeast regions, which concentrate 73% of the national Gross Domestic Product. About 80% of the highways are under municipal jurisdiction (1,3 million km), with the remainder being the responsibility of the Federal Government and the States – 76 km and 220 km, respectively (BRASIL, 2011b).

Figure 2 - Map of federal highways in Brazil
Source: Brazil, 2011b

Despite having one of the most extensive road networks in the world, Brazil is still far behind the world's main economies, with only 13% of its roads paved. On the other hand, the United States, a country with similar territorial characteristics, is crossed by 4,37 million km of paved highways, a mesh 20 times larger than the Brazilian one (214 thousand km). India, despite having a third of the Brazilian territory, has a paved road network seven times larger than that of Brazil (CIA, 2011; BRASIL, 2011a). Brazilian problems are not limited to the length of paved roads. A recent study carried out by the National Transport Confederation (CNT) shows that the general state of the country's highways is deficient. Almost 60% of the evaluated stretch¹ were considered in poor condition, with problems mainly in the geometry of the road and in the signaling, in addition to the poor conservation of the paving (CNT, 2010). weight of trucks are some of the factors that affect the conditions of national highways. Studies indicate that 1% load above the limit on an isolated axis increases pavement wear by 4,32%. That is, if the overload is 5% on the truck, a highway designed to last ten years has its useful life reduced to 8,1 years. If the weight exceeds 20%, the durability of the pavement will drop to just 4,5 years (REIS, 2011b). Road inspection is the main way to avoid this type of problem. In 2010, Brazil's federal highways had 70 weighing stations in operation (41 with fixed equipment and 29 with mobile equipment), which corresponds to one station for every 814 km of road. That same year, almost ten million trucks and buses passed through the weighing stations, nine million of which were evaluated on precision scales and 7% were fined for being overweight.

The reflection of the poor state of conservation of the highways is the increase in the operating cost of trucks. The excess of potholes causes vehicles to reduce speed, reducing the number of possible trips per day and, consequently, increasing the cost per trip. In addition, the worse the condition of the highway, the greater the wear and tear on the vehicle and the higher the variable costs, such as fuel, parts, tires, lubrication and washing (REIS, 2011a). According to CNT (2010), the operating cost of the national fleet could be reduced by about 25% if all paved highways in Brazil were in excellent condition.

PUBLIC AND PRIVATE INVESTMENTS

With the aim of improving inspection on the roads, the National Department of Transport Infrastructure (DNIT) launched, in 2005, the National Strategic Weighing Plan (PNP). The PNP has been part of the Growth Acceleration Program (PAC) since 2007 and, in its first phase, received more than R$ 260 million in investments. The second stage of the plan is scheduled for 2011, with the construction, installation, maintenance and operation of another 161 weighing stations on federal highways, a project valued at R$ 1,1 billion.

In addition to the portion related to the National Strategic Weighing Plan, the first phase of the PAC foresaw almost R$ 43 billion in investments for road transport (BRASIL, 2010). Among the targets of these investments is the BR-101 duplication project, considered the main PAC work by 84% of logistics executives in a recent survey by the ILOS Institute.

Investments, however, are still below the needs of the country. According to an estimate by the Institute for Applied Economic Research (Ipea), Brazil needs R$ 183,5 billion in investments to solve problems in the road sector and make it more efficient, resulting in a positive impact on the economy. Ipea's work took into account the works identified as necessary in several surveys carried out by the government in recent years, such as the National Plan for Logistics and Transport (PNLT), the Pluriannual Plan, the CNT Plan for Logistics and the Growth Acceleration Program (IPEA, 2010).

Using another approach, the ILOS Institute made a projection of the investment needed for Brazil to reduce existing bottlenecks on highways and have a road network as adequate as that of the United States. According to the study, the country would need R$ 812 billion to pave 560 km of grid and recover another 126 km of existing ones. This investment is 19 times greater than what was foreseen by the Federal Government in the PAC I for recovery, paving and construction of highways.

The fall in the transfer of federal resources for investment in road infrastructure over the last four decades led the Federal Government to seek, from 1995 onwards, private companies to invest in the sector through the Federal Highway Concession Program. The choice is made by bidding, with the company with the lowest toll rate winning. Through the program, almost 15 km of roads have already been transferred to the private administration, with the concessionaires having invested, until 2009, around R$ 20 billion for the recovery, expansion and improvement of the granted stretches (ABCR, 2011).

In exchange for investments, the government allows concessionaires to explore tolls on highways. In 2009 alone, toll revenue in Brazil was R$8,3 billion, a 23% increase over the previous year. During this period, 1,1 billion vehicles passed through the almost 15 kilometers of toll roads, with more than 270 heavy vehicles, such as trucks and buses (ABCR, 2011).

Another way used by the government to raise funds is Public-Private Partnerships (PPP), an option that has been used on highways with little or no economic profitability. In this case, the PPP is usually done through a sponsored concession, in which the user pays a tariff and the government complements the revenue so that the project becomes economically viable (Soares and Neto, 2006).

THE ENVIRONMENTAL ROLE OF ROAD MODAL

The precariousness of the Brazilian road infrastructure also has a negative impact on greenhouse gas (GHG) emissions and pollutants in the atmosphere. The higher the quality of the road surface, the lower the variation in speed and travel time, reducing the level of GHG emissions. According to Bartholomeu (2006), emissions fall between 0,01% and 0,2% on roads with better paving conditions.

These reductions become even more significant as the transport sector is identified as the third largest polluter in Brazil and in the world, behind only the Change in Land Use and Industries. In 2005, the sector was responsible for 6,4% and 13,5% of emissions, respectively, with road transport contributing most (88,6%) of the gases released by transport activity into the Brazilian atmosphere.

Figure 3 – Transport matrix and emissions matrix by modal in Brazil
Source: ILOS, 2011

The representativeness of road transport in GHG emissions has led the Federal Government and companies to invest in environmental sustainability, creating laws, intensifying inspection and launching new technologies. One example is the use of ecological asphalt in paving highways, such as Imigrantes, in São Paulo. The addition of tire rubber to the asphalt mass produces an asphalt that is 40% more resistant than conventional asphalt, in addition to reducing noise and improving vehicle adherence to the road. The technology uses, on average, 600 tires to produce 1 km/lane of ecological asphalt, at a cost of R$ 90/km/lane, a cost 30% higher than that of conventional asphalt (ILOS, 2011).

Even though the asphalt is ecological and in perfect condition, it is important that the road fleet also contribute to reducing the emission of pollutants. For this, it is necessary to change the type of engine and the diesel used. In 2011, Brazil reached a fleet of 1,4 million trucks, with an average age of around 13 years. More polluting than the other models, the Pre-Euro engine (manufactured before the application of European standards that stipulate emission limits for engines) still drives 40% of the national fleet. In Europe, only 26% of trucks use the Pre-Euro, and the Euro IV, which will not be produced in Brazil, already moves 16% of the European fleet.

Figure 4 – Types of engines in the fleet: Brazil x Europe (2009)
Source: ILOS, 2011

In order to change the profile of the Brazilian diesel fleet, in 1986 the Federal Government instituted the Air Pollution Control Program for Motor Vehicles (Proconve). Through it, the government demands less polluting engines from manufacturers and charges companies that produce fuels to reduce toxic emissions. According to the Proconve calendar, as of January 2012, all diesel trucks produced in Brazil must leave the factory with the Euro V engine, which is less polluting, and fuel distributors must also offer S50 diesel, whose maximum concentration of sulfur is 50ppm. For 2013, the schedule is that the stations already receive S10 diesel (with a maximum sulfur concentration of 10 ppm), even less polluting.

Figure 5 – Sulfur content in Brazil and in the world
Source: ILOS, 2011

The difficulty, however, will be to put the entire system to work in 2012. Automakers are already announcing trucks with the new engines, but the doubt is regarding the availability of the S50 at fuel pumps throughout Brazil. The new diesel requires special infrastructure for storage, which will force all stations to make investments. Without the S50, the new engines will have an automatic power reduction, bringing little or no environmental benefit. The expectation is that the new fleet of trucks will arrive with prices from 8% to 15% higher. The new diesel will also have a higher cost and will also require the use of a reagent to make the Euro V engine gas post-treatment system work. In addition to diesel with lower sulfur concentration, distributors have also been investing in biodiesel . Since January 1, 2010, diesel oil sold in Brazil contains 5% biodiesel and the trend is for this percentage to grow in the coming years. Fuel consumption with 5% biodiesel is almost the same as common diesel, but with less pollutant emissions. According to Anfavea statistics, the best combination for the environment is fleet renewal, using the Euro V engine and S50 diesel, resulting in a potential reduction of pollutants of 34%.CONCLUSION

Although a good part of the national production is moved through the highways, Brazil still lacks a road infrastructure like the one available in the main world powers. Problems such as unpaved lanes or with asphalt in poor condition, poor signaling and inadequate layout interfere with the movement of trucks, impairing issues such as reliability and consistency, in addition to affecting vehicle consumption, greenhouse gas emissions and total logistics costs .
Driven by the development of national production, the Federal Government has been investing in improving the quality of the country's road infrastructure, either with public or private capital. However, the announced investments are still below what is needed for Brazilian companies to have a high-level road network, which helps reduce total costs and helps national companies compete on an equal basis with the major world players.
In addition to an efficient infrastructure, it is also important to intensify concern for the environment. Improving the quality of highways, together with updating the fleet and using less polluting fuels and engines, contributes to reducing the impact of transport on emissions into the atmosphere.

BIBLIOGRAPHIC REFERENCES

• ABCR. Annual Sustainability Report, Available at http://www.relatorioweb.com.br/abcr/?q=pt-br/node/118. Date of access: 14/April/2011.
• BARTHOLOMEU, DB Quantification of economic and environmental impacts arising from the state of conservation of Brazilian highways. Thesis (Doctorate in Applied Economics) – “Luiz de Queiroz” School of Agriculture, University of São Paulo, Piracicaba, 2006.
• BRAZIL, Ministry of Planning. Growth Acceleration Program – 4 Year Balance – 2007 – 2010, 2010.
  ______, National Department of Transport Infrastructure, PNV. 2011.
  ______, Road Map. Ministry of Transport. Available at http://www.transportes.gov.br/index/conteudo/id/35852. Access date: 02/June/2011.
• CIA. World FactBook. Available at https://www.cia.gov/library/publications/the-world-factbook/. Date of access: 13/July/2011.
• CNT. CNT Survey of Highways 2010: management report. Brasilia, 2010.
• ECOVIAS,
• ILOS. Overview of Logistics Costs in Brazil. Rio de Janeiro, 2010.
  ______.Panorama Logística Verde – Environmental sustainability initiatives by companies in Brazil. Rio de Janeiro, 2011.
• IPEA. Brazilian Highways: Bottlenecks, Investments, Concessions and Concerns for the Future. Brasília (Axis of Brazilian Development Series – Ipea Announcements no. 52), 2010.
• REIS, NG Impact of road conditions on truck operating costs. Available at http://www.guiadotrc.com.br/truckinfo/Artigos/impacto_mauestado_rodovias.asp. Access date: 02/June/2011.
• REIS, NG Excess weight gains manual. Available at http://www.portalntc.org.br/index.php?option=com_content&view=article&id=612:excesso-de-peso-ganha-manual&catid=38:highlights. Access date: 03/June/2011.
• SOARES, RP; NETO, CASC From Highway Concessions to Public-Private Partnerships: Concern with the Toll Value. Brasilia, IPEA (Text for Discussion No. 1186), 2006.

Maria Fernanda Hijjar is Director of Market Intelligence at the Institute of Logistics and Supply Chain – ILOS
mariafernanda.hijjar@ilos.com.br
Alexandre Lobo is a consultant in the Market Intelligence area at the Institute of Logistics and Supply Chain – ILOS
alexandre.lobo@ilos.com.br
Tel .: (21) 3445-3000

¹ The CNT assessment took into account almost 91 kilometers of roads, which correspond to the length of the entire paved federal network and the main state highways.

Authors: Maria Fernanda Hijjar and Alexandre Lobo