HomePublicationsInsightsLogistic waste amounts to 5% of Brazil's GDP, estimates Cosan

Logistic waste amounts to 5% of Brazil's GDP, estimates Cosan

Cosan's president, Marcos Lutz, reinforced the need to diversify Brazilian modes in order to improve the logistics of national agribusiness production. The executive defended the increase in the participation of railroads in the total composition of transport.

“Agribusiness will clearly be one of the main forces for the Brazilian economy in the coming years and one of the important pillars for us to get out of the crisis we are in today”, he said, during a lecture at the Summit Agronegócio Brasil 2015, an event by the newspaper O Estado de S. Paulo , sponsored by Faesp. Lutz estimated that waste caused by logistical bottlenecks in Brazil is equivalent to 5% of the country's Gross Domestic Product (GDP).

According to the executive, the average cost of transporting grain in the country is four times higher than that of competitors such as Argentina and the United States. As an example, the president of Cosan states that the transport of a ton from Lucas do Rio Verde (MT) to Santos (SP) by road costs R$ 310.

"Basically spending on tires, diesel and trucks (depreciation) does not pay the bill for the roads in Mato Grosso, which are destroyed". In contrast, if the product were transported by truck to Rondonópolis (MT), and then sent by rail to the port, the cost would be R$ 270 per ton. “This includes the investment made (in the modal) which, once paid, is paid”, he clarifies.

Like other panelists on the “Logistics Challenges” panel, Lutz also considered that the private sector needs to act to improve production flow. In this line, he mentions that Rumo ALL, a company of the group, intends to invest BRL 7,4 billion until 2019. The amount refers to the renewal of the fleet of five thousand wagons and two hundred locomotives, in addition to the renovation of more than three thousand kilometers of permanent roads and construction of new yards.

The CEO of JSL Logística, Fernando Antônio Simões, advocates that the private sector and the government work together to explore solutions that improve the flow of agribusiness production in the country. “Industries that have their own solution need to move forward and smaller volume entrepreneurs have to join, create alliances,” he said. “The government has responsibility, but let's not wait for the contribution (to act). We are going to improve what already exists for immediate solutions, not long term ones, ”he said.

Source: The State of S. Paulo

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