Good news for transport activity in Brazil. For the second consecutive year, the railway modal grows strongly, with an increase of 8,5% compared to 2017, reaching 407 billion RTK handled in 2018. Responsible for 75% of the volume handled by railroads in Brazil, iron ore was the main driver of this good result, with its turnover having grown just over 9% in the period.
Figure - Evolution of rail movement in Brazil
Source - ANTT
The good news, however, opens up another not so good news: only mining companies use modes in Brazil, in an adequate way, to move production. Responsible for a low-value-added, high-volume commodity, these companies ship all of their production through railroads, a suitable mode for this type of product.
Alright, Brazil is one of the main producers and exporters of iron ore. But Brazil is also one of the main producers and exporters of soybeans, corn and sugar in the world, and they represent only 18% of the movements on the country's railways. Realize that this is not a criticism of the companies, but of Brazil, which does not provide a balanced transport infrastructure for its production to be shipped in the most efficient way possible, with lower costs.
Let's take the case of soybeans. Responsible for the second main product in volume exported in the country, soybean traders ship only 46% of the grains for export by rail. The remaining? It goes by truck, traveling 2 km if you leave the North of Mato Grosso for Santos, or by waterway, leaving through the North region. But even this last one still needs to travel more than 1.000 km by truck, on a precarious road, until it reaches the entrance to the waterway, in Miritituba (PA).
Now let's look at the second largest soybean exporter in the world, the United States. Owners of a railway network 10 times larger than Brazil's and a more balanced transport matrix, they transport 80% of the soybeans for export by rail or waterway. Overall, nearly half of exported grain travels down the Mississippi River by barge, with just over 30% going by rail. As a result, in the United States, the cost of taking soybeans from the farm to the port represents around 15% of the value of the product exported to China, while, in Brazil, this same movement represents 50% of the value of soybeans exported to China. the Chinese.
It is no wonder that traders are willing to invest in a new railroad that connects the main soybean and corn production zone for export from Brazil to the ports in the North region. It is no longer possible for products with low added value and high volume to continue traveling more than 1.000 km across Brazil, on precarious roads, until they reach their destination. This is just one case, among many, of distortions that we find every day on the country's roads and that could be resolved with incentives for more suitable modes, such as cabotage, waterway and rail.
Reference:
Alexandre Lobo
https://ilos.com.brGraduated in Civil Engineering from the Federal University of Rio de Janeiro (UFRJ) and in Social Communication from Faculdades Integradas Hélio Alonso (FACHA). Expertise in several projects with emphasis on market analysis for companies such as Unilever, Intertank, Invepar, Aqces, Inter-American Development Bank and World Bank.
