The potential of cabotage in Brazil

Yesterday, I commented here the low use of cabotage in Brazil and the problems with the strong presence of road transport, mainly in long-distance transport. Well, today, the newspaper Valor Econômico brings new hope to those who follow the theme. Despite the drop in national production, cabotage companies have been recording growth in the volume of cargo handled. For this year, Aliança believes in a 5% increase in cabotage, while Log-In celebrates a growth of almost 13% from January to September.

Naturally, in periods of crisis, companies seek to reduce costs to try to guarantee their results, and logistical costs have been one of the main targets of executives due to their strong participation in companies' net revenue (around 8%). Looking more closely, executives tend to concentrate their efforts on the transport activity, which accounts for more than half of the logistics costs of Brazilian companies.

And this is where modes such as cabotage and rail stand out, as their costs are up to six times lower than those of road transport, especially in long journeys (on average, over 500 km on rail and 1.800 km on cabotage). However, as mentioned in the previous post, the precariousness of the transport infrastructure in Brazil, the lack of connection between modes and the excess of bureaucracy in the country still hinder the advancement of these alternatives, despite the growing interest of cargo shippers.

Finally, I will leave an interesting number: recently, we heard executives from the largest companies in Brazil and 6 out of 10 said they intended to increase the volume of cargo handled by cabotage by 2016, with an average increase of 45% in this volume. Cabotage has the potential to grow in Brazil, doesn't it?

References:

Panorama ILOS “Brazilian Ports – User Assessment and Performance Analysis – 2015”

Valor Econômico Newspaper - 15/12/2015