With post about the possibility of reducing transport costs with the use of cabotage for long distances, we received some questions as to whether the same would happen with rail transport. Evidently yes! Even considering the period from 2003 to 2013, the average growth in the volume handled by railroads in Brazil was 5% per year, higher than the growth of the Brazilian GDP, which indicates the enormous potential for growth of this modal.
As a large producer of basic inputs and with continental dimensions, rail transport should have a much greater participation in the Brazilian transport matrix. Although there are other problems, the truth is that the main obstacle to the growth of railroads' share in the total volume of cargo handled in the country is the unavailability of the network.
Figure 1 compares the length and mesh density of Brazilian railroads with other BRIC countries and the US, clearly illustrating our limitations.
Figure 1 - Comparison between the rail networks of different countries
Source: Panorama ILOS – Logistic Operators and Railways 2015
ILOS research, carried out in 2015, on the performance of Logistic Operators and Railways in Brazil, leaves no doubt when indicating that the seven main reasons pointed out by executives for not using the railways are directly, or indirectly, related to the lack of infrastructure, as illustrated in Figure 2.
Figure 2 - Reasons for NOT using railroads
Source: Panorama ILOS – Logistic Operators and Railways 2015
Thus, it is clear that in order to compete internationally, we need to move products through the most appropriate modal, considering the type of cargo and the distance. Unfortunately, it seems that the situation will not change in the coming years, as indicated by the interesting report published today by O Globo newspaper on the impact of the crisis on railway works.
Reference
<https://ilos.com.br/web/analise-de-mercado/relatorios-de-pesquisa/operadores-logisticos-e-ferrovias/>
Leonardo Julianelli
https://ilos.com.brExecutive Partner of ILOS. Graduated in Production Engineering from EE/UFRJ, Master in Business Administration from COPPEAD/UFRJ with extension at EM Lyon, France, and PhD in Production Engineering from COPPE/UFRJ. He has several articles published in periodicals and specialized magazines, being one of the authors of the book: “Sales Forecast: Organizational Processes & Qualitative and Quantitative Methods”. His research areas are: Demand Planning, Customer Service in the Logistics Process and Operations Planning. He worked for 8 years at CEL-COPPEAD / UFRJ, helping to organize the Logistics Teaching area. In consultancy, he carried out several projects in the logistics area, such as Diagnosis and Master Plan, Sales Forecast, Inventory Management, Demand Planning and Training Plan in companies such as Abbott, Braskem, Nitriflex, Petrobras, Promon IP, Vale, Natura, Jequití, among others. As a professor, he taught classes at companies such as Coca-Cola, Souza Cruz, ThyssenKrupp, Votorantim, Carrefour, Petrobras, Vale, Via Varejo, Furukawa, Monsanto, Natura, Ambev, BR Distribuidora, ABM, International Paper, Pepsico, Boehringer, Metrô Rio , Novelis, Sony, GVT, SBF, Silimed, Bettanin, Caramuru, CSN, Libra, Schlumberger, Schneider, FCA, Boticário, Usiminas, Bayer, ESG, Kimberly Clark and Transpetro, among others.
