HomePublicationsInsightsAlternative routes help to dispose of crops

Alternative routes help to dispose of crops

Deficient logistics is one of the biggest bottlenecks in the productive sector that operates in the North region, but some alternative routes have been created in recent years, opening up new possibilities for companies in the agricultural and industrial sector to sell their production, either abroad or to South and Southeast markets. This movement contributes to the reduction of regional logistics costs.

Recently, Bunge, an agribusiness giant, inaugurated a new export route, with the opening of port terminals in the Pará cities of Miritituba and Barcarena, which makes it possible to use the Tapajós-Amazonas waterway. Navigation along the river will eliminate more than three thousand truck trips per month, which used to take grain from the Midwest to ports in the South and Southeast.

The project became feasible after the announcement that the BR-163 would leave the drawing board. In the first year of operation, the complex will have the capacity to transport up to 2,5 million tons of grain. Considering that the BR-163 is fully paved, a reduction of more than 20% in the total travel time is expected. There is potential to double the volume and reach around four million tons.

Another global agribusiness giant, ADM also recently announced that it was officially authorized to use the Ponta da Montanha port terminal, in the Barcarena region, 20 kilometers from Belém, in Pará. The terminal will serve to streamline the flow of grains (mainly soybeans and corn) from the company. The facility has the capacity to handle 1,5 million tons in this first phase of operations, but the volume could reach 6 million tons per harvest in the second phase, scheduled for 2016.

“Other companies, notably the agricultural sector, are investing in terminals in Pará to increase multimodality options, with emphasis on waterways. With these options, companies gain a faster way to sell the grain crop in the Midwest. It is more competitive to bring it from the North than from Santos or Paranaguá”, highlights Hito Braga, professor of naval engineering at the Federal University of Pará.

With multimodality, costs drop and speed is gained. But this scenario will bring greater pressure on the outflow capacity of the Arco Norte ports. “There will certainly be pressure, but there are many projects for private terminals that could get off the ground”, says Braga. Another option is cabotage navigation, which has grown at a double-digit annual pace in the last five years in Brazil. “The greatest potential lies in the conversion of road freight to cabotage”, observes Vital Jorge Lopes, president of Log-In.

In May, the company inaugurated a new operation for cargo produced in the industrial center of Manaus, which will allow ships to serve the markets of São Paulo and region in the same travel time as road transport – around ten days. Before, transport between Manaus and Santos took 14 days. “We have space to dispose of some cargoes through cabotage, with a freight that can be 25% to 30% cheaper”, reports Vital Jorge Lopes, president of the company. The greatest attraction potential of this new express route is in the home appliances and electronics industry in the industrial center of Manaus. The service will also connect the ports of Fortaleza, Suape and Salvador, with an eye on the installation of a petrochemical center in the Northeast and the opening of automaker factories in the region.

The new routes may slightly change the regional panorama. Logistics costs in the region today are among the highest in the country. Research by Professor Augusto César Barreto Rocha, from the Federal University of Amazonas, points out that today it is more expensive to transport cargo from Manaus to Santos than from Shanghai, China, to the same destination. The difference is more than 63% when comparing the transport of a container between the two routes.

“What leads to these costs is the sum of the Custo-Brasil and the Custo-Amazônia, associated with low competition. Today there is a consolidation of transport companies in Brazil, where fewer and fewer companies operate in the sector. For the professor, one of the solutions to reduce logistical costs is to facilitate the installation of new Private Use Terminals and a public port in Manaus, increase the draft in some points, allowing the operation of larger ships, in addition to developing new technologies for signaling, dispensing with the use of pilots in the Amazon region.

The North region has the greatest hydroelectric potential in the country, with about two thirds of the availability of existing resources, but the construction of the plants has not been carried out in parallel with the installation of locks, which would allow navigation on the rivers after the dams are erected. The lock would cost less than 5% of the value of the hydroelectric plant. “The locks should have been built along with the hydroelectric plants. Today it seems like an increasingly distant dream.

Another obstacle is the precariousness of the roads. The average increase in operating costs due to poor pavement conditions is 25% in Brazil. The South and Southeast regions have the best asphalt conditions, with operating costs of 19% and 21%, respectively. The North has the worst: 39,5%. The number is a direct result of road conditions in the region: Pará and Acre lead the ranking among the states with the worst roads in the country.

Source: Valor Econômico

By: Roberto Rockmann

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