ALL – América Latina Logística, a logistics company which operates the Brazil South Region railroad concession, is preparing for this year’s harvest by investing in a reinforcement of its fleet. Last year, the company operated an average of 1,600 freight cars and is year the expectation is to increase this number to 2,400 cars to satisfy the agricultural grain market.
Each car has the capacity to transport 50 tons and the cost is estimated at about R$ 250,000. Also to be incorporated will be 20 locomotives for service in the state of Rio Grande do Sul, with each engine costing about R$ 1 million.
Leandro Mayer, manager of grains in the south for ALL, expects greater agricultural cargo movement in the south via railroads this year compared to 2006. The expectation is for an increase of about 20%, which means total transportation movement of around 5 million tons of grains, of which 70% should be soybeans and 15% corn.
The main agricultural products hauled by ALL are: soybeans, wheat, corn, soy meal and rice. Corn and soybeans are exported while wheat is hauled to Rio Grande and then shipped by coastal vessels to the Northeast of Brazil. Rice leaves Rio Grande do Sul and supplies processing plants in the São Paulo hinterland. ALL also participates in the flow of Paraguayan freight to the port of Rio Grande. From Paraguay comes about 30,000 tons of grains per month for Rio Grande, entering the state via Uruguaiana. The company expects its agricultural products market share at the market share of the port of Rio Grande to rise.
Currently, its annual share is approximately 40% and the expectation is that in 2007 this will rise to 45%.
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Mayer argues that a longstanding demand of the railroad industry for the construction of a rail stretch linking Porto Alegre to Pelotas to make it possible to get freight delivered quicker between Rio Grande and the metropolitan region of the capital is not a priority for the grain shippers. He noted that most of the products shipped by rail in the region are manufactured items.
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