ALL and MRS compete for containers

The port of Santos receives daily approximately 10 thousand trucks, responsible for 85% of the 80 million tons of freight moved annually. The highest concentration is on the road transport of containers, cutting the Serra do Mar. Today, there are 30 million tonnes, which should reach 84 million in fifteen years, according to projection of the port.

For years, the concentration on the road system has been concerning the authorities of the port sector, but now it starts to appear as an opportunity. The two biggest rail operators in the country, ALL – America Latina Logistica and MRS Logística, are considering millionaire projects to explore the container transportation market up to Santos. Depending on some settings – like the outcome of the Ferroanel project, bordering the greater Sao Paulo – the two rail operators can enter the first time in direct competition for the same freight.

The bets vary, but it is estimated that the proportion of the containers carried by rail to Santos can reach 30% or 40% in the coming years. In 2024, this would mean up to 33 million tonnes – a promising market, given that today is estimated at 1.1 million tonnes of container freight carried by rail.

According to the ALL CEO, Bernardo Hees, 40% of the containers will be transported to Santos by rail in just five years – not necessarily all by his railroad. For now, ALL is better placed to compete: the network to carry freight in the state of Sao Paulo to Santos is almost ready and the company needs only to do some tweaking to reduce costs and improve facillties to ship the freight.

The company estimates that US$ 348 million will be needed to build the intermodal terminals and make a revamp in the tunnels down to Santos for double stack cars, with two tiers of containers.

On the other hand, MRS RR depends on what the Ferroanel (Railring) project might become to increase its activities in the business. There are currently three possible routes for the Ferroanel, and each of them, according to the company, will target totally different shippers through the state of Sao Paulo. The course that interests MRS, and may enable their progress in containers, is called “segregation”. According to the project, the track that the company shares with CPTM – Sao Paulo’s commuter trains company – cutting through the city, would receive one more line to accommodate the freight trains, which now jostle for space in the saturated passenger network.

With this sharing, the capacity of MRS in the city’s network would increase from the current 15 million tons per year to 45 million tons. The main investment would be a major container terminal in 100 thousand square feet in the Mooca neighborhood, east of Sao Paulo. Another expense, estimated at US$ 116 million, is the reform of the cog railroad that goes down the Serra do Mar,  today served by 1976 Hitachi locomotives and saturated by up to 8 million tons/year of iron ore. The reform would treble the capacity of that rail section.

Beyond disputing with containers trucks that arrive in Sao Paulo, MRS has plans to install terminals in São Paulo state, in Jundiai and Campinas. In this case, the company woul again compete directly with the ALL project, with the advantage of a shorter route. The Santos-Campinas path by truck has 170 km. By ALL’s network, the route goes up to 290 km. But with the segregation, MRS estimates that its trains would make the journey in 190 km.