Insufficient logistic takes profit from the sector

“What we gain in the fields we give back to ports and terminals”, stated Cosan’s Council president, Rubens Ometto, in his lecture on logistics in the country, at Summit Agronegócio Brasil 2015. Ometto and other participants of the panel “Logistics Challenges” said that insufficiencies in this segment are the major obstacles for the Brazilian agribusiness development. “We have a railway network far below its potential. The main priority must be to terminate investments already started so they can work properly and, them, to begin to greenfields.”

To Ometto, one of the ways to boost the sector is to decrease governmental intervention. “We cannot have a too participative government in this business. I believe in free initiative. When you have such scenario, some problems are already solved, there is no corruption, each entrepreneur is responsible for things they do.”

Prompt solution. President director of JSL Logística, Fernando Antônio Simões, also highlighted the role of the private initiative sector to export solutions that improve production flow. “The government has responsibilities, but we do not wait on their contributions (to move). We will improve what already exists to obtain prompt solutions, and not long term ones.”

Simões mentioned companies that took a step to solve logistic bottleneck, such as Fibria, from the paper and pulp sector, which built marine terminals in the south of Bahia to transport products to Espírito Santo and Veracel, that actuates in the same segment and built a port 60 km from their new plant in Porto Seguro (Bahia), removing 75 trucks/day from BR-101 highway. “There is no logistic bottleneck that holds the country’s investments and private initiative sector innovation.”

Simões also mentioned data from ANTT. Numbers indicate that, of 30 km of railway network, 6.000 km operate with inferior density of one train per day. Vehicles average speed in Brazil is 25 km/h, while in the USA 80 km/h. “Before projects that demanded billionaire contributions and long terms, the priority is to increase current railway network.”

Like other speakers, Cosan’s president Marcos Lutz, argued that the private initiative sector must act to improve production’s flow. In the same subject, he mentioned that Rumo ALL, company of the group, intends to invest BRL 7.4 billion until 2019. The amount refers to the fleet update of 5 cars and 200 locomotives, besides the renovation of more than 3 km of permanent tracks and new yards construction.

Modals. Lutz also stated the need to diversify Brazilian modals to improve national agribusiness logistics, with emphasis in railways participation increase and highlighted: “Agribusiness will clearly be one of the major forces for the Brazilian economy in the next years and one of the most important pillars to get rid of the crisis.” Cosan’s president estimated that logistic bottleneck wastes in Brazil equal 5% of national GDP. According to him, the average cost of grains transportation in the country is four times more them the competition, such as Argentina and the USA. For example, the transportation of 1 tons of grains from Lucas do Rio Verde (Mato Grosso) to Santos (São Paulo) on highway costs BRL 310. “Basically expenses with tires, dieses and trucks (depreciation) do not pay Mato Grosso road’s bill that are destroyed.” On the other hand, if the product was transported by truck to Rondonópolis (Mato Grosso) and them by railway to the port, it would cost BRL 270 per ton.

Mato Grosso. Governmental sector must expand partnership with the private initiative sector, highlighted the vice governor from Mato Gross, Carlos Fávaro (PSD-MT) in his speech. According to him, at his state there are currently five concessions in force with local entrepreneurs in order to improve roads that flow agricultural and livestock production – Mato Grosso is the major soy producer in the country. One alternative, pointed Fávaro, former president of Aprosoja-MT (Association of Soy and Corn Producers of the State), is to rely on the support of the producers to improve actuation region’s logistics. “We cannot wait for money from Brasília or China to improve Mato Grosso”, he said, adding that, if roads’ paving levels in the country is 25%, in MT this index drops to only 10%. “We have an enormous challenge to improve highways in Mato Grosso.”