BR do Mar cabotage bill estimated to reduce freight rates by 15%

The Planning and Logistics Company (EPL) estimates that the BR do Mar cabotage bill, proposed by the Federal Government, can reduce freight rates by 15%.  Changes to the bill were approved by the Chamber of Deputies in December 2020. The information was released in a technical article published by the National Observatory of Transport and Logistics (ONTL) on February 22nd.

The EPL document on BR do Mar also shows that an increase of 60% in the volume of containers transported by cabotage can generate a reduction of more than 530,000 tons of CO2 per year when compared to road transport. These values ​​were calculated using tools developed by EPL.

To calculate the cost reduction estimate, parameters such as fuel price, wages, number of vessels, volume transported, among others, were considered. In addition, databases of freights practiced were obtained through market monitoring carried out by the National Observatory of Transport and Logistics.

To estimate the emission of greenhouse gases, EPL used a methodology developed in partnership with the Energy and Environment Institute that is available on the state-owned company website. (http://www.epl.gov.br/greenbonds).

The BR do Mar project is an initiative of the Ministry of Infrastructure that aims to encourage cabotage in the country, by increasing supply, encouraging competition, reducing costs involved, expanding routes, and making the Brazilian transport matrix more efficient.  With high load capacity and low risk of theft and damage, cabotage allows for economies of scale that reduce unit costs. Estimates calculated by ONTL show that this mode costs on average 60% less than the road mode and 40% less than the rail mode.  In 2021, the sector may grow at least 10% compared to last year, following a trend already seen in 2020.

Finally, the EPL study shows that because it does not directly connect producers and consumers and its advantage is verified on long-distance routes, cabotage does not compete directly with road transport.

To read the document, access: https://ontl.epl.gov.br/publicacoes/artigos-tecnicos/

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