Brazil loses USD 750m worth of grains due to logistical bottlenecks

According to Carolina Hernandez, the executive director of VLI, Brazil experiences an annual loss of grains, such as soybeans and corn, worth USD 750 million in grains, due to logistical bottlenecks associated with export transportation.

Speaking at an event organized by the National Cereal Exporters Association (Anec) on Monday (May 29), she revealed an estimated loss of 1.53% of the output from when the cargo transitions between different modes of transportation.

Hernandez acknowledged the growth in capacity within Brazil’s railway and waterway network but emphasized that competitiveness in the export of commodities still lags behind other methods.

Citing data from the United States Department of Agriculture (USDA), she revealed that road transport accounts for 38% of soy and corn transportation in Brazil, compared to only 14% in the USA. Conversely, waterways represent 19% in Brazil and 55% in the United States.

The executive from VLI further explained that the logistical cost for each tonne transported by trucks is three times higher than those in rail transport and six times higher compared to waterways. Therefore, she believes that integration, alongside expanding the capacity of rail and waterway networks, is crucial to overcoming these bottlenecks. “Only through integration can we gain more competitiveness and enable Brazilian transportation modes to compete effectively with other countries,” she stated.

Ports

Carolina Hernandez argued Brazil needs to increase its port capacity by approximately 70 million tonnes to sustain the pace of agribusiness exports, particularly as the port of Santos is set to reach its maximum capacity in the coming years.

This calculation takes into account the current capacity, planned port improvements, and the projected demand for grain and sugar shipments. Hernandez also noted that the port of Santos currently handles 41% of the nation’s grain and sugar exports. In addition, the port’s shipping capacity now stands at 77 million usable tonnes and is expected to reach around 104 million by 2035.

Please find below the volume of grains (corn, soybeans) and sugar exported from the Port of Santos between Jan 2019 and Mar 2023. The data is from DataLiner.

Grain and sugar shipments from Santos | Jan 2019 – Mar 2023 | WTMT

Source: DataLiner (click here to request a demo)

The demand for grain and sugar shipments was at 70 million tonnes in 2022, with an expected increase to 111 million tonnes in 2030 and 121 million by 2035, exceeding the port’s capacity.

Although other ports in the country are experiencing growth, Santos is expected to remain the most significant in terms of cargo flow.

Traceability

VLI, a logistics solutions company, is exploring ways to enhance the traceability of transported goods in response to the increasing demand from international buyers.

“We have a responsibility to start developing solutions for this… We are assessing various systems,” said Hernandez.

However, she stressed that any improvements in traceability should not compromise the company’s capacity. The executive mentioned that there would be upcoming news on this topic without providing specific details.

In addition to the growing expectations of consumers who want to know the journey of their food from farm to retail, the logistics sector must also comply with a new law approved by the European Union. This law prohibits the purchase of products associated with deforestation at any stage of the supply chain, necessitating the expansion of traceability measures.

Source: Globo Rural

To read the original text, please visit: https://globorural.globo.com/especiais/caminhos-da-safra/noticia/2023/05/brasil-perde-us-750-milhoes-em-graos-devido-a-gargalo-logistico-na-exportacao.ghtml

Sharing is caring!