Hidrovias do Brasil signs partnership with Rumo for fertilizer logistics in Santos

Hidrovias do Brasil and Rumo celebrate the beginning of a partnership in the field of fertilizer logistics in Santos. Joining forces to meet the growing demand in the Brazilian market, estimated at US$35.78 billion in 2024 and projected to reach US$49.68 billion by 2030, according to research conducted by Mordor Intelligence, the companies seek to overcome logistical, tax, and technological challenges.

The operation will be based on an innovative concept devised by Hidrovias do Brasil, optimizing rail freight with logistical efficiency. This fertilizer transportation operation will play a pioneer part in the right bank of the Port of Santos, integrating the STS20 port terminal, operated by Hidrovias do Brasil, with rail transportation. Overall, an approximate annual volume of 500 thousand tons of fertilizers is expected, with an average of 20 wagons per day.

Currently responsible for about 8% of global fertilizer consumption, Brazil stands out as the fourth largest consumer globally, surpassed only by China, India, and the United States, according to data from the Ministry of Agriculture and Livestock. The exponential growth of national demand, surpassing supply, has been met by imports.

In addition to meeting the needs of existing customers, the new fertilizer logistics corridor passing the STS20 terminal promises to diversify Hidrovias do Brasil’s operations in Santos, generating new job opportunities and contributing to the development of the local economy.

See below which ports in Brazil retained the largest share of fertilizer imports in 2023, according to the DataLiner maritime data service.

Top Fertilizer Import Ports in Brazil | 2023 | WTMT

Source: DataLiner (click here to request a demo)

The strategic relationship between Santos and Rumo’s railway expansion

The Port of Santos is crucial to Rumo’s railway expansion plans. Both the construction of the Mato Grosso State Railway and investments in increasing capacity and operational efficiency of the railway in the São Paulo port focus on delivering excellence for the grain flow and fertilizer supply for agribusiness in the Midwest. For this reason, Rumo has also invested – and continues to invest – in modernizations in Malha Paulista and Santos to handle increasingly larger volumes at the railway.

“The modernization efforts on the railways connecting São Paulo and the Midwest enhance the efficiency and safety of railway operations. Additionally, our partnership with Hidrovias do Brasil strengthens our commitment to serving the agricultural sector. This sector ships grains to the Port of Santos and increasingly benefits from the transportation of wagons loaded with fertilizers, which are then unloaded at our terminals in Rondonópolis and Rio Verde,” explains Fabio Henkes, Commercial Director of Rumo.

“It is worth noting that railway operations have a strong impact on the decarbonization of our transportation grid. Our estimate is that the movement of fertilizers this year, in partnership with Hidrovias do Brasil, will avoid, on average, the emission of more than 63 thousand tonnes of CO², a volume equivalent to emissions from 8,216 houses and 15,004 cars,” comments Henkes.

The transportation of fertilizers by rail addresses both domestic and international needs. “By introducing this new logistics route through the Port of Santos, we support the National Fertilizer Plan, which is the federal government’s initiative to enhance the country’s competitive edge. The plan aims to streamline the distribution process for these products. Moreover, improved logistics facilitate an uptick in agricultural output, particularly as the agricultural frontier of Mato Grosso is nearly fully utilized,” adds Henkes.

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