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April 20, 2018

More Cargo now moves by Barge than by Rail in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazil is slowly making progress on increasing the amount of grain and cargo moved by barge within the country. Almost all the increased barge traffic has been to ports in northern Brazil. The ports in Brazil are divided into two groups, the older and more traditional "Southern Arc" of ports and the newer "Northern Arc" of ports.

The Southern Arc includes the two largest ports in Brazil which are the Port of Santos in the state of Sao Paulo and the Port of Paranagua in the state of Parana. At these southern ports, the grain arrives both by truck and by rail.

The Northern Arc includes ports on the Amazon River and along the northern Atlantic Coast of Brazil. At these ports, some of the grain arrives by truck and rail, but increasingly more of the grain arrives by barge.

The southern ports still handle the most cargo by far, but the northern ports are gaining in volume. According to the president of the Soybean and Corn Producers Association of Mato Grosso (Aprosoja), during the first 10 months of 2017, there were 23.9 million tons moved through the northern ports compared to 74 million tons moved through the southern ports. It is estimated that by the year 2030, the two groups of ports will be equal in volume.

According to an article published by So Noticias, in order to keep up with the increasing demand for barge traffic, the Merchant Marine Fund (FMM) announced that they financed the construction of 63 barges in 2017, which surpassed the average of 50 barges per year they have financed over the past five years. Nearly all of those barges will be employed in the northern Brazil.

In fact, the volume of cargo moved by barge in Brazil has now surpassed the volume moved by rail. Of all the cargo moved in Brazil in 2017, 65% was transported by truck, 16% was transported via waterways, and 15% was transported by rail. The tonnage moved by barge in 2017 totaled 101.5 million tons or an increase of 20% compared to 2016.

There are three new main barging routs in Brazil and they are all on southern tributaries to the Amazon River. In the western Amazon region, barges move down the Madeira River from the Port of Porto Velho to the Port of Itacoatiara on the Amazon River. In the central Amazon region, barges move downstream on the Tapajos River from the Port of Itaituba to the Port of Santarem and other ports near the mouth of the Amazon River. In the eastern Amazon region, grain is barged downstream on the Araguaia River to ports near Belem at the mouth of the Amazon River

Shipping grain out of the northern ports is more economical and it saves approximately 6 days in transportation time compared to the traditional southern ports. Each barge has a capacity of approximately 3,000 tons or the equivalent of 85 trucks each carrying 35 tons of grain. The energy needed to move grain by truck is approximately 4 times higher than by barge. Therefore, each barge saves approximately 1,497 liters of fuel per ton per thousand kilometers.

FMM is the major financier of barge construction in Brazil with investments totaling R$ 2.3 billion in 2017.