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How to Decrease Freight Logistics Costs in Brazil Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized TP – 39 TRANSPORT PAPERS April 2012 How to Decrease Freight Logistics Costs in Brazil Public Disclosure Authorized Public Disclosure Authorized HOW TO DECREASE FREIGHT LOGISTICS COSTS IN BRAZIL 2012 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet: www.worldbank.org This volume is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, UNITED STATES; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. To order additional copies of this publication, please send an e-mail to the Transport Help Desk [email protected] Transport publications are available on-line at http://www.worldbank.org/transport/ CONTENTS Abbreviations and Acronyms .............................................................................................................................. 9 Acknowledgments ................................................................................................................................................. 13 Executive Summary .............................................................................................................................................. 15 Introduction ............................................................................................................................................................. 28 1. Comparing Brazil with other Countries ............................................................................................. 31 2. Snapshot of Brazilian Transport System for Freight Logistics ................................................. 43 2.1. The Main Freight Transport Modes: Road, Railroads, Ports, Waterways, and Pipelines .................................................................................................................................................................................. 44 2.2. Government Investment and Government Policies in Transportation............................. 68 2.3 . Private Sector Participation, Public Private Partnerships (PPPs) and Private Sector Role ......................................................................................................................................................................... 75 2.4. Transport Modal Split in Brazil: Can It Be Changed? ................................................................. 77 2.5. Bottlenecks to Multimodal Transport in Brazil ........................................................................... 82 2.6. Environmental Issues ............................................................................................................................. 85 2.7. Section Conclusions ................................................................................................................................. 85 3. A Case Study of the Port of Santos ....................................................................................................... 87 3.1. The Port Of Santos and its Hinterland ............................................................................................. 87 3.2. Methodology ............................................................................................................................................... 89 3.3. The Logistics Costs for Exports Using The Port Of Santos ...................................................... 91 3.4. The Bottlenecks of the Port Of Santos Logistics System .......................................................... 95 3.5. Projects to Mitigate the Bottlenecks and Reduce the Total Logistics Cost of the Port of Santos..................................................................................................................................................................... 98 3.6. Estimating the Impacts Of Improving the Logistics System ................................................ 101 3.7. Conclusions .............................................................................................................................................. 103 4. Global Trends in Logistics and Brazil’s State of Preparedness ............................................. 105 4.1. Best Practice Example: Australia Freight Logistics Sector ................................................... 106 5. Obstacles and Proposed Solutions According to Users ............................................................ 109 5.1. User Associations’ Views on Bottlenecks and Solutions ....................................................... 109 5.2. Improvements Proposed by User Associations ........................................................................ 114 5.3. Potential Scenarios for Logistics Improvements..................................................................... 116 6. Main Findings and Options for Action ............................................................................................. 121 6.1. Main Findings .......................................................................................................................................... 121 6.2. Main Conclusions ................................................................................................................................... 123 6.3. Options for Action ................................................................................................................................ 125 Annex 1 – Development Scenarios…………………………………………………………………………….131 Annex 2 – BRICs Freight Transport Logistics System…………………………………………………139 Annex 3 – Sector Specific Survey Synthesis………………………………………………………………..151 Annex 4 – Energy and Emissions……………………………………………………………………………….165 Bibliography……………………………………………………………………………………………………………169 LIST OF FIGURES Figure 1: Export & Import as a proportion of GDP (%) 2000-2005 ................................................. 29 Figure 2: Logistics Performance Index 2010: Brazil ............................................................................... 32 Figure 3: Brazil’s LPI within Upper Middle Income Country Group ................................................. 33 Figure 4: LPI Cross Country Comparison .................................................................................................... 36 Figure 5: Logistics Cost as percentage of GDP ........................................................................................... 41 Figure 6: Main Transport Axes of Brazil ...................................................................................................... 43 Figure 7: Highways in Brazil ............................................................................................................................. 45 Figure 8: Evolution of Highway Conditions CNT ...................................................................................... 46 Figure 9: Road Conditions of Federal Highway Network ..................................................................... 47 Figure 10: The Railroad Network ................................................................................................................... 48 Figure 11: Railway Investment Under Private Concession (Millions R$) ...................................... 49 Figure 12: Characteristics of Rail Transport Concessions (Railways Production in Billions TKU) ............................................................................................................................................................................ 49 Figure 13: Railway Traffic – Transported Volume (Millions TU) ...................................................... 50 Figure 14: Main Ports in Brazil ........................................................................................................................ 55 Figure 15: Inland Waterways ........................................................................................................................... 62 Figure 16: Transpetro Pipelines ...................................................................................................................... 64 Figure 17: Ethanol production plants ..........................................................................................................
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