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PORT DEVELOPMENTS IN AN EMERGING COUNTRY THE CASE STUDY OF BRAZIL São Paulo, May 2014 ANDRE DE FAZIO, MSc
PORT DEVELOPMENTS INAN EMERGING COUNTRY
THE CASE STUDY OFBRAZIL
São Paulo, May 2014
ANDRE DE FAZIO, MSc
ANDRE DE FAZIO, MSC
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Academic Record:MSc - Maritime Economics and Logistics (MEL)– Erasmus Univ. Rotterdam (EUR)– HollandPost Graduate in Business Administration – Getulio Vargas Foundation - FGV/SP – BrazilB.S. in Civil Engineer – Catholic University– PUC Campinas
Professional:Current: EcoRodovias Group – Logistics Planning Manager – Brazil.UFSC - National Plan of Port Logistics - PNLP - Technical Head - BrazilCMA CGM GROUP / Terminal Link - Manager for Terminal Investments – BrazilCSN/ Sepetiba Tecon - Commercial Manager – BrazilP&O Nedlloyd - Engineer – The NetherlandsODEBRECHT GROUP - Civil Engineer – Brazil
Others:Speaker - PIANC / SMART RIVERS CONFERENCE– Maastricht – Holland- 2013Speaker - TOC AMERICAS - Panama – 2012Speaker - TOC AMERICAS - Panama – 2011Speaker - Maritime Economics and Logistics Decennial Conference – EUR - Rotterdam, 2010Speaker - 15th Brazilian Congress of Civil Engineers – Brazil – 2009Speaker - XXI COPINAVAL - Pan-American Congress of Naval, Maritime Transportation and Ports, 2007
Director of the Infrastructure Department of FIESP (Industry Federation of SP State)- BrazilCo-Founder and Director of the Committee of Young Entrepreneurs - CJE - FIESPMember of the Advisory Board of the Regional Council of Engineers and Architects- CREA-SP
AGENDA
- Introduction
- The Brazilian Paradox:- powerful emerging economy x lack of infrastructure
- Trade opportunity and challenges
- Brazilian Case Study
- Conclusion
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INTERNATIONAL TRADE (X7 BTW 1993-2013)Brazilian trade balance (Exports +Imports) – 1993-2013* US$ bilion FOB
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BRAZILIAN INTERNATIONALRANKING ON LOGISTICS (1/2)
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The average of 7 evaluations, with results that vary between 1 and 5Logistic Performance Index – World Bank
TARGETby 2012
LPI
SOURCE: World Bank, 2012
2010
5
4
3
2
1
Singapore LPI = 4.09Second Place
Brazil LPI = 3.2041st. place
Somalia LPI = 1.34Last Place
BrazilLPI = +/- 3.45Approx. 30th. position
In 2022 among the 10BestLPI = +/- 3.90
2007
Singapore LPI = 4.19First Place
Brazil LPI = 2.7561st. place
Afghanistan LPI = 1.21Last place
2012BrazilLPI = 3,1345st.place
Performance IndexLOGISTICS LPI
BRAZILIAN INTERNATIONAL RANKING ONLOGISTICS (2/2)
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35 3,28If all items graded at same level, Brazil
would be better ranked
BRAZILIAN PORT SYSTEM- 34 Public Ports- 129 Private Terminals
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AMAZONAS PARÁ
AMAPÁRORAIMA
RODÔNIA
MATO GROSSO
TOCANTINS
GOIÁS
MATO GROSSODO SUL
MARANHÃO
PIAUÍ
CEARÁRIO GRANDEDO NORTE
PERNAMBUCO
BAHIA
MINAS GERAIS
SÃO PAULO
PARANÁ
SANTACATARINA
RIO GRANDEDO SUL
SERGIPE
ACRE
Port of MANAUSPort of SANTARÉM
Port of BELÉMPort of VILA DO CONDE
Port of ITAQUI
Port of FORTALEZAPort of AREIA BRANCA
Port of NATALPort of CABEDELO
Port of SUAPEPort of MACEIÓ
Port of SALVADORPort of ARATU
Port of ILHÉUSPort of BARRA DO RIACHOPort of VITÓRIA
Port of RIO DE JANEIROPort of ITAGUAÍ
Port of SÃO SEBASTIÃOPort of SANTOS
Porto de PARANAGUÁPort of SÃO FRANCISCO DO SULPort of ITAJAÍ
Port of IMBITUBAPort of PORTO ALEGRE
Port of RIO GRANDE
Port of MACAPÁ
Port of RECIFE
Port of NITERÓIPort of FORNO
Port of ANTONINA
Port of ANGRA DOS REIS
Port of PELOTAS
Port of PECÉM
VOLUME HANDLED AT BRAZILIAN PORTS(X 3 IN 20 YEARS)
Million tons
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BRAZILIAN PORTS SYSTEM - CONTAINER
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North6.5%
Northeast12%
Southeast50.5%
South30.9%
1 IBGE2 Casa Civil (Office of the Chief of Staff)3 ANTAQ - National Water Transport Agency4 MDIC - Ministry of Developmente, Industry and Foreign Trade
Geographicaldistributionof ContainermovesBrazil
- GDP: R$ 4,1 trillion1
- Navigable coastline of 8.5thousand km2
- Investments envisaged in PAC 2(2011-2014): R$ 958,9 billion4
Port in Brazil- Responsible for more than 80% of
current trade2
- 5,0 million containers handled3 (organized publicports and private use terminals).
- 84% of containers handled by public ports3
EXPECTED INVESTMENT IN LOGISTICS
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USD 150Billions in 30 years
Source: EPL - Empresa de Planejamento Logístico
ROADS
• Expansion of the mainroads (and logisticscorridors) in Brazil.
• Privatization processes ofmain roads.
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ROADS – CONCESSION OF 9AREAS (7.500 KM)
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RAIL
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• New Legal Framework.
• End of Monopoly on RailTransportation.
• Expansion, Integration andModernization of rails.
RAIL
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WATERWAYS
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Waterways:
• Madeira• Tapajós – Teles Pires• Tocantins – Araguaia• Parnaíba• São Francisco• Tietê – Paraná• Paraguai – Paraná• Sul (Mercosul)• Amazonas - Solimões
PRIORITY– CONSTRUCTION OF27 LOCKS
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River Locks Status
Source: Ministry of Transports
EXPECTED INVESTMENT TOCONSTRUCT 27 LOCKS
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R$ 11,6 billions 1
AVG: USD 250 millionsPer lock
Source: Ministry of Transports
PORTS
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• Expand Port System Capacity.
• Clearly define the institutionalframework.
• Improve the management efficiency(performance) of Brazilian Ports.
• Improve Port acesses(road/rail/waterways).
CHALLENGES
BRAZILIAN CASE STUDY
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BANANA CHAIN
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BRAZILIAN CASE STUDYBANANA CHAIN
The most consumption fruit in the world (+2,37% a.a. in the last 8years).
Main Global Players:• Dole Food Company, Del Monte Foods, Chiquita Brands
International
Consumption ´Per capta´ (kg/hab./year):• Philipinnes 42, Brazil 30.
Productivity (ton./hectare):• Costa Rica: 53,95 (#1), Brazil: 13,55 (#9)
Freight rates (+ local taxes), for a 40´´ reefer cntr (13°C- 14°C):• Ecuador to R´dam: USD 4.500 per Cntr.• Brazil to R´dam: USD 3.400 per Cntr.
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CASE STUDYBANANA CHAIN
CASE STUDY
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BANANA CHAIN
Despite been one of world largest producer, Brazilianproduction is mainly for Internal Market.
For internal market, plantations are in SC, PR, MG andSP states. For exports, mainly Mercosul and Europe,production are in RN and SC states.
In 2013, Brazil exported +8% than previous year,reaching ~100 millions tons (1% of Global Market-share).
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CASE STUDYBANANA CHAIN
40% Farm: production, working force60% Logistics: transport, storage, handling
BRAZIL – CURRENT CHALLENGESON LOGISTICS
• Physical:
- Insufficient infrastructure capacity- Inadequate hinterland connections- Limited port draft- City-locked ports generating congestion
• Management:
- High logistics cost- Bureaucratic system- Environmental issues- High waiting time at Ports
• Reduce Logistics Costs.
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CONCLUSION
• Expand capacity of the port system
• Promote Hub and Spoke concept, linking Ports to LogisticPlatforms
• Balance Modal Split (road, rail, waterways, cabotage,pipeline)
• Improve the management efficiency (performance) ofPorts
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CLOSING REMARKS
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“Brazil is the 21st-centurypower to watch.”Finacial Times, 19 Oct. 2009
“Brasil is South America’s mostiinfluential country, an economicgiant and onde of the world’sbiggest democracies.”BBC News 5 oct. 2010
Brazil has always been considered “thecountry of the future”but that futurenever became reality...now the time ishere, a world economix power with abooming internal market as well as amajor player in the world trade market.
This is the right time to be in Brazil!
“Brazil is likely to becomethe worl’s fifith-largesteconomy, overtakingBritain and France.”The economist, 14 Nov. 2009
CLOSING REMARKS
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“Has Brazil blown it?”The economist, Sept. 2013
EUROPE – HUB N´ SPOKEDEEP SEA TERMINAL <-> LOGISTICPLATFORMS
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ECT/Rotterdam para MOERDIJK CONTAINERTERMINALS
www.europeangatewayservices.com
