Freight rates up in Brazil due to large crop and lack of trucks

Brazil’s transportation logistics and grain storage capacity have not kept pace with the increased agricultural production in recent years which has put upward pressure on freight rates. In other words, the grain production has increased faster than the number of trucks available to transport the grain or the number of silos needed to store the grain. In Brazil approximately 61.1% of the crops moves by truck, 20.7% by rail and 13.6% by barge according to the National Transport Confederation (CNT). Unfortunately, truck transportation is the most expensive way to transport grain in Brazil and much of the grain is produced long distances from the major ports. For example, the distance from the city of Sorriso in central Mato Grosso to the Port of Paranagua in southeastern Brazil is approximately 2,209 kilometers (1,370 miles). This is equivalent to the distance from Des Moines, Iowa to Orlando, Florida (1,345 miles) and most of it is on 2-lane highways that are toll roads. The cost ...