When Marcondes Mendonca hauls corn from Brazil’s farm belt to port in the distant south, the young trucker prays for protection from gaping potholes and dangerous drivers, and dreads the squalid toilets on the seven-day journey ahead.
He also braces for other hassles: traffic bottlenecks, backlogs at port and stifling bureaucracy that increasingly slow goods and services across Latin America’s largest country.
Overwhelmed infrastructure is one of the biggest challenges facing Brazil, the world’s sixth-biggest economy and a global breadbasket that could next year displace the United States as the world’s top soybean producer.
Transporters estimate road haulage rates will rise about 30 per cent once the grains crop is harvested, with a shortage of drivers and new legislation that will keep trucks off the road for longer by requiring minimum rest periods for drivers.
To see the problems up close, a Reuters reporter and photographer hitched a ride with Mr. Mendonca on a recent journey. A 27-year-old father of two and fan of Brazilian country music, he hauls freight for a truckers’ collective and doubles as an instructor for aspiring drivers.
“May God protect us,” he said, above a hiss of the air brakes. Our 1,600-kilometre stretch of his 2,100-kilometre journey took us over broken asphalt, past points of deadly smashes, and on a nightly search for a rest stop with space for a last truck.
The trip, from the western farm state of Mato Grosso, across Brazil’s central savannah and southeast to the Atlantic port of Santos, highlighted rigours of the road familiar to truckers anywhere – long hours, loneliness and bad meals.
But it also made clear how Brazil’s ambition of supplying more of the world’s food is being hampered by inefficiency.
The cost of Mr. Mendonca’s haul amounted to nearly 40 per cent of what the 37 tonnes of corn sold for in Santos. Transport across a similar distance in the United States, mostly by barge, amounts to only 10 per cent of the price of U.S. corn at port.
Goods can also take three times as long to move a given distance as they do in China, a country that has used its run of economic success to invest heavily in roads, rail and ports.
“Logistics are jammed up,” says Glauber Silveira, head of Mato Grosso’s association of soy growers, who lose a quarter of their revenue to transport. “The buyer is losing out and the producer is losing out.”
With ample land, plentiful water, and high-tech farms cultivating its vast interior, Brazil is now the world’s biggest producer of sugar, coffee and citrus, the leading exporter of poultry and beef and on the verge of becoming the top soybean grower.
But the low-cost advantage that Brazil once enjoyed is succumbing to rising transport costs. The jaunt from farm to port in Brazil already costs more than twice the sea freight fees to China, and that ratio is about to climb sharply as wages rise and the laws on rest periods for drivers take effect.
The rising costs are forcing commodities traders to bid higher for Brazilian soy just to make sure growers keep planting. If prices approach costs, “it will seriously disincentivize Brazilian production,” said Kona Haque, an analyst at Macquarie Bank.
President Dilma Rousseff recently unveiled plans to lure $66-billion (U.S.) in private investment for roads, rail and other facilities. Deficient infrastructure is not only raising costs, it is prompting fears Brazil won’t be ready to host the 2014 World Cup soccer tournament and the 2016 Olympics, two events meant to showcase the country’s ascent.
The cabin of Mr. Mendonca’s Scania truck affords ample views of the chasm between Brazil’s first-world ambitions and the much humbler reality on the ground.
Reuters joined his journey on a Monday afternoon in Rondonopolis, a dusty logistics hub in southern Mato Grosso. By then, he had already driven three days north and back to load his two tarp-covered trailers now brimming with corn.
From there, we headed south. Rosary beads dangled from the windscreen, swinging with each bounce of the cabin.Report Typo/Error