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Brazil Highways are the Country's Achilles' Heel

South American Crop Watch

Brazil's logistics headaches don't end at the ports

Published on: May 2, 2013

We all have a party story or two. One of mine is the time I lost two wheels—not just the tires, but the aluminum wheels—of a rental car when I was driving at night on Mato Grosso, Brazil, highways during harvest. Good thing I spent a couple of extra bucks for the full protection.

First one enormous semi, avoiding a huge crater, moved into my lane and forced me into a crater the size of an Olympic swimming pool. No sooner had I put on the spare with no lights in the rain that another pothole—this one probably ending up in China somewhere—bent the wheel and sent me to the shoulder permanently.

Such are Brazilian roads at harvest. I ended up hitchhiking to the next town to sleep in a dry bed while the rental guys came and took the car away.

As you may know, Brazil's grain harvest is bogged down by infrastructure bottlenecks. The administration in Brazil, faced with cancelations of boatloads of soybeans, has done what governments worldwide do when faced with an emergency--- they've formed a blue-ribbon panel to figure out what to do.

Facing waits of 30 to 40 days to load soybeans at Brazilian ports, at a cost of up to $25,000 per day, the Chinese recently opted to go to Argentina to replace some of their delayed orders from the Brazilians. Which is serious, as most of Brazil's economy turns on agriculture, whether it's soybeans, corn, sugarcane, broilers or coffee.

Appalling roads

Brazil's ports are overloaded, facing worker strikes because of privatizations. They have been dealing with lots of rainy February and March days making it impossible to load soybeans onto ships. But that's not the half of it. The other half of Brazil's logistical crisis is the roads. They're mostly, well, appalling.

And appalling means, in the end, expensive. Expensive in terms of the time it takes to go a few hundred miles; the sleepovers required per trip; in the number of repairs to tires, wheels, suspensions and so forth (not many truck drivers can just walk away from their broken-down rig and hitch to the next town, as I did with my rental car.)

But those guys, who travel almost exclusively at night in order to avoid the heavier daytime traffic, make up to $24,000 per year, according to at least one article. That's double what a city driver makes (Average Brazilian incomes are around $10,000 per year).

The thing is that, even at that low rate, the expenses add up when drivers take three hours to make those last 12 miles to the port.

The Mato Grosso Corn & Soybean Producers Association estimates Brazil loses up to $4 billion annually on corn and soy exports due to the country's poor infrastructure—both on the highways and at the ports once trucks finally get there. That's something like 13% of what was exported in 2012.

So while the story of the two lost wheels out in Mato Grosso is great for kicks at get-togethers, the Brazilians ain't laughin'.