Market Trends of brazil road freight transport Industry
In 2022, Brazil secured USD 47.27 billion in logistics investment and expanded privatization efforts to bridge infrastructure gap
- Brazil's transportation sector encompasses cargo and passenger rail, logistical infrastructure, highways, ports, public transportation, urban mobility, and intelligent transportation systems. The reliance on trucks for cargo transportation makes logistics more costly in Brazil, with approximately 12% of the country's GDP allocated to logistics expenses, a rate 4% higher than that in the United States. This inefficiency can be attributed to the insufficient transportation infrastructure in place.
- In 2022, the Government of Brazil (GoB) pursued an extensive privatization effort through a pipeline of concession auctions and regulatory reforms aimed at attracting financing to help narrow Latin America's most significant infrastructure funding gap. The federal government was expected to have secured nearly BRL 250 billion (USD 47.27 billion) in logistics investment by the end of 2022. The rapid growth in occupancy rates of available logistics warehouses, primarily due to increased online shopping during the worst part of the pandemic, continued in 2021.
- The Brazilian Government's significant privatization efforts involve concession auctions and regulatory changes to attract financing for addressing Latin America's largest infrastructure funding gap. The Ministry of Infrastructure (MInfra) conducted virtual roadshows to present concession prospects in railways, airports, highways, and ports to foreign audiences. In 2022, government investment of BRL 5.28 billion (equivalent to USD 998.39 million) was allocated to three blocks: Rio de Janeiro - Minas Gerais (7 airports), North Two (7 airports), and Sao Paulo - Mato Grosso do Sul (7 airports).
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Due to an abrupt increase in global oil prices, the average gasoline prices increased by 16.3% in Brazil
- With increased international prices, an oil producer and refiner Petrobras-based company raised wholesale diesel prices by 24.9%, gasoline prices by 18.8%, and LPG prices by 16.1% in 2022. The primary fuel used to produce food in Brazil is liquefied petroleum gas, which is directly correlated with oil barrel prices.
- Due to the increase in oil prices in 2021, gasoline and diesel costs rose throughout Brazil. According to official statistics, fuel costs in Brazil climbed by more than 33% in the same year, resulting in more than 12% annual inflation. Residential gas prices increased by an average of 35%. Under the new law (n. 190/2022), the ICMS manufacturing tax is computed using a fixed number rather than a percentage of the pump price. In communities without access to conventional natural gas distribution networks, the ICMS contributes around 14% of the cost of a liter of diesel or a 13-kilogram LPG tank at the current pump price. The ICMS computation for biodiesel, diesel, gasoline, hydrous ethanol, and LPG would be adjusted. At the end of 2022, the Brazilian government was also expected to reduce or eliminate federal fuel taxes on biodiesel, diesel, and LPG for domestic production and imports.
- The Brazilian state oil company Petrobras approved a new fuel pricing policy for gasoline and diesel in May 2023 that sharply lowers costs by 13%. In August 2023, due to an abrupt increase in global oil prices, Petrobras planned to hike average gasoline prices by 16.3% to BRL 2.93 (USD 0.589) per liter, while diesel prices would be raised by an average of 25.8% to BRL 3.80 (USD 0.718).
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Brazil strives toward decarbonization of heavy industries in line with the Industrial Deep Decarbonization Initiative
- Mercado Libre was the most visited e-commerce website in Brazil in 2022, followed by Americanas.com
- Brazil reached 51st place in 2023, fueled by investments worth USD 49.6 billion in railways
- Brazil intends to be the fifth largest crude oil exporter by 2030, led by investments in oil output growth
- The rising fuel costs of diesel resulted from global supply challenges, impacting the overall trucking operational costs
- Registrations of new trucks in Brazil accounted for approximately 126.6 thousand units in 2022, down by 2% from 2021
- Road freight rates were significantly impacted in Brazil due to factors like upgradation of environmental standards
- Brazil's PPI accelerated largely due to increase in petroleum prices, and CPI increased due to rise in tourism
- Oil and gas, mining and quarrying, along with the agriculture sector, is the fastest-growing industries contributing to Brazil's GDP
- The manufacturing industry's contribution to GDP rose by 21% YoY in 2022, led by the automobile subsector
- Brazil is in need of more government investments to boost road length, conditions, and road infrastructure
- Brazil strives toward a reduction in fertilizer imports to 45% by 2050 under the National Fertilizer Plan
- Sales of heavy truck sales have been growing in the country since 2021, overcoming the impact of the COVID-19 pandemic on the economy
- Brazil invested USD 1.12 billion in upgrading and improving approximately 470 km of state highways leading to growth in road tonnage
- Investments in road and sea freight resources and facilities are expected to drive growth
