HOW
BRAZIL ROAD FREIGHT MARKET EVOLVED?
Brazil transports ~ % of the cargo by
road due to its strategic location. Around ~ % of the cargo is transported by
road if materials such as iron ore and oil are excluded from the product list.
The country has structural issues such as
logistics infrastructure and cumbersome custom procedures resulting in long
queues at the seaports.
The preference for road transport has
logistical reasons, such as the possibility of splitting the cargo to be
distributed in smaller lots, more suited to the practice of just in time (JIT).
The growing health and pharmaceutical industry, e commerce and express market
are contributing the increasing share of Road
Freight in Brazil. Also, other means such as rail are concentrated in
south east part of the country. Brazil Road Freight market was evaluated to grow from USD ~
million in 2013 to USD ~ million in the year 2018 at a compounded annual growth
rate (CAGR) of ~% during the period. In 2014-2016, Brazil was hit by recession
due to the excessive public spending and bad harvest. The country was hit back
by a strike in 2018 by the truck drivers because the fuel prices rose from BRL ~
to BRL ~ per litter.
The sector is facing logistical challenges such as road
accidents and theft, damaged roads in north-eastern part of Brazil, high
logistics cost with low margins. Electronic freight payment, toll vouchers,
Minimum freight Charges based on vehicle type and distance travelled are
regulating the Road Freight in Brazil.
BRAZIL
ROAD FREIGHT MARKET SEGMENTATION
By Domestic and International Road
Freight:
The domestic shipment includes local
transportation of goods within Brazil. Almost about ~% of the cargo is
transported by road domestically in the country.
By Domestic Flow Corridors
Sau
Paulo-Rio De Janeiro is the largest contributor in terms of revenue in Road
Freight. Others include regions such as Rio de Janeiro, Mato Grosso, Rio Grande
Do Sul, Parana and many more.
By International Flow Corridors
Trade
with Argentina, Paraguay, Uruguay and other South American countries is easily
done by road due to the free trade agreements and MERCOSUR agreement with the
countries.
Brazil
trades the most with Argentina by Road.
By End Users
The
major end users of freight forwarding services in Brazil include the Food and Beverage
industry followed by rising automotive sector. Consumer retail is rising due to
e commerce and retail stores.
By Contract and Integrated:
Contract Logistics in Brazil has been
thriving with a share of ~% in overall market revenue. The companies outsource
the work to self employed truckers.
BRAZIL
ROAD FREIGHT FUTURE OUTLOOK AND PROJECTIONS
Brazil Road Freight Market is projected
to grow at a CAGR of ~% during the forecast period 2018-2023 due to
concessioning the highway development projects to private companies.
The revenue from freight forwarding
market by road is anticipated to grow from USD ~ Million in 2018 to USD ~
Million by the year ending 2023.
The key growth drivers for the market
include the rising m commerce market due to flourishing E commerce websites and
ease in payment process, rising retail stores and supermarket products for
healthier products, improvements in automotive sector and healthcare industry
that will drive the Road Freight market in future.
The International road freight is
expected to increase due to the free trade agreements with Chile, Inclusion of
Bolivia in MERCOSUR and highway developments to connect nearby countries by
road. Upcoming rail projects in the region are expected to reduce the domestic
freight movement as railways are cheaper means to transport bulk goods over
long distances. Electronic freight payments, toll vouchers and minimum freight
charges by the government will make the market more regulated.
COMPETITIVE
SCENARIO IN BRAZIL ROAD FREIGHT MARKET
The
industry is quite fragmented with more than ~ carrier companies registered
under National Register of Freight Haulers. The industry is dominated by local
domestic players including JSL S.A, Ritmo logistics, Braspress Logistics,
Nepomucena Express and many more that outsource their work to self employed
truck drivers. International players such as DHL Global forwarding, Kuehne
+Nagel and CEVA logistics also partner with local companies for their fleet and
contacts.
The
Industry is dominated by self-employed truck drivers that are either contacted by the companies directly
or connect with companies based on their ratings on aggregator type platforms
such as Truckpad and CargoX for better fares.
The Industry
is at a growth stage in terms of parameters such as technology, efficiency and
service portfolio but the logistics cost is very high with low margins in the
market.
For more information,
refer to below link:
Related Reports
Contact Us:
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.comKen Research
Ankur Gupta, Head Marketing & Communications
+91-9015378249
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