2008-11-13 07:37:01 - Brazil Freight Transport Report Q4 2008 - a new market research report on http://www.companiesandmarkets.com

www.companiesandmarkets.com/Summary-Market-Report/Brazil-Freight ..

On June 26 Brazil’s Association of Independent Truckers suspended a two-day old national strike for lack of support, saying that only around 150,000 truck drivers - out of an estimated 1mn in the country - had supported the action. Association President José da Fonseca warned however that the strike could be resumed at any moment. Reports suggested that the movement of goods at Brazil’s two main ports, Paranaguá and Santos, had not been disrupted by the stoppage. The strike had been called for two main reasons: to protest at high fuel prices on the one hand (diesel prices were increased by 15% in May), and to make a show of force against a plan to restrict truck traffic through Sao

 

 

Paulo on the other. The local authorities have said that they would block truck movements through the city except at night and early morning as part of a plan intended to reduce the city’s heavy traffic congestion. Because a large proportion of Brazilian freight is moved by road - and Sao Paulo is a key hub connecting the north and the south of the country as well as providing access to the port of Santos - there were fears that the traffic ban could seriously disrupt freight movements and increase costs. In our latest Brazil Freight Transport Report, BMI has set its forecast for annual average growth in road haulage over the 2008-2012 period at 6.6%.



Various factors support this prediction. Fundamentally, we believe the Brazilian economy is going through a period of solid growth, and road haulage is a key transport mode. As a result of global economic conditions we now expect some moderation in the pace of growth, but the fundamentals will still point to expansion. Annual Brazilian GDP growth will average 4.5% in the 2008-2012 period (up from 3.8% in the preceding five-year period). This will underpin general trucking demand.



The overall freight picture will be encouraging, although work to improve and repair the highway network is still lagging. The largely privatised rail freight sector will do better, aided by Brazil’s commodity export boom, particularly in mining. We now expect the growth figure in 2008-2012 to be an annual average of 10.3%. Total tonnage handled by Brazil’s main seaports will rise by an average of 9.0% per annum in the forecast period, down on the 9.3% registered in the preceding five years. The main reason for this is that after the foreign trade and export boom peaked in 2004 and another strong year occurred in 2007, we see both import and export growth moderating in the next few years, when domestic consumption is likely to be the main engine of macroeconomic growth.



Brazil performs reasonably well in our freight transport industry business environment matrix, scoring significantly above the regional average. Freight growth, infrastructure growth, the regulatory and competitive environment all score well. Economic and political risk is comparable to the Latin American peer group. Foreign trade still represents only around 20% of GDP, although on the other hand the sheer geographical size of the country means there will be healthy internal demand for freight transport.



According to our latest estimates, the total value of transport and communications GDP will rise to US$123bn in nominal terms by 2012, representing 5.5% of Brazil’s GDP. The transport and communications sector employed 4.479mn people, or 5.0% of the labour force, in 2007. We see these figures rising to 5.821mn – and 5.3% – by 2012.