This is a best prospect industry for this market. It includes a market overview and trade data.
Last Published: 8/10/2017

Overview
Brazilian primary transportation infrastructure faces many challenges. According to the World Economic Forum, Brazil ranks 107th out of 144 countries in level of infrastructure development. Roads and ports need to be upgraded. The most common method of cargo transportation is in trucks via roads due to a limited rail network. Despite the existence of several rivers, waterways are rarely used, except in the Amazon region where rivers are usually the only way to access many isolated points. Railroads are few and uncompetitive. The use of trains for long distance transportation of passengers is restricted to a few urban tourist routes, while cargo transportation is mostly restricted to raw minerals.
 
In 2016, Brazil's President Michel Temer launched the Investment Partnership Program (PPI) also known as “Projeto Crescer”, an infrastructure concessions program to raise US$14.4 billion in investments for building and operating roads, port terminals, railways, and power transmission lines. The program is a key part of the government’ strategy to restore business confidence. According to the GoB, 55 new projects will be opened to the private sector. The full list of PPI projects is located at the “Projeto Crescer” website
 
The new program is driven by several key considerations:

  1. As Brazil emerges from a devastating recession, the Brazilian government is facing a tight fiscal situation which limits its ability to spend money on large investment projects.
  2. Given limited public investment funding, the GOB has focused on transferring billions in state –owned airport, road, railway, and port assets to private investors through long term (up to 30 year) infrastructure concession agreements (public-private partnership - PPPs).
  3. The major engine of economic growth is exports, particularly of commodities, but Brazil’s current primary infrastructure is proving to be a bottleneck to expanding exports. Therefore, Brazil needs to address a multitude of needs across its infrastructure sector;
  4. Corruption tied to past infrastructure concessions, has raised the Government’s desire to bring outside investment and financing.

 
In March 2017, Brazil raised $ 1.2 billion with the auction of four airports. Three European groups were awarded the rights to operate four airports over the next 30 years independent of Brazil’s state-owned airport administrator INFRAERO. For railways, the GOB will authorize early renewal for five railways already already under concession contracts in exchange for investments. The program also includes the concession of five big roads and port terminals.
 

Leading Sub-Sectors

  • Logistics: Brazil has one of the highest logistics costs in the world. Market analysts estimate that the distribution cost structure represents approximately 31.8 percent of logistics cost. This includes management, warehousing, inventory, legal requirements and transportation costs. Logistical costs represent an average of 12 percent of Brazil’s gross domestic product (GDP), while in the United States this amount is 8 percent. The objective of GOB’s PPI program is to provide Brazil with a transportation system that reflects its continental size. Opportunities for U.S companies in the logistics segment include digital infrastructure (big data); new technologies that improve control of freight movement and logistics, including drones and improvement in vehicle routing and efficiency, such as platooning of trucks. 

  • Roads: Highways represent more than half of all public transportation infrastructure in Brazil, followed by railways with 25 percent waterways with 17 percent and others, such as air transportation. With the enactment of PM752/16 GOB will be able to enter into renegotiation talks with rail and road concessionaires up to five years before the expiration of the contract. These renegotiations could be renegotiations for extensions with the promises of new investments, or the early termination of the contracts if the concessionaire and the GOB cannot come to an agreement on new investment terms. It also allows the GOB to terminate road contracts early if they are not “functioning” or meeting the terms of their contract, without any renegotiation. A list of the renegotiations projects can be found at the “Projeto Crescer” website
    Opportunities for this sector include in-road embedded sensors; mobile interfaces; intelligent transportation systems (ITS); radio and digital systems for the dissemination of highways conditions (events, closures, weather, etc.); transmission of highway related information to control center; access to highway information 24/7 through Wi-Fi and implementation of a “point to point” toll collection system.
     

  • Railways: Brazil has less than half as many kilometers of railroads as do either China or India. Transportation by roads represents 61 percent of total freight, while that of railroad comprises 21 percent Rail transportation has proven to be up to 30 percent cheaper and more efficient than paved roads. As part of the PPI concession plan, GOB plans to anticipate renewals of the already existing concessions of MRS, Rumo Logística and VLI.  A new build rail priority in 2017/8 is the Ferro Grão railroad that seeks to create a railway corridor for commodities exports from the state of Mato Grosso to the riverine ports in the north of Brazil. This rail line will parallel the existing road BR-163 which moves over half of the commodities produced in Mato Grosso. This should grant more than US$ 7.5 billion in investments for the rail sector. The upcoming rail auctions are part of the government’s efforts to raise private investment for infrastructure projects and boost a recovery from Brazil’s recession.  Opportunities in this sector include embedded technologies; intelligent transportation systems (ITS); risk and traffic management systems/operations; train control systems; signaling and communication systems; track material and equipment; installation of track systems; track inspection systems and rail maintenance equipment and locomotive spare parts. 

  • Ports: The GOB launched a very aggressive program of port concessions in several states. The criteria for defining the new leasing contracts for terminals at organized ports is primarily a fee-based concession paid by the companies operating the facilities. The main objective is to increase Brazil’s competitiveness, reduce barriers to market entry, modernize port management, increase trade, and reduce the high cost of doing business in Brazil. As part of the PPI program, a group of public port terminals will also enter the list, with extensions of existing contracts - such as those as the ports of Santos (SP), Vila do Conde (PA) and Niterói (RJ) - and concessions for new areas in the ports of Santana (PA), Itaqui (MA) and Paranaguá (PR). Best prospects for the port’s sector are: port terminal operation and management systems; vessel traffic management systems (VTMS); communications and radar technologies; security systems; RFID systems and dredging operations. 

  • Waterways: Brazil has enormous potential for river traffic with approximately 63,000 km of rivers and lakes, of which 45,000 km are navigable. However, Brazil’s use of transportation by waterways is small when compared to other countries. For example, 25 percent of cargo is transported by river in the United States and 35 percent in Canada; in Brazil, only 14 percent of cargo is transported this way. Most of this navigation occurs only in 15,000 km, most of which is in the Amazon region. Currently, the largest share of investments comes from the public sector, representing 97 percent of the funds (or about US$3 billion per year).  

  • Public Transportation: The Ministry of Cities is an autonomous federal agency responsible for establishing strategies, direction and priorities supporting the development of Brazil’s cities. One of the Ministry’s largest federal programs involves public transportation initiatives such as metros, Bus Rapid Transit (BRT), mass transit and traffic improvement. Every day, millions of Brazilians spend three to six hours traveling to and from work or school. The current metropolitan rail system transports about 8 million people daily throughout all major Brazilian cities. All public transportation projects are run at the municipal level so projects should be searched for on their web sites. Furthermore, the study showed that 63 percent of cities with more than 300,000 residents use illegal, unsafe and unreliable means of transportation. These many problems with the current system signal offer opportunities for growth and investment, including for U.S. companies. Some of the best prospects for this segment are on-board safety/surveillance systems that provides real time information; ITS; reliable train wireless data transmission (including inside tunnels) and management/operations transportations systems.

Opportunities

Logistics:
Digital infrastructure (big data); new technologies to improve control of freight movement and logistics including drones; improvement in vehicle routing and efficiency such ads platooning of trucks.
 
Roads: Embedded sensors; mobile interfaces; ITS; radio and digital systems for the dissemination of highways conditions (events, closures, weather, etc.); transmission of highway related information to control center; access to highway information 24/7 through Wi-Fi; implementation of a “point to point” toll collection system.
 
Railways: Embebed technologies; ITS; risk and traffic management systems/operations; train control systems; signaling and communication systems; track material and equipment; installation of track systems; track inspection systems and rail maintenance equipment and locomotive spare parts.
 
Ports: Port terminal operation and management systems; vessel traffic management systems (VTMS); communications and radar technologies; security systems; RFID systems; dredging operations.
 
Public Transportation: On-board safety/surveillance systems that provides real time information; ITS; reliable train wireless data transmission (including inside tunnels); management/operations transportations systems.
 
 
 

Brazil - Investment Partnership Program (PPI)

BRAZIL - Investment Partnership Program (PPI) - Key Projects
 

RAILWAYS - Click on the project’s name for additional information

 

EF 151 – SP/MG/GP/TO – North-South Railroad

Sub-concession

EF 170 – MT/PA - Ferrogrão Railroad

Common concession

EF 334/BA - FIOL Railroad

Sub-concession

Early extension of 5 railroad concessions

Extension

Source
 
 

Highway Brazil

HIGHWAYS - Click on the project’s name for additional information

Highway BR-101 RS (BR 101/290/386/448/SC/RS)

Common concession

Highway BR-364/365/MG/GO - Uberlândia a Jataí

Common concession

Highway BR-101/SC – Paulo Lopes a São João do Sul

Common concession

Highway BR-040/MG/RJ – Juiz de Fora a Rio de Janeiro

Common concession

Highway BR-116/RJ – Além Paraíba à BR-040

Common concession

Highway BR-116/RJ/SP – Rio de Janeiro a São Paulo

Common concession

Source
 

Ports Brazil

PORTS - Click on the project’s name for additional information

Vehicle Terminal in the Port of Paranaguá/PR - (PAR12)

For Rent / Lease

Cellulose Terminal at the Port of Paranaguá/PR - (PAR01)

For Rent / Lease

Wood Chip Terminal in the Port of Santana/AP - (MCP1)

For Rent / Lease

General Cargo Terminal at the Port of Itaqui/MA - (IQI 18)

For Rent / Lease

Terminal XXXIX in the Port of Santos S.A. – Caramuru

Extension

Chemical Terminal in the Port of Itaqui/MA - (TEQUIMAR)

Extension

NITSHORE PORT SERVICES S.A.

Extension

NITPORT SERVIÇOS PORTUÁRIOS S.A.

Extension

DECAL Port Terminal in Porto SUAPE/PE

Extension

Container Terminal in Porto Vila do Conde/PA - (Convicon)

Extension

Source
 


Web Resources 

 
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Brazil Distribution and Logistics Trade Development and Promotion