March 7, 2013

60 Kilometer Line of Trucks Waiting to Unload Soy in Mato Grosso

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

A record large soybean crop in Mato Grosso has resulted in record long lines of trucks waiting to unload soybeans at one of the three rail terminals in the state. The line of trucks waiting to unload soybeans at the America Latina Logistica (ALL) grain terminal in southeastern Mato Grosso reached 60 kilometers long on Wednesday. More than two thousand trucks were lined up along BR-364 between the cities of Alto Garcas and Alto Araguaia as they waited to enter the Ferronorte Railroad grain terminal at the city of Alto Araguaia.

The long lines are the result of a record large soybean crop and over contracting by companies operating at the terminal. ALL stated that their terminal can load 600 rail cars per day, which equates to 1,200 trucks and they feel the situation will normalize itself within a few days. The long lines made national news in Brazil on Thursday as truck drivers complained of waiting 2-3 days along the highway before entering the terminal.

The state highway police were called in to help the flow of traffic on the one remaining lane not occupied by the line of trucks.

The Ferronorte rail line is the only railroad in the state of Mato Grosso, which is the largest grain producing state in Brazil. The railroad extends into the state approximately one hundred miles and it connects the state with the Port of Santos in southeastern Brazil.

The increase in soybean and safrinhacorn production in the state has outpaced the infrastructure needed to accommodate the crop, which has led to chronic shortage of storage space and a lower cost alternative to transport the grain to export markets. With only one inadequate railroad in the state, sixty percent of the state's grain production still moves by truck to export facilities at very high costs. Some estimates put the cost of transportation in Brazil as high as 23% to 27% of the cost of the soybeans. By contrast, Brazil's two main competitors, the United States and Argentina, have very low transportation costs.