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Brazil Freight Transport Report Q1 2011
Business Monitor International, Dec 2010, Pages: 56
Brazil Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Brazil's freight transportation industry.
Brazil is growing rapidly but its infrastructure to carry freight is still poor and requires rapid development. In general, the Brazilian market has appeared to be strongly supportive of the local freight transport sector. The country's GDP expanded at the fastest rate in 15 years and is expected to be 6.0% for 2010.
Dilma Rouseff of the ruling office Partido dos Trabalhadores (PT) was elected president in October, 2010 after her victory in a run-off poll, when she beat José Serra of the centrist opposition PSDB with 56% of the vote against 44%, after failing to beat him in the first round. Increased infrastructure spending is thought to be on her agenda.
Recent economic reports have noted that Brazil's airport infrastructure is still lagging behind demand. In 2008 and 2009, the air freight industry was shaken by capacity, air traffic control and safety problems.
However, BMI has noted that a process of gradual improvement is underway. We project that air cargo volume will grow by 7.6% in 2010, following a -12.4% slump in 2009.
Brazil's main ports are bouncing back after the decline in 2009. For 2010, BMI forecasts that volume at Santos which is the county’s main port will grow by a strong 12.3%. For the rest of our five-year forecast period to 2014, the port will be at the centre of Brazil's dynamic trading activity. We predict annual average volume growth of 10.6% to 2014. At the southern Port of Itajaí growth will also be strong.
Last year was not a typical year, with volumes rising sharply following a fall caused by flooding damage at the Teconvi terminal in late 2008. However, for 2010 we project tonnage to increase by 19%.
The government is considering new rules to boost competition in the rail sector. Total tonnes carried by rail, fell by -8.1% in 2009, are expected to surge by 18.8% in 2010.
In real terms, Brazil's trade slumped by -10.9% during last year's global recession but it is set to bounce back very strongly in 2010 with 20.3% growth. As domestic demand powers ahead, imports should decisively lead the way with growth of 31%, while exports will grow by a more modest 8% in 2010.
For 2011, the expectation at BMI is that exports will increase to 12.8% but imports will fall to 14% as domestic consumer spending declines giving a real growth in total trade of 13.5%. An overly strong consumer boom in 2010 would increase demand for freight transport, but it is likely to be short-lived and be followed by slower growth in 2011. BMI does not expect a major double dip recession to hit Brazil in 2011 or that China will massively reduce its consumption.
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