By José Barbero. Dry bulk commodities play a significant role in the freight matrix of Argentina, a country that has traditionally exported cereals and oilseeds. Their volumes have grown considerably in recent years, and international market perspectives show that they will continue to grow in the near future. Currently, the logistics of these commodities presents some problems, which could considerably worsen if the export flow increases.
The importance of grain exports is reflected in the country’s freight matrix: approximately 13% of the total ton/km correspond to export flows, and of that, 62% belongs to the so-called agroindustrial complex, in which grains are the predominant commodity in terms of volume. In this freight matrix, 93% of flows are transported by truck, and only 5% by railroad; however, in the specific case of agricultural exports the share of the railroad increases to 19%. Short sea shipping and river transport have a marginal role, as much for total freight as for exports. This indicates that over 80% of the grains that arrive to port in Argentina do so by truck.
One particularity of these bulk flows --with a crucial impact on their logistics-- is their high level of concentration: in the areas of origin of freight, at export nodes, in the mode of transport they use, and in the corridors through which they’re moved. Their seasonality has lessened in recent years, due in large part to the expansion of warehousing capacity; much of this expansion has taken place using the so-called “bag silos,” made of plastic sheeting. These are beneficial for producers, but have favored highway transport, given that they allow freight by truck and not by railroad.
The origins of Argentina’s grains are grouped in the central zone of the country; 3 of the 24 provinces produce 80% of exportable products. The exit nodes through which they are shipped overseas are principally a series of terminals on the Paraná River, contiguous with the city of Rosario. Currently these terminals account for 63% of the country’s grain exports; the rest are routed through the Atlantic ports, particularly Bahia Blanca. 30 years ago the proportions were reversed: two thirds of exports were realized through the maritime coastline and one third through the riverways. The displacement of crops to the north, particularly soy, is what prompted this change.
The concentration of freight in the Paraná River terminals leads to significant congestion. The bottlenecks are not caused by transhipment capacity: as demand grew, the terminals expanded their capacity, even adding several new ones (today there are 22). The greatest problem is found in land access; queues of trucks longer than 15 kilometers are common during the high season, generating a loss of truck productivity and severe conflicts with the urban areas that surround these terminals.
A recent study (CIPPEC, 2013) provides a preview of what the future holds in the scenario of a very probable increase in volumes. The projections indicate that the greatest part of the expected growth, which could reach 30 million tons (from 73 to 103 million tons exported annually) would maintain a pattern of origin similar to the current one, because the increase would result more from improved yield in the central zone than from a displacement of the agricultural frontier to the north of the country (where yields are smaller). The question that arises is how this traffic will be routed. It is very probable that it will continue to be directed to the terminals close to Rosario, since the average distance between production center and exit port is around 300 km, and many collection centers and terminals only have facilities to load and unload trucks.
Source: CIPPEC (2013).
The analysis --the results of which are summarized in the maps above-- suggests that the volumes exported by the terminals in Rosario could grow between 25% and 50% in 20 years, intensifying the problems of land access and presenting challenges for nautical access through riverways as well. The road corridors through which the flows are routed will also suffer increased pressure; currently more than 40% of traffic on the Argentine road network (measured in equivalent vehicles) is composed of trucks.
The alternative of a modal shift, which favors railway transport, appears to be a basic strategy for the future development of bulk logistics. But its implementation is not simple. The relatively short transport distances between the productive areas of the center of the country and the ports of the Paraná do not help (though they do in the productive regions of the north of the country, with distances around 1000 km), and the railway system is deteriorated. Improving it requires large scale investments in infrastructure, which must principally be done with public resources; the private sector can collaborate with loading and unloading facilities and with rolling stock. It also requires a regulatory framework that maximizes load handling, which should boost intramodal competition through rules of access.
CIPPEC (2013). “Logistics infrastructure: Creating a freight matrix for competitivity and sustainable development.”
José Barbero (Argentina). A specialist in transport planning and policy, with over 30 years of professional experience in Latin America. Originally a geographer, he undertook postgraduate studies in economics and transport planning at the University of Toronto and MIT. He also served as a public official and in transport companies. Currently Barbero is an independent consultant and dean of the Railroad Technology Institute of the National San Martin University, Argentina.