Brazilian railroad sector: What is its importance
When we talk about the Brazilian railroad sector, we are dealing with one of the main modes of cargo and people transportation in Brazil and the world. As our audience is national, we need to address the history of this important sector here in the country. The beginning of this history took place in 1852, when the first railroad section was granted to the future Barão de Mauá, Irineu Evangelista de Souza. The work took two years to be inaugurated and, in 1854, the stretch was around 14.5 km long, connecting the city of Rio de Janeiro to Petrópolis, both municipalities in the state of Rio.
Until then, the government's discussion was focused on which sector would be most worth investing in, by rail or highway. However, the Brazilian president chose to prioritize highway roads for some aspects. First, he saw on the highways a great possibility of interconnecting Brazilian cities. In this way, the sector would allow both cargo transportation and outflow to Brazilian ports, as well as allowing people to move between cities. Juscelino was also one of the main Brazilian leaders who invested in the industrial sector, raising foreign capital and expanding the size of industries in Brazil. Therefore, another point that made the president, having to choose between railroad or highway, opt for the second option, was the possibility that he saw of expansion of the auto industries. The reasoning is simple: the more roads, the more automotive vehicles could circulate and, thus, they would become a highly sought after consumer item. In this way, foreign industries would be attracted to invest in the construction of factories here in Brazil, in order to increase the production and creation of automotive vehicles.
The focus of our text from now on will be to address the importance of the Brazilian railroad sector today. Thus, we will make notes on how the sector is composed, what are the main loads handled and their quantities, the number of workers working in this sector and much more. Keep up with us and come to know more about the importance of this sector in particular for the country's economy.
Content Index
Cargo handling in the Brazilian railroad sector
The Brazilian railroad sector is important for several reasons. One of the main ones is due to the amount of cargo handled, supplying several Brazilian cities, as well as national ports, fundamental spaces for the export of items produced and extracted in our territory. The main items handled by rail transport are those produced in basic industries, such as ores, grains, agricultural inputs, corn, soybeans, among others.
As we mentioned, the change in the way in which the railroads started to be managed occurred from the 90's, when the railroads started to be controlled mostly by the private initiative through concessions auctioned off. Investments increased and, consequently, the cargo handled grew as well.
According to data from the National railroad Transport Agency (ANTF), in 2019 the number of cargos handled in the Brazilian railroad sector was 95% higher than in 1997, when there was the main legislative change in the treatment of the railroad administration. In 2019, 493.8 million useful tons (TU) were handled, much higher than the 253 million useful tons transported at the end of the last century. Also, according to data from the agency, the main product transported last year was iron ore.
Although the largest mode of transport in Brazil is road, important items of production and export have the railroads as the main routes of flow. ANTF data show that 40% of agricultural products, 50% of sugar transport and 92% of iron ore movement is carried out by railroads.
ANTF, which is the main regulatory agency and which carries out several researches and notes about the Brazilian railroad sector, also presents a series of important data about cargo transportation in recent years. She points out, for example, that despite the growth in investments in the sector in the recent past, the Brazilian railroad sector is still far behind the Brazilian road sector, which has established itself as the main cargo transport sector in the country. The agency's estimate is that only 20% of the loads currently transported are handled on the railroads, while the highways transport around 65% of all inputs in the country.
Financial importance of the Brazilian railroad sector
The Brazilian railroad sector has always had great importance for Brazilian finances. As we have seen, the sector has been neglected by the road sector for a long period, as the current governments saw this sector as a financially advantageous space and, therefore, invested in the growth of highways. Despite this, railroads have always had great economic importance for the country and still have today. It is easy to understand this point, just look at the numbers of investments made in this sector.
In 2019 alone, 3.3 billion reais were invested to expand the Brazilian rail sector. With the change in the management model of the lines, the governments started to invest again in the sector so that the line auctions generate profits for the public coffers, since, as the concessions last for a certain period of time, the government periodically profits from the sale of the line concession. To better illustrate, we can mention the auction won by the company RUMO in 2019, in which the company won two stretches of the Norte Sul railroad for more than 2 billion reais.
Another important factor, economically speaking, that the railroad sector presents, especially in relation to other sectors, is the ease of logistics. The railroad lines are advantageous because they allow a much larger load transport in a single vehicle, since a train usually has more than 100 wagons, allowing the transport of a huge amount of loads in a single trip. In addition, compared to highways, railroads do not have a toll, have a lower cost of supplying vehicles, have no traffic and, therefore, become attractive spaces for investments to grow and surpass themselves continuously.
Number of employees
Finally, it is essential to mention the generation of jobs that the Brazilian railroad sector grants to Brazilians. The sector demands from several workers in the companies they manage, in the driving of trains, in the assembly of railroads, in the maintenance of tracks, in the control of activities and in other operations.
According to ANTF data, the generation of jobs within the sector increased by more than 200% from 1997 until last year, while in the past decades the number of workers in this sector was 13,506, currently there are about 41,632 people working for the development, maintenance and growth of the Brazilian railroad sector.
Conclusion
We can conclude with the article presented that the railroad sector has great economic importance for Brazil. A huge number of products are transported in this sector, the generation of jobs is quite large and, for this reason, the sector is established in Brazil as one of the main modes of cargo transportation.
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https://portogente.com.br/portopedia/112739-ferrovias-importancia-para-o-transporte-de-carga
https://www.cnt.org.br/agencia-cnt/volume-cargas-transportadas-ferrovias-cresce-10-um-ano
