Jul 27, 2020

Completion of Highway BR-163 lowers Transportation Costs 25%

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

The completion of Highway BR-163 in northern Brazil lowered the cost of transporting grain from northern Mato Grosso to ports on the Amazon River by approximately 25%. Before the last 50 kilometers were paved in late 2019, a truck driver never know how long it would take to deliver his load due to muddy and unpassable conditions. With the completion of the paving, they now know exactly how long it would take to make a round trip. Drivers can now complete 6 to 8 round trips per month from northern Mato Grosso to the Port of Miritituba.

Before the paving was completed, it cost about R$ 230 per ton (approximately $1.27 per bushel) to transport soybeans from northern Mato Grosso to the Port of Miritituba. After the paving has been completed, the cost is about R$ 170 per ton (approximately $0.94 per bushel).

We have all heard the saying "be careful what you wish for", well that could also apply to Highway BR-163. Farmers wished for a long time for that highway to be completed and now that the highway has been completed, it is going to be turned into a toll road. So, some of the lower freight costs will now be eaten away by the toll charges.