Growing up in Brazil means dealing with the fact that you will be dependent on the roads: high costs of flight tickets and a sparse railroad network will force you to drive long distances more often than you would like. The fifth largest country of the word, covering almost half of South America’s territory, struggles with its logistics, particularly, when it comes to transportation infrastructure. The lack of railways in the country is a significant issue and directly impacts its logistics and economic development. This blog post will discuss why.

Currently, roads are used in about 60% of Brazil’s domestic freight transportations, while railways account for only 15%. The disparity creates different logistical challenges in the country, resulting in higher costs, long travel times, safety concerns and even risks of shortage of supplies, as it will be exemplified soon.

It all started in the beginning of the 20th century, when successive governments prioritized the development of roads over railways. This occurred in a more pronounced way during the government of Juscelino Kubitschek, president of Brazil from 1956 and 1961. During his administration, the automobile industry was growing rapidly in the country, and the development of highways was seen as an important factor in supporting this industry. At the same time, railways were seen as outdated technology and the country’s rugged terrain with huge distances made building hailways an expensive challenging task.

Map of the Brazilian rail network in 2023, according to the National Association of Railroad Transporters.

The consequences of these policies still resonate in Brazil’s logistics in several ways. Some examples are:

Higher Transportation Costs: roads are more expensive to maintain and to operate than railways, especially when it comes to heavy cargo/long distance transportation. Therefore, this overreliance on roads makes Brazilian goods less competitive in internal and external markets, negatively affecting the economy of the country.

Safety Concerns: some regions of the country suffer with lack of investment, thus the conditions of the roads are not the best. This leads to accidents that impact not only the safety of drivers and passengers but also can damage or destroy products being transported. However, the lack of a rail network in the country makes companies have to opt for this less safe option.

Environmental Impact: the large number of vehicles, from which the huge majority is still fossil fuel powered, is responsible for a great amount of greenhouse gasses emissions, making it more difficult for Brazil to meet its climate goals.

Risk of Shortages: in 2018 a eleven days truck drivers’ strike took place in Brazil, leading to fuel and food shortages across the country and economical losses estimated at around $1.75 billion. This fact made it even more explicit how companies struggle to find alternative means of transportation in Brazilian territory.

In conclusion, the lack of railways in Brazil is a significant challenge for the country’s logistics and economical development. In a country that relies heavily on exports, this issue will remain as long as efforts are not directed to improve the transportation infrastructure, hindering its competitiveness in the global market. Nevertheless, the overreliance on this mode of transport also directly affects the sustainability goals of the country.