2021 MIT SCALE Latin America Conference

THE REPOSITIONING OF EMPTY CONTAINER CAN

IMPROVE BRAZILIAN EXPORTS OF SOYBEAN GRAINS
THROUGH MANAUS PORTS (STATE OF AMAZONAS,
BRAZIL)

Oliveira, Bruno. D., Dr.; Rocha, Augusto. C. B. R., Dr.

March 21st to 26th, 2021

 Introduction
q Soybean has been stimulating both agribusiness development and the logistic sector worldwide.
q In Brazil, it helps warm the market of many regions and enhances export operations and the
industry of agricultural machineries and supplies.
q Soybean has also been contributing to the development of Brazilian companies and ports, and
to the accomplishment of positive trade balance outcomes.
q Soybean commercial cultivation in Brazil started its consistent ascending growth in the southern
region, then expanding to the territory known as the “polygon of acid soils” (mid-western),
spread around the savannah/“cerrado” biome.
q Grain soybean production in the Brazilian mid-western region, nowadays the top one in the
country, has already been partly exported through the northern region departing from Itacoatiara
and Santarém ports, which are located respectively in the states of Amazonas and Pará.
q This process is dependent upon cargo transfer from trucks to barges in Porto Velho port, in the
state of Rondônia, an operation ran by the companies Hermasa and Cargill (CARGILL, 2015;
AMAGGI, 2016).
 Research Questions and Main contribution
Ø CONSIDERING THE PREDOMINANT HIGHWAY TRANSPORT OF SOYBEAN GRAINS FROM
PRODUCTION AREAS TO THE PORTS WHERE THEY ARE MAINLY EXPORTED IN SOUTHERN AND
SOUTHEASTERN BRAZILIAN STATES, HOW CAN THE BRAZILIAN SOYBEAN CHAIN BE LESS
COSTLY AND MORE COMPETITIVE?

THE PRESENT STUDY CONTRIBUTES TO THE DISCUSSION OF

TWO MAIN ALTERNATIVES:

1. Exporting through Brazilian northern and

northeastern ports - Northern Arc - It is defined by
the infrastructure network around mainly 7 Brazilian
ports, 6 in the northern region and 1 in the northeast.
2. Use of empty containers available at Manaus
port after the unloading of containers shipped
mainly from China
 Overview of the methodology
Data analysis was approached quantitatively and
comparatively, with reference to Activity-Based Costing
(ABC) (Kaplan e cooper, 1988) and Cost-benefit
Analysis (DUPUIS, 1848) methods.

The state of Mato Grosso was chosen as point of origin

of routes leading to the northern region in face of the
following factors: shorter distances between croplands
and exporting ports; number one volume of soybean
production in the country.

Santos export port was selected for the comparative

analysis with Manaus port in face of the huge volumes
of soybean grains received from the state of
Mato Grosso, within a scenario of financial losses due
to logistics bottlenecks during embarking operations.
 Detailed quantitative and qualitative approaches
After identifying all the costs involved along the soybean transportation process, and assuming the
effective use of empty containers stored in Manaus port, a model was devised and represented by the
following equation:
𝑪 𝑠𝑜𝑦𝑏𝑒𝑎𝑛 𝑡𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡
= 𝑪 𝑓𝑟𝑒𝑖𝑔ℎ𝑡 𝑪 𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 + 𝑪 𝑡𝑎𝑥𝑒𝑠 + 𝑪 𝑖𝑛𝑠𝑢𝑟𝑎𝑛𝑐𝑒𝑠 + 𝐶 𝑡𝑜𝑙𝑙𝑠 + 𝑪 𝑠ℎ𝑖𝑝𝑝𝑖𝑛𝑔 + 𝑪 𝑙𝑜𝑠𝑠𝑒𝑠
+ 𝑪 𝑠𝑡𝑜𝑐𝑘 𝑖𝑛 𝑡𝑟𝑎𝑛𝑠𝑖𝑡 + 𝑪 𝑇𝑟𝑎𝑛𝑠𝑠ℎ𝑖𝑝𝑚𝑒𝑛𝑡 + 𝑪 𝑠𝑡𝑎𝑦
Two provider municipalities,
Sapezal and Campo Novo do
Parecis, were chosen because of
their top-ranking soybean
productions in Brazil, and also
because such productions have
already been exported through
ports of the northern region.
Experimental setting, data collection and calibration
Data are assumed to be applied to long haul
shipping of container stuffed with soybeans,
departing from Manaus port. It is possible to
have an absolute amount of 1,644,776 tons of
soybeans exported throughout the year,
since availability of empty containers in
Manaus happens all year round quite
uniformly, and can lead to a 5,300 TEU per
month media exports.
Numbers are lower in the beginning of the
year (January and February) and higher
towards the last quarter (6,600 TEU) Oliveira
(2015).
 Results and discussion of insights
q Exporting soybean grains through Manaus port in 20’ and 40’ containers, considering the provider
municipalities Sapezal and Campo Novo do Parecis (state of Mato Grosso), showed the following
results:
(1) 40’ containers – costs are 38% higher in the route Sapezal – Manaus compared to the route Sapezal -
Santos, and 43,7% higher in the route Campo Novo do Parecis - Manaus compared to the route
Campo Novo do Parecis - Santos;
(2) (2) 20’ containers – costs are 25,74% higher in the route Sapezal – Manaus compared to the route
Sapezal - Santos, and 31% higher in the route Campo Novo do Parecis - Manaus compared to the
route Campo Novo do Parecis – Santos.

q Two main kinds of operations challenge the cost issue of exporting soybean grains through Manaus:
transshipments and container shipping. Transshipments force a 19% increase along the existing
routes, and extra 12% are added to the total costs in shipping containers to Porto Velho. Therefore,
overall costs reach 31% along the export route through Manaus. Both costs (12% and 19%) need to be
reduced in order to make the Manaus export route more competitive in relation to the Santos route.
 Results and discussion of insights
Costs of maritime transport in 20’ and 40’ containers and total price in US$ of soybean delivered to
Shangai, China including reduced values of domestic freights (metric ton, 3rd qtr).
Source: Oliveira (2015); Salin (2020).
Route 1 Route 2 Route 3 Route 4
Containers
(SP) (AM) (SP) (AM)
20’ 112.06 140.91 109.07 143.05
Cost in national transport
40’ 112.06 154.68 109.07 156.82
20’ 44.83 22.72 44.83 22.72
Cost in ocean transport
40’ 44.83 24.07 44.83 24.07
20’ 156.89 166.63 153.90 165.77
Transport total cost
40’ 156.89 178.75 153.90 180.89
20’ 536.00 542.74 533.01 544.88
Soybean cost in the receiving country
40’ 536.00 557.86 533.01 560.00
Transport % of landed cost 20’ 29.27 30.70 28.90 30,42
Transport % of landed cost 40’ 29.27 32.04 28.90 32.30
 Results and discussion of insights
q Routes associated to the use of empty containers and Manaus Private Port Terminals, aimed
at Brazilian soybean exports, appear viable and more generally advantageous than those
leading to Santos port. Advantages can be represented, for example, by the achievement of a
53% waterway soybean transport, leading to a considerable carbon footprint decrease; a four-
day reduction in total transit period; and the possibility opened to producers to negotiate
deadlines and soybean prices due to a faster flow along the harvest transportation chain.

q The 2,8% increase in the costs of the route to Manaus are subjected to reduction, provided
that optimizations are made along the transportation chain. Such increase, it should be
reminded, is minimal when compared to the benefits generated to all the actors involved in the
transport of soybean grains. This in turn opens the perspective to engender satisfactory profits
that can be distributed in a more balanced way along the chain.
 Conclusions and future research
The proposition of a new export route through Manaus can be advantageous to the purchaser, the importer and the
ship-owner. The first does not need to pay the demurrage, a type of tax frequently charged in Santos port; the second
faces reduced costs along this route since the cost of maritime transport, for instance, is 45% lower than the one
observed along the route to Santos; the third benefits from the possibility of directing the ship straight to China (or
other country of destination), increasing productivity and avoiding the search for freights in other ports in the long
way back to China carrying empty containers, a trip that takes approximately 90 days. The port agent also benefits
from this route because productivity parameters can get close to optimum levels due to the increased movement of
containerized cargoes.
 Conclusions and future research
The loading of empty containers in the city of Manaus would permit a considerable increase of soybean
exports through the ports of North Brazil: around 1.6 tons/year. Such figure equals in volume to the
highest numbers held by southern soybeans export ports, confirming the growth of Manaus exports and
the advancement of navigation in “Arco Norte” with no significant demands of investments in port and
waterway infrastructure (OLIVEIRA, 2015).
 Conclusions and future research
Future research shall deal with the logistics bottleneck highlighted in the present study:
transshipment. Therefore, simulation of two different practices is potentially demanded:
1 – transference procedures and mechanisms of soybean grains from trucks to containers using the
force of gravity; 2 – transporting soybean grains in barges from Porto Velho to Manaus supported by
the corresponding cost assessment of such an operation.

Another field for immediate future research shall focus on feasibility

and cost analysis of exporting the state of Roraima’s promising
soybean harvests straight through Manaus port, on a one-leg route
basis. The reason for this is that current logistics imposes an increa
sed highway cost (corresponding to 370 km) in the transport of Ro-
raima’s soybean production: it first follows to Manaus (BR-174 high
way) and from there to Itacoatiara (AM-070 highway) to be exporte
d. This route could be optimized by releasing Roraima’s soybeans
exports straight from Manaus by loading the numerous available
empty containers in its port terminals, thus avoiding the additional
highway trip to Itacoatiara.
Thank you!
 References
Amaggi. (2016). Relatório de sustentabilidade 2016 Versão Integral. Retrieved from https://www.amaggi. com.br/r
elatorio2016/pdf/rs2016_versao_integral.pdf.

Cargill. (2015). Relatório anual 2015. Os 150 anos de história no mundo e 50 anos de Brasil. Retrieved from http
s://www.cargill.com.br/pt_BR/doc/1432101667412/relat%C3%B3rio-anual-2015-pdf-pt-br.pdf.

Dupuit, J. 1848. Études théoriques et pratiques sur le mouvement des eaux courantes. Paris, France: Carilian-
Goeury.

Kaplan, R. S., & Cooper, R. (1998). Cost & Effect: Using Intergrated Cost System to Drive Profitability and Perfor
mance. Boston, MA: Harvard Business School Press.

Oliveira, B. D. (2015). Análise dos custos de transporte de soja por meio de contêineres e os terminais portuários
de Manaus como uma nova rota para exportação da soja brasileira. (Unpublished master’s thesis). Universidade
Federal do Amazonas, Manaus, Brazil.

Salin, D. Soybean Transportation Guide: Brazil 2019. August 2020. U.S. Dept. of Agriculture, Agricultural Marketi
ng Service. Web. <http://dx.doi.org/10.9752/TS048.08-2020>
 • Authors

Dr. Bruno Duarte de Dr. Augusto César

Oliveira Barreto Rocha
Professor at the federal university Professor at the federal university
of Amazonas - UFAM of Amazonas - UFAM

brunoduarte@ufam.edu.br augusto@ufam.edu.br