Railways account for 21.4% of cargo transportation in the country

The railway mode accounts for 21.4% of cargo movement in the country, second only to road transport (67.61%) (Vanessa Rodrigues/AT/Arquivo)

The railway mode accounts for 21.4% of cargo movement in the country, second only to road transport (67.61%). Trains mainly transport iron ore, grains and steel products, with low participation of general cargo. However, although the sector has growth potential both in transport infrastructure and in industry, progress depends on consistent public policies and synergy with the private sector.

This is demonstrated by the Panorama of the Brazilian Railway System with a Focus on General Cargo, which maps the railway sector in Brazil. The study was prepared by the Observatório Nacional de Transporte e Logística (ONTL) in partnership with the Associação Brasileira da Infraestrutura e Indústrias de Base (Abdib) and published by Infra S.A.

The study found that the railway sector has economic potential but is constrained by structural bottlenecks, high costs, low production scale and technological challenges. The report also highlights the potential of the national railway industry, whose growth is minimal due to a lack of production demand and the importation of part of the infrastructure, such as rails, for example.

According to the mapping, leveraging the railway transport sector and the industry depends on integrated public policies, innovation, network expansion and greater coordination between public and private investments. Among the main challenges are demand volatility and the Custo Brasil, while opportunities include new concessions, import substitution and regional train projects.

Infra S.A. also reported that it has a portfolio of eight railway concession projects for 2026, covering more than 9,000 kilometers of tracks, with investments totaling R\$ 800 billion. The Anel Ferroviário do Sudeste (EF-118), Ferrogrão, and the Corredor Leste-Oeste—comprising railways currently under construction also by Infra S.A., namely the Ferrovia de Integração Oeste-Leste (Fiol) and the Ferrovia de Integração do Centro-Oeste (Fico)—are among the railways planned for concession.

The Plano Nacional de Logística (PNL) 2035, which was used as a source for the panorama, sets the Federal Government’s goal of increasing the share of the railway mode in the transport matrix from the current 21% to 40% by 2035.

Transport modes

The survey shows that Brazil’s freight transport matrix remains heavily concentrated in road transport, especially for agricultural, industrial and consumer products. Railways rank second, while cabotage accounts for 8% of cargo, mainly containers and fuels.

Inland waterways account for about 1.5%, with emphasis on the main waterways in the North and Center-South regions. Pipelines represent just over 1%, focused on the transport of liquids and gaseous bulk cargo, and air transport has a residual share, below 0.1%.

The study indicates that road transport is best suited for short distances of up to 400 km, due to flexibility and fast door-to-door service, especially in urban areas, although it has higher costs over long distances.

For intermediate distances, between 400 km and 1,500 km, rail transport proves to be more efficient and sustainable, being suitable for large volumes, with lower energy consumption and environmental impact. Inland waterways and cabotage are ideal for long distances, from 1,500 km to 3,000 km, standing out for low operating costs and lower environmental impact, although they depend on adequate infrastructure.

Last in the ranking

Railway network density is one of the main indicators of freight and passenger transport efficiency, especially in countries with large territorial extensions, where the mode is strategic for the flow of commodities and industrial products. A comparative analysis of railway networks in ten countries—including Brazil, the United States, China and Russia—reveals how geographic, economic and historical factors influence the level of railway interconnectivity and their ability to meet national demands.

When measured by territorial area, Brazil ranks last among the countries analyzed, with a density of only 3.62 kilometers of railways per thousand square kilometers. This figure highlights the low railway coverage relative to the size of Brazilian territory and reinforces the lack of infrastructure capable of efficiently connecting producing regions, consumer centers and export areas—a historical bottleneck in national logistics. When the analysis considers railway density by population, Brazil ranks seventh, with 0.15 kilometer of railway per million inhabitants.

Although this index is higher than that of China and India, the world’s most populous countries, it still remains below that observed in most of the evaluated nations, indicating limitations in meeting domestic transport demands. The insufficiency of Brazil’s railway network directly impacts logistics, increasing transport costs and reducing the country’s competitiveness in the international market.

Iron ore

Brazilian rail transport remained heavily concentrated in a few types of cargo between 2010 and 2024. During this period, three subgroups—iron ore, soybeans and soybean meal, and agricultural production—together accounted for 87% of the total volume moved by railways in the country, highlighting the strategic role of the mode in the flow of commodities. This is indicated by the Panorama of the Brazilian Railway System with a Focus on General Cargo, by the Observatório Nacional de Transporte e Logística (ONTL) in partnership with the Associação Brasileira da Infraestrutura e Indústrias de Base (Abdib), published by Infra S.A.

Iron ore remained the main product transported, reaching its highest volume in 2018, with 441.4 million useful tons (UT). In 2019, there was an 18% drop compared to the previous year, a direct result of the Brumadinho dam failure, which interrupted operations at the Complexo Córrego do Feijão and affected the entire associated logistics chain, including sections of the Ferrovia Centro-Atlântica (FCA).

Although gross volume increased again in subsequent years, iron ore’s share of total transported cargo peaked in 2016, at 78.7%, and declined to 72.3% in 2024. The subgroup formed by soybeans and soybean meal showed significant growth over the historical series. Transported volume more than doubled, rising from 20.6 million UT in 2010 to 43.4 million UT in 2024, when it came to represent 8% of the total railway volume.

Growth was particularly strong in 2017 and 2018, following the expansion of agricultural production and export logistics. A similar trend was observed in the “agricultural production” subgroup, which includes agricultural products other than soybeans and meal. Transported volume increased from 19.4 million UT in 2010 to 36.1 million UT in 2024, reaching a 6.7% share of the total moved by railways. Although they still have a limited share in the railway matrix, the “container” and “fertilizers” subgroups also recorded significant absolute growth.

Each accounted for about 1% of total transported volume, but showed cumulative growth of 140% and 60%, respectively, indicating gradual diversification of cargo handled by the Brazilian railway mode.

Abifer has strategic demands

The Associação Brasileira da Indústria Ferroviária (Abifer) pointed out demands considered essential to boost the modernization, competitiveness and sustainability of the Brazilian railway sector. The proposals range from fleet renewal to tax adjustments and the expansion of financing instruments, with a focus on increasing the share of railways in the national freight transport matrix.

Replacement

Among the main priorities is the replacement of wagons and locomotives that have been in use for more than 50 years with equipment featuring technological innovations and sustainable solutions. According to the entity, fleet renewal could generate annual savings of 58 million tons of fuel and reduce CO₂ emissions by around 150,000 tons per year, in addition to increasing cargo concessionaires’ productivity by at least 30% and improving operational safety.

Import tariff

Abifer also advocates raising the import tariff on railway products from the current 11.2% to 35% as a way to align the sector with other transport modes and strengthen domestic industry. Another demand is support for the State policy led by the Ministério dos Transportes, which предусматри, through Infra S.A., increasing the railway mode’s share in the freight matrix from the current 27% to 40% by 2035.

Credit lines

In terms of financing and incentives, the entity seeks the inclusion of the railway sector in the Mover program of the Ministério do Desenvolvimento, Indústria, Comércio e Serviços, as well as access to credit lines from the Fundo Clima, operated by the Banco Nacional do Desenvolvimento Econômico e Social (BNDES). The extension of the special tax regime Reporto beyond 2028 is also considered essential to ensure investment predictability. According to the association, meeting these demands is crucial to increase logistical efficiency, reduce environmental impacts and strengthen the Brazilian railway industry.