Vibra Aims to Expand Coastal Transportation of Fuels, Such as Biodiesel, by Up to 20% by 2022

Largest Fuel Distributor in Brazil, Vibra Achieved Savings of R$ 17 Million Last Year Thanks to Cabotage Transportation of Biodiesel

After consolidating cabotage transportation last year, Vibra Energia, largest fuel distributor in Brazil, aims to increase the volume of biodiesel transported from Rio Grande do Sul to the Northeast by 10% to 20% through this type of operation in 2022. The company will thus be able to reduce its logistics costs compared to road transportation.

The first cabotage operation of biodiesel carried out by Vibra took place in 2019, making the company a pioneer on the route between the producing hub in Rio Grande do Sul and the state of Pernambuco. Last year, the company shipped over 47.5 million liters of the biofuel to the Northeast region.

According to Marcelo Fernandes Bragança – Executive Vice President of Operations, Logistics, and Sourcing at Vibra -, cabotage is a mode that can accommodate larger volumes than trucks, which resulted in savings of 17 million reais to the company in logistics costs during the past year, enhancing its competitiveness.

This year, considering the strong demand among consumers in the Northeast, about 17.6 million liters of biodiesel have already been transported through cabotage by the distributor.

According to Bragança, the financial impact brought to Vibra by the operations in question this year has not yet been assessed, as it also depends on the variation in fuel prices. The executive explained that the comparison is made with each transaction, based on the cost incurred if the same volumes were transported by road mode, as occurred previously. He added that the rise in fuel prices should also favor cost savings results.

Vibra Used to Obtain Biofuel from Industries in the Midwest

Bragança reports that, before the route from Rio Grande do Sul was adopted, the company sourced biofuel from industries in the Midwest, sending it to northeastern consumers via road transport.

Today, on the other hand, Vibra estimates that a single ship carrying biodiesel transports the same volume as 200 trucks. Thus, thanks to cabotage, the company calculates it avoided 900 road trips between the Midwest and Northeast during the year 2021.

According to Marcelo Fernandes Bragança, cabotage operations begin saving fuel right from transportation, considering that a ship consumes, on average, 287 m³ of diesel oil, while the 900 truck trips that would have been made previously throughout the year required about 1,165 m³ of this fuel.

Moreover, the executive also highlighted the environmental importance of the operation, which helps reduce carbon emissions. Last year, for example, cabotage allowed a reduction of 1,818 tons of CO2 equivalent from being released into the atmosphere.

Incentive for Cabotage Transportation of Fuels in Brazil is Expanded

Cabotage refers to coastal navigation between ports of the same country or over short distances. In countries where the navigable coast is very large, such as the United States, the use of this mode for fuel transportation is already quite widespread.

Bragança states that in Brazil, there is increased competitiveness and a trend of growth in cabotage shipping with the help of the federal BR do Mar program, which aims to encourage operations of this mode.

The executive clarifies that the program is responsible for simplifying cabotage legislation in the country. Previously, a vessel with only a Brazilian flag was required to perform this type of operation, which is not very common.

However, currently, the chartering of foreign vessels for use in cargo transportation in Brazilian cabotage has been relaxed. Enacted in January, law n° 14,301 encompasses the measures of the program aiming to raise the participation of this mode of transportation in the national logistics matrix from 11% to 30%.

In addition to biodiesel transportation, which has been established as a regular flow route, Vibra also conducts coastal operations for the transportation of ethanol and some derivatives, but in smaller volumes.