Boston, MA -- (SBWIRE) -- 10/01/2013 -- We forecast that growth in Brazil's freight transport volumes will outpace the Latin American giant's real GDP growth in 2013 and over our medium-term forecast period (2013-2017), across all modes. Continued growth in the BRIC nation's mining and agribusiness sectors will ensure that the road, rail and ports sectors will continue to experience healthy expansion, while air freight will benefit from the growing demands of the country's expanding middle class.

Nevertheless there remain serious challenges to growth, and hence risks to our outlook. These stem from both the physical side - whether infrastructure development in the country will be sufficient to support our projected growth rates - and the human - the ports sector is already undergoing a wave of industrial unrest as workers contest the government's proposed ports privatisation moves.

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Key Industry Data

- Air freight tonnes to grow 5.26% in 2013 to reach 1.25mn tonnes. Over the medium term, to 2017, we predict that growth will average 6% a year.
- Total tonnage throughput at the port of Santos to grow 3.7% in 2013 to reach 108mn tonnes. To 2017, we predict average annual growth of 7.0%.
- Rail freight tonnes to grow by 2.8% in 2013 to reach 543mn tonnes. To 2017, we predict average annual growth of 3.4%.

Key Industry Trends

Vale Takes Delivery Of Vale Caofeidian

Brazilian miner Vale has expanded its fleet with the delivery of a 380,000 deadweight tonnage (DWT) very large ore carrier (VLOC), Vale Caofeidian, from China Rongsheng Heavy Industries Group Holdings Limited. The vessel was delivered on July 22.

Strike Threat Persists

The Brazilian ports sector remains at risk of industrial action, and with this comes risk to BMI's throughput growth forecasts for the country's maritime facilities in 2013 and beyond.

Latam Airlines Announces US$1bn Capital Increase

Latam Airlines announced a US$1bn capital increase to finance its investment plan and strengthen its balance sheet. Latam Airlines aims to improve its financial profile to gain investment-grade rating, to help it obtain less-expensive financing.

Risks To Outlook

The key risk to our outlook facing the Brazilian freight transport sector is the very real possibility that Brazil will not adequately improve its infrastructure in order to keep pace with global demand for its exports; there have been further instances of delays in sugar loading during the past quarter. These delays raise further questions as to whether the ports (and roads and airports) will be able to cope with the demands placed upon them as the country gets ready to host the 2014 FIFA World Cup and the 2016 Olympic Games which are due to be held in Rio de Janeiro.

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