In Brazil, Highway Robbery Is Just That

The country’s No. 1 copper refiner ships by sea to avoid road bandits | “It’s much more attractive for a gang to specialize in this segment”

Juan Pablo Spinetto and Christiana Sciaudone

The High Cost of Driving | 468m Value of cargo stolen on roads in Brazil last year | 21% Cut in costs from ocean transport due to a drop in thievery


Most companies decide how to ship their goods by determining the fastest route between point A and point B. But Paranapanema, Brazil’s biggest refined copper producer, is switching its domestic shipments to slow-moving ocean freighters from swifter trucks. Although the shift almost triples transport times, it cuts costs by 21 percent by eliminating a threat peculiar to Brazilian roads: thieves.

Paranapanema is transporting 65 percent of its domestic deliveries of products such as copper plates and rods by ship this year; last year it sent nothing by sea. The Dias D’Avila-based company plans to move 80 percent by water at year’s end because 15 loads were hijacked along roads in 2012, according to interim Chief Executive Officer Edson Monteiro. “There are a lot of trucks stolen, a lot of violence — we invest a lot in security,” he says. “Nothing has been done in the past 10 years to improve transportation by roads. Brazil is very weak on this issue.”

Companies such as Paranapanema are braving port bottlenecks and longer shipping times to avoid Brazil’s highway network, where gangs armed with machine guns and rifles regularly steal goods, from copper to food, either by bribing drivers, using force, or even kidnapping family members of trucking staff. Almost 1 billion reais ($468 million) of cargo was stolen last year on Brazil’s roads, 37 percent more than in 2006, according to São Paulo’s cargo transport industry association, known as Setcesp.

“Security is Brazil’s Achilles’ heel,” says Fabio Bechara, prosecutor and legal adviser for São Paulo state’s security secretariat. More than half the estimated 13,000 road robberies each year take place in the state, according to Setcesp. “This is a profitable business for those who get the cargo,” Bechara says.

Trucks transport about 60 percent of Brazil’s domestic cargo, and the surge in thefts is among the limits to growth for companies and the country. It’s a problem even as the government is seeking private investors to build and operate 7,500 kilometers (4,660 miles) of new roads as part of an infrastructure investment plan totaling $235 billion.

Security officials in São Paulo are stepping up monitoring of thefts and increasing existing patrols on roads, Bechara says. Insurance companies are helping to pay for preventive measures such as armed vehicle and helicopter escorts and reinforced rear doors on trucks, akin to those found on bank vaults, says Ricardo Cestenario, director of transportation at insurer Generali Brasil Seguros, a unit of Italy’s Assicurazioni Generali.

Copper is a popular commodity to steal because it’s hard to trace, Cestenario says. Even though the price of the metal used in plumbing and wiring has slumped 13 percent this year because of slowing growth in Chinese demand, it’s still almost triple the level of a decade ago. Food, which also is difficult to trace, is the most targeted cargo, representing 37 percent of stolen cargo last year.

One reason hijackings have picked up is that laws are too lax to dissuade robberies, Cestenario says. The penalty for cargo theft on roads is one year in prison, Bechara says. Setcesp estimates that less than 20 percent of stolen cargo is ever recovered. “Robbing truck cargo has a much lower penalty compared with robbing banks or dealing drugs,” Cestenario says. “It’s much more attractive for a gang to specialize in this segment.” The press office for Brazil’s Federal Police didn’t reply to an e-mail seeking comment.

For Paranapanema, shipping refined copper products from its plant in Bahia state to a distribution center in Rio de Janeiro state is an eight-day trip, including loading and unloading at ports. Even though the 1,700-kilometer trip would take three days by truck, ferrying goods via the Atlantic Ocean route is cheaper, less bureaucratic, and safer, says Monteiro, who was named interim CEO in January.

Paranapanema officials say the new shipping strategy is helping the company reduce transport costs from 305 reais per metric ton to 242 reais, in addition to cutting carbon emissions by 65 percent. The cost premium for sea transport also shrank when trucking costs climbed as much as 30 percent after new legislation was passed giving drivers longer breaks, Monteiro says. For additional cost savings, Paranapanema is considering moving its Rio distribution center closer to the port, he says. That doesn’t mean his logistics staff can rest easy. “We need to look for alternatives,” Monteiro says. “We adopt new practices, but they always figure out how to foil the system.”

The bottom line Trucks transport 60 percent of Brazil’s cargo, about $470 million of which was stolen last year on the country’s roads.


Magazines Review offers you a broad range of popular American magazines online. Browse an extensive directory of magazines, covering most important aspects of your life. Find the most recent issues of your favourite magazine, or check out the oldest ones.

About content

All the articles are taken from the official magazine websites and other open web resources.

Please send your complains and suggestions through our feedback form. Thank you.