Background

Since its arrival in the country, automotive road transportation has been in competition with the railway, which had been developed 50 years earlier. However, the railroad transportation system in the center and south of the country has been witnessing a slow decline, even as other countries are currently reaching a balanced situation in terms of volumes of cargo being transported.

Peruvian national productivity is strengthened by mining, which is why there has been an expansion of the road network with primacy over rail transport; in this way the Ferrocarril Central (Central Railway) is in direct specific competition with the Carretera Central. According to ^{Casapia (2014}), these two modes of competitive transportation comprise the “central bimodal”, which connects the regions of Pasco, Junín and Lima with the Port of Callao; therefore, it is deduced that the transportation of freight by trucks is almost four times the freight transported by trains, leading to congestion of the highway (see Figure 1).

The Carretera Central, with 377 km of track, has been under concession to Deviandes S.A.C. since 2010, which is charged of performing routine and periodic maintenance in order to postpone its rehabilitation. Its revenues are derived from the collection of tolls in Corcona, Casaracra and Quiulla, to which an additional toll would be added, covered by annual minimum income guaranteed by the Government -that for 2016 was USD 14 271 590, excluding I.G.V. (General Sales Tax) and for each toll station- as stipulated in the concession agreement of the Supervisory Board for Investment in Public Transport Infrastructure [ ^{Ositrán] (2010})

The Ferrocarril Central was concessioned in 1999 to Ferrovías Central Andina S.A., whose infrastructure, tractive stock (locomotives) and rolling stock (coaches and wagons) came from Empresa Nacional de Ferrocarriles (Enafer). The railrway, with a standard gauge of 1.44 m and a length of 477 km, is being rehabilitated and its rail yard, renovated. Its tariffs are established based on the charge for use of the track per kilometer traveled, from which the Government receives 24.75% of gross revenues (not including revenues from tractive or rolling stock or I.G.V.) (^{Ositrán, 2006}).

The importance of the storage and shipment of freight in the Central Region extends to the Port of Callao, as it is part of the logistics chain of minerals exported between the mine or concentrating plant and the ships to be loaded at the port. Thus, since the end of 2014, exports have been realized through the concession of the Terminal de Embarque de Concentrados de Minerales to the company Transportadora Callao S.A. which has a hermetic conveyor belt system that goes from a free or public access point (open access) or transfer tower to the dock (shiploader), designed to handle 2000 tonnes per hour and ships of up to 60 000 deadweight tonnes (DWT). According to Transportadora Callao (2018). the benefits of this shipping system are that it is 5 times faster than the previous one, it reduces 8 days of waiting time at anchor, it reduces 3 days of dock laytime, and it has replaced approximately 369 000 truck trips between warehouses and the port.

Source: Prepared by the author with the aid of geospatial tools.

Figure 1 Intermodal competition flow of the “bimodal central” and concentrate loading in Port of Callao. 

The objective of this research is to analyze the adequate intermodal competition of mining freight transportation to reduce vehicular congestion in the mining logistics chain in the Central Region.

HYPOTHESIS

Adequate intermodal competition in rail freight transportation reduces vehicular congestion in the mining logistics chain in the Central Region.

JUSTIFICATION

The traditional mining sector is the main exporter in Peru. In 2017, this sector generated around 61% of the total value of FOB exports, which amounted to USD 26 809 000 000, representing an increase of 27.4% compared with the previous year, due to the increase in exports of copper (36%), iron (27%), zinc (32%), and other minerals (42%) (^{Superintendencia Nacional de Aduanas y de Administración Tributaria [SUNAT], 2018}), which has contributed to the increase in GDP, which is the indicator that measures the capacity to generate wealth in the economy of the country.

Due to the absence of refineries in Peru, more than 95% of mining production, including ore concentrates such as copper, lead, silver, gold, zinc, and molybdenum, is sent to foreign markets. These concentrates have been traded internationally through private companies, which include domestic and foreign producers and traders, who are currently in charge of mobilizing the total exportable production of these concentrates using their logistics and means of transportation.

Due to the extensive use of cargo trucks, with the premise that it is the only means to meet commercial deadlines, year after year the vehicular congestion on the Carretera Central increases at rates for which its transportation infrastructure was not designed.

The Central Region has another much more efficient means of transportation for large volumes of freight and long distances: the Ferrocarril Central. However, it does not have the same equity conditions, even though the Plan Nacional de Desarrollo Ferroviario (National Railway Development Plan) indicates that its purpose is to contribute to the competitiveness of exports (^{Resolución Ministerial N.° 396-2016-MTC, 2016}).

Public transportation infrastructure should aim to reach more places and in faster ways, to be more economical, more comfortable and safer, and especially reduce the infrastructure gap and increase the competitiveness of the country. Consequently, this study analyzes the correlation between the problem of the excess of trucks with mining cargo on the Carretera Central, according to intermodal competition, and its mining logistics to ports; thus, the study proposes to reduce its circulation by using the railway, which is more efficient and affordable.

THEORETICAL BASIS

Mining Productivity in the Central Region

The area of influence of this study covers the Central Region of the country, in which there has been metal mining production activity for many years, particularly in the Andean terrain of Lima, Junín and Pasco. Therefore, the research is directly circumscribed in 20 mining units, 15 of which have been exploited by underground mining; 4 by surface mining; and 1, Cajamarquilla, by refinery (^{Ministerio de Energía y Minas [MINEM], 2018}) (see Table 1).

Bimodal Central Competition in Mining Freight Transport

Approximately one century ago, mining freight from the Cerro de Pasco Copper Corporation to La Oroya and El Callao was transported by railway. However, the later appearance of heavy goods vehicles and the completion of the Carretera Central in 1936 showed that its logistics could be reduced, especially because there was neither at the time nor at the present day a fair price between the toll value per axle and the equivalent deterioration per axle caused by overloading the road.

Since it is difficult to obtain information on the transportation of minerals through the country’s highways, a count of land transportation units is made when these vehicles cross checkpoints or stations. In this way the Ministry of Transportation and Communications obtains the IMDA by type of vehicle per road sections. In the case of the Central Region, data from the MTC (^{MTC, 2013} and ^{MTC, 2016}) are taken into account -considering that 2016 was the last year in which MTC published this information- and Table 2 and Figure 2 are analyzed.

Table 2 shows the number of vehicles using the Carretera Central (PE-22, PE-3N and PE-3S) and the alternate routes in both directions. According to the classification by demand of the Manual de Carreteras of the MTC (^{Resolución Directoral N° 03-2018-MTC, 2018}), a road with an IMDA greater than 6000 veh/day, with two or more lanes of 3.60 m minimum width and a central separator of 6.00 m would be an autopista de primera clase (first class highway); that means that its typical section would measure a minimum width of 20.40 m. However, the Carretera Central still has a 6.60 m roadway, which is why it still presents inconveniences with its geometric design and, therefore, vehicular congestion problems.

It is worth noting that the flow of six-axle heavy goods vehicles, such as T3S3 trucks (three-axle tractor and three-axle semitrailer) and the box trucks used to transport concentrates to the port, has been increasing at an average annual rate of 1 to 5%. However, in Carhuamayo (between Cerro de Pasco and La Oroya) this increase was as high as 20%, while on other routes such as PE-18 in Churin (between Huaura and Ambo) the increase was 43% and on PE-20A in Yangas (between Lima and Unish) it was even 108% per year.

Table 2 IMDA 2013 - 2016 in the Central Region. 

Note: L.V.: Light Vehicle (cars and vans).

P.T.: Public Transportation (rural vans, buses and omnibuses).

F.T.: Freight Transportation (articulated , 2 and 3 axles trucks).

Source: Prepared by the author based on IMDA by type of vehicle and road sections (MTC, 2013; MTC, 2016).

Source: Prepared by the author on Google Earth, based on IMDA, and road sections (MTC, 2013; MTC, 2016).

Figure 2 IMDA 2013 - 2016 in the Central Region. 

In addition to analyzing the transfer of mineral concentrates in heavy goods vehicles, it is also possible to compare the movement of trains (locomotives and wagons) and their respective loads through the Ferrocarril Central, whose information comes from the concessionaire Ferrovías Central Andina S.A. (FVCA), which is shown in Table 3, regarding the transport of mineral concentrates (^{Ferrovías Central Andina [FVCA], 2017}).

Table 3 Freight Transport in Ferrocarril Central to Callao in 2017. 

Source: Prepared by the author based on the Reporte Acumulado de Clientes por Carga (FVCA, 2017).

Once the zinc concentrate arrives in Callao, a total of 10 037 WMT were transferred to the Refinería de Cajamarquilla by Nexa Resources Cajamarquilla S.A. to obtain zinc bars.

In 2017, the transport of copper, lead and zinc concentrate through the railroad line to the Port of Callao (Central Yard) initiated in the beneficiation plants and/or mining units in production. The main customers of the railroad, according to concentrate, were Minera Chinalco with 99% of copper; Volcan with 92% of zinc; and, in the case of lead, Milpo with 51% and Atacocha with 46%; the latter two have now become part of the company Nexa Resources, which would consequently take 97% of the lead.

Mining Logistics at the Port of Callao

Regardless of the supply chain to the mines, the logistics chain organizes the transportation to deliver the products from the beneficiation plants to the final customer. Whether using the bimodal central or other alternative routes, the purpose of the mining companies is to complete the supply chain to a refinery or to the Port of Callao, depending on the commercialization contract they have signed.

Due to the requirements with respect to mineral deliveries, most mining companies subcontract the organization of transportation to logistics operators or traders, which offer mining logistics consulting services, which consist of contracting transportation companies, picking up and moving the goods, contracting warehouses for storage, dealing with customs procedures and maritime shipments, etc. Trafigura Perú S.A.C. (formerly Cormín) and Glencore Perú S.A.C. are two examples of these logistics operators.

The Plan de Negocios del Terminal de Embarque de Concentrados (^{Transportadora Callao, 2018}) details the 2017 traffic of the feeder warehouses used in port, such as Impala Terminals with 45%, Perubar with 33%, Chinalco with 15%, and Dreyfus with 7%. This is complemented by the information from the Resumen General de Naves y Tráfico de Carga en el Terminal de Embarque de Concentrados de Minerales (^{Ositrán, 2018}), which is shown in Table 4.

Table 4 Export of Concentrates from Transportadora Callao 2017. 

Source: Prepared by the author based on the Resumen General de Naves y Tráfico de Carga en Terminal de Embarque de Concentrados de Minerales (Ositrán, 2018).

In 2017, 182 bulk carriers with an average cargo of 16 336 t per vehicle, that gave a total of 2 973 090 tonnes, were served. This represented 77% of the total ore concentrates exported in the Port of Callao and 26% of the total exported in Peru.

The main problem at the Port of Callao is that part of the concentrates is still exported in big bags inside containers, which is equivalent to 23% of total exports. For this reason, the concessionaire has been registering losses in its income statement, since the cargo handled by the Terminal is substantially less than projected.

Based on the information collected on the mining units in the Central Region and their concentrating plants, it is possible to estimate the number of heavy goods trucks that travel through this region, the number of wagons transporting ore concentrate and the exports that make use of the conveyor belt of the Terminal de Embarque de Concentrados de Minerales del Callao.

HYPOTHESIS TESTING

As it is shown in Table 2, the IMDA at Corcona control station was 6199 vehicles. If the cargo is transferred from road to rail, removing only an average of 288 trucks in both directions, the IMDA would be reduced by almost 5%. If the trucks transporting big bags, as shown in Table 4, are included in the cargo shifting, about 448 units would be replaced per day, that is, 42% of 6-axle trucks. As a result, a decongestion of heavy vehicles would occur not only on the highway but particularly in the access to Lima and the Port of Callao. Thus, the analysis shows that adequate intermodal competition of rail freight transportation reduces vehicle congestion in the mining logistics chain.