River Barge Transport: Impact Investment Focus

The sight of overloaded trucks pumping out diesel fumes on overcrowded roads in developing countries is very familiar. It is a complex problem with no easy solutions. Producers need to get their products to market, but  too often road transport is over priced, complicated, and detrimental to the environment, due to the large numbers of old trucks on the road producing an oversized carbon footprint. Efficient and cost-effective transport is essential for economic growth in developing countries and is a matter of survival for small and medium size companies seeking to export their products.

Trucks at Bolivia Border

Trucks at the Andean Chile-Bolivia Border

Except for ocean freight, river barge is the most cost effective and environmentally responsible mode of transport. One 1’500 ton river barge can carry the same weight as 58,  26 ton trucks. In addition, container on barge transport (COB) offers almost ten times better fuel efficiency than transporting goods by road (see charts below). To move an identical amount of cargo by rail generates 30% more carbon dioxide than by barge, and trucks generate in excess of 1’000% more emissions (US National Waterways Foundation).

River Barge Transport ComparisonsRiver Barge Fuel Efficiency

Commercial inland waterway transport (IWT) is not new and is a well established part of intermodal transport systems in various countries around the world. In the USA for example, the river barge industry transports about 20% of the countries coal, moves over 60% of U.S. grain exports, and adds an estimated USD$5 billion to the economy. The use of the Rhine and Danube in Europe is well developed, and in recent years the Yangtze river in China has seen a major growth in barge operations moving approximately 80% of China’s IWT. The Mekong river system in SE Asia is less developed. The Ganga and Brahmaputra rivers in India, are under developed and hold interesting potential. In South America, the Amazon and Rio Paraguay are an important source of transport, especially for dry bulk commodities like soya beans, minerals, and container transport.

A push tug and barge transporting containers on the Rio Paraguay.

A push tug and container barge on the Rio Paraguay

The source of the Rio Paraguay begins in the Mato Grosso in Brazil and runs south over 2’600km through Bolivia, Paraguay, and Argentina to the Rio de la Plata on the Atlantic.  Rio Paraguay is an underdeveloped resource for container barge transportation, especially connecting parts of Bolivia and western Brazil to the Atlantic. Shipping a container for export by river barge from eastern Bolivia to a port on the Rio de la Plata has savings of 20-30% compared to road transport.

We are interested in this business because it can serve as a catalyst for economic, social and environmental impact. A river barge business that is well integrated into the supply-chain will strengthen the export competitiveness of small and medium sized farmers and producers. This can help secure jobs, reduce the carbon footprint, and make a significant contribution to economic development.

Chilasa is a social enterprise that originates and offers impact investment opportunities to a selected group of Angels. Please contact us to learn more about the Chilasa Angels and our range of opportunities.

Push Tug without barges taken recently on the Rio Uruguay

Push Tug without barges- taken recently on the Rio Uruguay

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