Headquartered in Argentina’s capital, Belgrano Cargas y Logística (BCyL) is a freight train operator that operates in three of the six lines of the country. Owned by the Argentine State, the operator’s network stretches across more than 8,000 kilometres of track and 17 provinces of the most productive regions of the country, mainly carrying agricultural bulk, aggregates and construction materials.
From the company, its president Ezequiel Lemos joins SmartRail World for this week’s 5 Minutes With… and talks to Dave Songer about the increasing fortunes of the Argentine freight operator, the work it still has to do and what a fully operational network would have on the productivity of his country. Oh, and he tells us about his favourite rail journey as well, of course.
Dave Songer (DS): Hi Ezequiel, thanks for getting involved, it’s a rare treat to have representation from South America. You’ve been with BCyL for two and a half years now – what do you personally like most about being involved in the rail industry?
Ezequiel Lemos (EL): As someone said during Smart Rail, operating a train is “complexity management”. It’s a highly challenging activity, which in our case is enhanced by having to transform BCyL into a world-class operator and we’re making very important investments in renovation of infrastructure, rolling stock, technology and management. The company took up the ‘path to growth’ and this year we aim to double the loads that were transported in 2015. For me, it’s very stimulating to work in an organisation that is reborn.
DS: What are the biggest challenges facing Belgrano Cargas y Logística?
EL: They lie in transforming a company whose starting point was that wages were 2.5-times the total income – it broke-even in the last five years. Other challenges include developing the values of high quality service, infrastructure, technology and world-class resources, with the values of integrity, teamwork and austerity.
DS: How do you think they will be achieved?
EL: With a very deep and detailed transformation plan that covers the fundamental aspects of the business: people, infrastructure, rolling stock and technology. This plan is the one we have been implementing for two years and is achieving a strong increase in revenues and many efficiencies.
DS: What impact do you think a properly performing freight network have on Argentina?
EL: The impact in the country is achieved with a significant reduction in logistics costs. This will cause economic development in several regions far from the ports of export or consumption areas. Currently the cost of transportation is the most important of all the costs of several important activities of the Argentine GDP. This happens because the system is based on 95% of transportation by truck.
In the case of grains, Argentina is the world's leading exporter, but freight is the major cost. There are regions of our country that can’t produce it because the cost of freight takes them out of the market. For the maize produced in Salta, for example, freight represents 50% of the value of the product. This means that corn isn’t produced in one of the most productive areas of the country. With the announcement of investments in infrastructure, several private investment projects began in the form of very important plants and ports.
DS: What is Belgrano Cargas y Logística's key business priorities? Can you share a few?
EL: We need to renovate 3,000 kilometres of roads and improve the remaining 5,000, complete the renovation and improvement of the fleets of locomotives and wagons, bring together the best team of people in the country to work for the company and also have our technology support all the processes of the organisation.
DS: Have you had to make any difficult decisions to get the organisation on the right track?
EL: Unfortunately, having received a company in crisis we had to make painful decisions. The hardest ones related to people. More than 1,000 employees of the company had to leave and that is something I will never forget. Investment decisions also involve always choosing one destination and downloading or delaying another – choosing is fundamental because not everything can be done. And choosing always means saying no to other applications.
DS: Where would you like to see Belgrano Cargas y Logística in ten years’ time?
EL: Being the best freight train company in the country, the one with the highest transport in tonnes per kilometre and the one with the best profitability.
DS: You spoke at this year’s SmartRail and gave a great presentation. For those unable to attend, what did you speak about and what did you enjoy most about the show?
EL: The presentation was about transforming the Argentine freight railway system, ‘The BCYL journey’. I presented the freight railway in the country, and its historical problems, the turnaround of its iconic player and the opportunities that stem from the new operational model. In the end, I spoke about the opportunities that open up in Argentina for different industry players after the political economic change that was led by President Mauricio Macri.
The freight train system is going to be an open access system and we see business opportunities for international industry players in the following areas:
- become a freight rail operator within a growing market
- run rail building and maintenance contracts
- manage an efficient rolling stock maintenance service
- operate the switching access to Rosario and Buenos Aires ports.
DS: What’s your favourite rail journey (anywhere in the world) and why?
EL: The “Tren de las Nubes” (train to the clouds), in Salta, Argentina is an incredible trip and winds up through the mountains. It crosses some amazing bridges before it reaches its destination, which is a charming place with the most unforgettable views and landscapes.
DS: Gracias Ezequiel, all the best with achieving your goals at Belgrano Cargas y Logística.
If you enjoyed this, why not check out the last edition of 5 minutes with… Carel Jonckheere, Smart Railway Programme Director at Infrabel.
Would you like to get involved in 5 minutes with…? This fun, informative feature gives our readership the chance to get to know more about the personalities behind the industry, what it is that inspires them and where they see the industry heading. Get in touch with Dave Songer: email@example.com to find out more.