Economic risk modeling in charcoal road transportation: a case study from Brazil

The objective of this study was to conduct an economic and risk assessment of charcoal road transport, considering the effects of transport distance and the annual vehicle maintenance costs on production cost. Research involved a company in Encruzilhada city, Bahia, Brazil, operating within an 800 km radius. The average production cost increased over time due to rising maintenance costs, while gross revenue (freight value per tonne transported) remained constant. This trend allowed the identification of the break-even point, beyond which transport became economically infeasible, which occurred from the second year onward. Maintenance costs accounted for 15.88% of the vehicle’s operating cost in the first year and 24.97% in the fifth year. The truck’s operating cost was USD $64.10 per productive hour (PMH). The risk analysis was conducted for year 2, the threshold for viability. The input variables used in risk modeling were the components of vehicle operating cost, the annual interest rate, and operational cycle time. This scenario showed a 41.5% probability of the transport average production cost per tonne of charcoal to exceed the revenue paid per tonne transported. Operational cycle time was the variable that most influenced transport production cost, as indicated by the analysis of regression coefficients (0.90).