Marcon Logística Portuária

Brazil risks truckers’ wrath with fresh minimum freight U-turn

It has been informed by GLOBO Journal  and announced by TV news that the Brazilian government has revoked a new minimum freight rate just hours after releasing a revised version as it attempts to stave off another crippling truckers’ strike and appease the agricultural sector, which had already started filing legal cases challenging the new rates.

After several days of negotiations with trucking unions, President Michel Temer signed into law provisional measure 832 on May 30, which included the establishment of a national minimum freight rate as a concession to get truckers to release their grip on the country’s highways.

The publication of the new rates sent ripples of concern through Brazil’s farm sector, with big groups like the National Farm Federation (CNA), the Vegetable Oils Industry Association (Abiove) and Soybean and Corn Producers’ Association (Aprosoja) saying that the government intervention in the private sector was casting the farm export industry into chaos.

The new rates threatened to place an unsustainable burden on the industry, adding $30-40/mt to journeys according to market sources.

Large agricultural companies have been foregoing normal deliveries over the surge in freight rates under the new norm and port cash prices were being affected, though the weaker real to the dollar and political uncertainty ahead of the October elections were helping to push down premiums for now.

On Tuesday, Agriculture Minister Blairo Maggi said the original draft of the minimum rates would be revised by the transportation agency ANTT, which published new rates late on Thursday night, only to have the Transport Minister Valter Casimiro announce hours later that the updated version would be revoked.

After meeting with truckers’ unions last night, which were threatening to resume their strike again, Casimiro said in an interview broadcast on social media (Facebook) that the original rates would remain in force until the ANTT corrected “some problems detected in the recent revision”, without detailing the issues. Saying only that “new questions over the rates have arisen that need to be corrected.”

Meanwhile, the agricultural sector has already brought the fight to the courts, with a judge in northern Brazil granting an injunction against the implementation of the new minimum rates, and law firms representing large clients of the transport sector are forecasting a flood of legal challenges to the minimum rates.

Reverting on the matter when have further and clear information.

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06.09.2018

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