After four days of blockades, Brazilian truckers have managed to bend the federal administration into accepting their demands for cheaper fuel. Michel Temer’s government will subsidize diesel from this point forward, something that will cost billions to an already cash-strapped administration. While part of the truckers’ victory can be attributed to the weakness and incompetence of the sitting cabinet (and its president), the truth is that Brazil is hostage to truckers.
Over 60 percent of all cargo in Brazil is transported by trucks. If we exclude crude oil and iron ore, which are not transported by road, that rate spikes to 90 percent. In an ideal system, trucks shouldn’t account for more than one-third of cargo transport.