Minimum freight table: a Trojan horse for truckers?

. Jan 17, 2020
Brazilian truckers blocks a during a strike to reduce oil prices. Photo: Antonio Scorza Brazilian truckers blocks a during a May 2018 strike to reduce oil prices. Photo: Antonio Scorza

Back in May 2018, Brazilian truckers disgruntled by rising fuel prices went on strike for 11 days—generating fuel and food shortages in several urban centers and causing tens of billions of dollars in losses. The then-Finance Ministry—since rebranded as the Economy Ministry—estimated the losses at nearly BRL 16 billion, caused by drops in industrial output and tax collection. The agribusiness sector was one of the worst-affected, with millions of livestock starving to death and millions of liters of milk being left to spoil.

To bring the strike to an end, then-President Michel Temer decided to publish a reference table including minimum prices for cargo transportation services, seen as a way of securing better working conditions for truck drivers. However, the specter of future strikes has never quite gone away, with truckers’ unions complaining that the reference table hasn’t been properly enforced.

</p> <p>In an attempt to avoid further industrial action—which would lead to catastrophic consequences for the economy—the Jair Bolsonaro administration has just published a new reference table, increasing the minimum prices by 11 to 15 percent.</p> <hr class="wp-block-separator"/> <div id="buzzsprout-player-1078994"></div> <script src="https://www.buzzsprout.com/299876/1078994-43-brazil-s-infrastructure-woes.js?container_id=buzzsprout-player-1078994&amp;player=small" type="text/javascript" charset="utf-8"></script> <hr class="wp-block-separator"/> <p>The new rules say that rates for cargo transportation should account for truck drivers&#8217; expenses on food, lodging, and highway tolls. It also says that minimum prices must be updated when fluctuations in <a href="https://brazilian.report/newsletters/brazil-daily/2019/07/23/brazil-plan-dependence-diesel/">diesel prices</a> exceed 10 percent, up or down.</p> <p>Truckers hold immense power in Brazil, as they are responsible for moving close to 60 percent of all cargo around the country—<a href="https://brazilian.report/money/2018/05/25/truckers-protests-brazil-fuels/">90 percent if we exclude iron ore and crude oil</a>, which are not transported on roads. Moreover, the segment is highly decentralized, making any kind of collective negotiation very difficult. As a matter of fact, the government had tried to publish a new freight table last year, but truckers weren&#8217;t keen on the proposal and threatened another strike.</p> <p>And the government has shown, time and again, that it has no definitive solution for the problem. In April 2019, President Jair Bolsonaro blocked a 5.7-percent bump in diesel prices to pander to truckers—as an immediate result, state-run oil and gas giant <a href="https://brazilian.report/newsletters/brazil-weekly/2019/04/13/oil-gas-petrobras-lost-brl-32bn-in-one-day/">Petrobras lost BRL 32 billion in market value</a> in one single day.</p> <h2>Unintended consequences</h2> <p>Agricultural producers and industrialists are adamantly against the minimum freight table—as it increases their costs on cargo transport, expenses which are then passed on to the consumers. A survey by the National Confederation of Industries shows that, since the first version of the freight table was approved, industrial goods have gotten 5 percent more expensive for consumers.</p> <p>Moreover, big transport companies have started to increasingly rely on their own fleet—reducing job opportunities for self-employed truckers. Meat giant JBS, for instance, announced in August 2018 that it had purchases 360 trucks to transport its products. Commodity producer Amaggi Group, meanwhile, has <a href="https://revistagloborural.globo.com/Noticias/Empresas-e-Negocios/noticia/2018/11/globo-rural-grupo-amaggi-compra-frota-de-300-caminhoes-para-escoamento-de-graos.html">300 trucks of its own</a>. Truck sales have spiked 47 percent over the past 12 months.</p> <p>The truck drivers themselves, meanwhile, are hardly optimistic about the minimum freight price table. Polling from the National Transport Confederation (CNT) shows that almost 40 percent of truckers do not believe the measure covers their expenses, while another recurring complaint is that the minimum pricing is not enforced, due to a perceived lack of personnel within oversight agencies.</p> <p>The main demands of truck drivers included a reduction in diesel prices, improvements to highway infrastructure, and increased security—none of which have been effectively addressed by the government. The heterogeneity of the profession is also a stumbling block toward any future resolutions, with major truckers&#8217; unions disagreeing over their support for the minimum price tables.</p> <p>The Supreme Court is set to <a href="https://brazilian.report/power/2020/01/02/expect-brazil-supreme-court-2020/">trial a case</a> this year which questions the validity of the minimum freight rates. A trial date has not been settled as the case’s rapporteur, Justice Luiz Fux, was waiting for a “definitive solution” between the government and truckers before starting to judge the merit of the rules.

 
Brenno Grillo

Correspondent in Brasília. Journalist since 2012, is especialized in cover Law and Justice. Worked in comunication agencies untill be choosen to be an intern in O Estado de S.Paulo. Also worked in Portal Brasil and political campaigns. His last job was in ConJur, website especialized in Justice news.

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