Brazil’s House approves regulation for cargo transportation

. Jun 21, 2018
cargo transportation brazil Cargo transportation is now subject to different rules
cargo transportation brazil

Cargo transportation is now subject to different rules

Brazil’s House has approved a bill that creates a regulatory framework for cargo transportation in the country. It was part of the government’s laundry list of promises made to independent truckers at the end of May to convince them to bring a halt to their 10-day strike, which pushed the country into shutdown mode, with most big urban centers experiencing fuel and food shortages.

Among its provisions, the new legal framework establishes that the relationship between cargo transportation companies and independent truckers cannot be considered as a standard labor relationship. Even when truckers don’t have their own company and are directly hired for jobs, they won’t be able to claim labor rights from the companies.

</span></p> <p><span style="font-weight: 400;">One thing missing in the bill was a new method for calculating freight prices, which was one of the drivers&#8217; demands. That&#8217;s because the government issued, on May 30, a reference table for minimum freight prices. Dozens of companies filed lawsuits shortly afterward, saying that the price control is illegal and would punish consumers. The Supreme Court has yet to rule on the matter.</span></p> <p><span style="font-weight: 400;">Below, we break down the main topics of the new legislation approved by the House. The bill now goes to the Senate, before being signed into law by President Michel Temer.</span></p> <h3>Safety requirements and regulations for cargo theft</h3> <p><span style="font-weight: 400;">The bill creates a set of safety requirements (such as mandatory travel insurance and an electronic registration of routes) to be implemented, regulated and supervised by the Ministry of Labor and the National Road Transportations Agency (ANTT). </span></p> <p><span style="font-weight: 400;">If the law passes without further changes, it will allow individual or collective bargaining agreements on the conditions of transportation contracts, such as losses and damages, payment dates, form of payment and subcontracting. In cases which involve cargo robberies and theft, the drivers will have the right to be paid by the contractor in full. </span></p> <p><span style="font-weight: 400;">Party leaders struggled to reach an agreement owing to controversial topics such as a proposed amnesty to the truck drivers who were fined during the May strike. The issue will be addressed in other regulations, representatives said, possibly a provisional measure. </span></p> <h3>Traffic infractions</h3> <p><span style="font-weight: 400;">One of the core points of the bill is doubling the tolerance for truck drivers, who will now be able to commit more traffic infractions. In Brazil, drivers are subjected to a point-scoring system. The more severe an infraction is, the more points the driver receives on his/her license &#8211; ranging from 3 (light infractions) to 7 (very serious infractions) points. </span></p> <p><span style="font-weight: 400;">If a driver reaches 20 points over the course of one year, he or she loses the right to drive a vehicle and will have to undergo the process of getting a new license from the beginning. What the new bill states is that truck drivers have, instead of 20, 40 points of tolerance.  </span></p> <h3>Brazil is dependent on trucks</h3> <p><span style="font-weight: 400;">Two-thirds of <a href="">cargo transportation</a> in Brazil is made through roadways. If we exclude crude oil and iron ore, which are not transported by road, that rate spikes to 90 percent. In an ideal system, however, trucks shouldn’t account for more than one-third of cargo transport.</span></p> <hr /> <p><img loading="lazy" class="alignnone size-large wp-image-4463" src="" alt="cargo transportation brazil" width="1024" height="260" srcset=" 1024w, 300w, 768w, 610w, 1180w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <hr /> <p><span style="font-weight: 400;">Their May strike was a protest against Petrobras&#8217;s <a href="">pricing policy</a>. Since 2016, fuel prices by Brazil&#8217;s state-owned oil and gas company (which practically monopolizes oil refining in the country) have been pegged to international oil prices. Between 2017 and May 2018, price updates happened daily. </span></p> <p><span style="font-weight: 400;">Unable to resolve the crisis, the federal government caved to nearly every demand by the truckers and announced a subsidy policy for diesel prices, which will cost at least BRL 12 billion on this year&#8217;s budget.</span></p> <p><span style="font-weight: 400;">Despite the negative effects on the population, the strike &#8211; and the steep rise of the U.S. Dollar &#8211; has helped the federal administration&#8217;s finances. The Central Bank will register an estimated profit of over BRL 100 billion &#8211; which will certainly help President Michel Temer&#8217;s administration meet the primary budget deficit without breaking fiscal laws.

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