• Risk of cargo transportation strikes in Brazil remains

    11 April 2019

    The first iterations of a potential new strike by truckers in Brazil came on March 25, 2019 after the Institutional Security Cabinet in Brasilia intercepted WhatsApp messages from 10-15 independently-organized chat groups articulating a desire to conduct a nationwide truckers’ strike on March 30, 2019 to address issues unresolved since May 2018. The initiative came about as a response to the expired freight table of December 31, 2018 and increased diesel prices.

    On March 27, a leader of one of the notable independent truckers’ unions, nicknamed Chorao, articulated that he would engage in negotiations with the Bolsonaro administration in an attempt to resolve the possibility of a strike. As March 30 approached, several truckers’ union remained divided and unsure to the extent to which truckers would adhere to this demonstration in comparison to the May 2018 strikes. What was confirmed, however, was the support of state-level truckers’ unions in Parana, Minas Gerais, Rio de Janeiro, Mato Grosso, Rio Grande do Norte, and Rio Grande do Sul. As of April 10, there have been no further demonstrations by additional groups, and the Attorney General of the Republic defended the extant freight table before the Supreme Federal Tribunal in a review of the regulatory measure’s constitutionality.

    The new Bolsonaro administration faces challenges

    The nationwide paralysis due to the May 2018 cargo transportation strikes, instigated over fuel prices, freight rates, and highway insecurity, started a months-long process of legislation, elections, and strike resumption threats that resulted in a series of back-and-forth. After last year’s demonstrations, which caused supply chain interruptions ranging from production halts to flight disruptions, then-President Michel Temer and the incumbent Congress instituted a series of provisional legislative measures designed to meet a considerable amount of the truckers’ demands. The most recent provisional measure, including a minimum table of freight rates for truckers, lasted until December 31, 2018. With these provisional measures having expired, one of the tests for the new Bolsonaro administration would be to solve the long-term issues facing truckers and ground cargo transportation in Brazil.

    Future demonstrations still possible

    The states that indicated union participation in the strike are critical to the unimpeded movement of cargo. Rio Grande do Sul contains several border crossings with Uruguay and Argentina; Parana contains several border crossings with Argentina and Paraguay, as well as the Port of Paranagua; Rio de Janeiro has the Port of Niteroi; and Minas Gerais, Mato Grosso and Rio Grande do Norte contain several critical north-south federal thoroughfares for the shipping of commodities such as iron ore and soy.

    As of this writing, talks of strike activity have died down, and discussions have resumed between the Bolsonaro administration and truckers’ unions. Given the novel nature of this most recent occurrence, i.e. attempting to assemble through communication via WhatsApp as opposed to through the unions, future demonstrations organized through this communication method may be planned without much notice, thus permitting less time to prepare. Therefore, those shipping by ground throughout Brazil, pending a longer term solution to truckers’ demands, should anticipate the possibility of a potential resumption of industrial action by truckers, especially during a downturn in negotiations, and should plan accordingly with contingencies for domestic and international shipping.

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