South America Calling
Alastair Stewart South America Correspondent

Monday 09/24/12

Brazil's New Truckers Law to Add to Logistics Chaos

Farm leaders fear that Brazil's ports and roads will descend into chaos with the arrival of this year's potential bumper soybean and corn crop.

Long-term underinvestment in infrastructure is the underlying cause, and I explore this theme in my upcoming Brazil Crop Outlook series, but a new factor is set to exacerbate the problem this year: the new Truckers' Law.

Over 60% of Brazil's massive farm output is transported by truck, often over distances as long as 1,000 miles along precarious roads. This unsatisfactory arrangement contributes to the fact that Brazilian soybean transport costs are four times those in the U.S.

Now the onerous cost of road transport is set to increase with the introduction of a new law, which forces Brazilian truck drivers to rest half an hour for every four hours driven and take a continuous 11-hour rest in every 24 hours from March 2013.

The change will make it even harder to find trucks to take produce to ports and the pork and poultry industries of the south in the immediate post-harvest period.

"If the law were introduced in a normal period, there would be a 30% increase in the costs of logistics. But in a year such as 2013, with a record crop, there simply won't be sufficient trucks available," said Fabio Trigueirinho, general secretary at the Brazilian Vegetable Oils Industry Association (ABIOVE).

Farm leaders are seeking a six-month delay in the introduction of the law.

In road safety terms, this initiative is commendable. Brazilian truckers are renowned for driving insane shifts, and for using stimulants to keep themselves awake. The restriction will likely contribute to reducing the high indices of accidents on Brazilian roads.

But whoever witnessed the difficulty Mato Grosso farmers had in finding lorries to deliver second-crop corn to port or poultry farm this winter will be concerned about this further restriction on truckers.

However, in Brazil, many laws are passed but not all are applied. This may be one that isn't enforced, said Luis Antonio Fayet, logistics consultant for the Brazilian Agricultural Confederation (CNA).

"There are places in the interior of Brazil where there isn't anywhere to stop every four hours. This is a European law that doesn't necessarily work in a Brazilian context and may not end up applying," he said.

Whether the law is enforced or not, it's just another headache for trading companies, crushers and farmers wondering how they are going to transport the coming crop.


Posted at 2:34PM CDT 09/24/12 by Alastair Stewart
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