South America Calling

Two years ago, Brazil brought in a new Truckers' Law to the dismay of the farm sector.

The legislation, which obliged Brazilian truck drivers to rest half an hour for every four on the road, raised already-elevated grain freight costs by as much 10% on the long routes from the interior of the Cerrado to port.

Well, the good news is that Congress is now looking to make rules more flexible.

According to proposals in front of the lower house, truckers would be allowed to drive up to 5 1/2 hours at one time and the total hours on the road is raised from 8 to 10.

These may seem small changes, but potentially make big differences to truckers transporting grains from isolated regions of the Cerrado to port. That's because many stretches of these routes don't have adequate spots for trucks to stop and rest.

"It isn't possible to observe the current rules in some isolated regions," said Luis Antonio Fayet, logistics consultant for the Brazilian Agricultural Confederation (CNA).

As a result, since the law was enacted in 2013, many haulage firms have been hit by multiple suits, obviously affecting costs.

The new rules were voted in the lower house in April, amended in the Senate and now are again in front of the lower house for final approval.

"It is important that the farm industry mobilizes to get this legislation through," said Fayet.

The new law would be good news at a time when grain margins are tight.

More than 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 up to three times those in the U.S.

Alastair Stewart can be reached at Alastair.stewart@dtn.com

(ES)

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