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December 26, 2019

Brazilian Gov. to help Independent Truckers form Cooperatives

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian government is launching a program that is aimed at helping independent truck drivers form cooperatives. It is estimated that the new program could help as many as 100,000 independent Brazilian truck drivers become a part of new cooperatives. The new program is called Roda Bem (Drive Well) and they hope to have it up and running in 18 months.

The program will offer 100 basic kits for drivers interested in forming cooperatives. The kits will include technical assistance on how to set up a cooperative including office equipment and software in addition to administration, legal, and how to set up fuel depots, etc. This help will also be available for existing driver cooperatives that want to expand their membership.

According to the National Land Transportation Agency (ANTT), there are approximately 1.94 million trucks on the roads of Brazil. Of the total, 703,000 are independent truckers, but only 26,000 are members of a cooperative.

Large transportation companies in Brazil are much more profitable than independent operators due to the economies of scale. The companies can offer higher wages and benefits to drivers because they have reduced costs for such things as fuel, lubricants, tires, and parts. The goal of the Roda Bem program is to create new cooperatives that can reduce costs and offer better lives for their members.

One of the goals of the program is to take advantage of an ever more digital landscape in the transportation sector. A cooperative with a centralized office is better suited to digitally connect buyers of freight with truck drivers than a single independent driver.

The independent drivers also realize there was a lot of blowback from their nationwide strike in the spring of 2018 that brought the Brazilian economy to its knees in a matter of days. In response to that strike, numerous large companies announced that they were going to form their trucking fleet so that they were not held hostage to the demands of the independent drivers. Forming a cooperative is viewed as a way to remain competitive in the transportation sector.