February 26, 2015
Trucker Strike in Brazil Becoming Very Serious
Protests by truck drivers in Brazil expanded on Wednesday to 13 Brazilian states with many of Brazil's major highways blocked to traffic. As soon as the local police manage to open one stretch of highway, protestors block another stretch. President Rousseff and federal officials are scrambling to resolve the situation, but a lack of organized leadership among the protestors makes it difficult to know who is in charge or who to negotiate with.
The lists of grievances of the truckers continues to grow and they now include: increased fuel prices, reduced freight rates, high taxes, high tolls, lack of margins, the new "truck driver law" that reduced driving time, poor road conditions, lack of security on the highways, slow progress on improving highways, lack of rest areas for truckers to pull over to adhere to the "truck driver law", etc.
The federal government is scrambling to try come up with a resolution but a lack of cohesive leadership among protestors makes negotiations very difficult - they don't know who to negotiate with.
President Rousseff and the Minister of Transportation have both stated that reducing diesel fuel prices is not an option and setting minimum freight rates is not possible. These are the two principal grievances of the protestors, so it is hard to see where they will have the common ground needed for a resolution.
These protests have really caught everyone off guard and they have been surprisingly widespread and effective in bringing attention to their cause. These demonstrations are very different than the "occupy movement" that occurred in Brazil prior to the World Cup. Members of the "occupy movement" were upset at general government spending on sport stadiums instead of education, housing, health needs, sanitation, etc. Those demonstrations did not have a focus other than general dissatisfaction with the government and political leaders.
The current protests are focused on specific items such as fuel prices and freight rates and I think that is why these protests seem to have more "legs" than past movements.
How long this lasts remains to be seen, but it is becoming very serious and it has already lasted longer than most people expected. Every segment of Brazilian society is being impacted one way or another by these protests and below I have listed some of the highlights.
- The arrival of grain and soybean meal at the Ports of Santos and Paranagua have been greatly reduced. Paranagua usually receives 900 grain trucks per day, but on Tuesday there were just 45 trucks and on Wednesday there were 75. The entrance to the Port of Santos was blocked Tuesday afternoon, but police managed to reopen the entrance after using tear gas and rubber bullets to break up protests. The Port of Santos usually receives 10,000 trucks per day and protestors vowed to close the port again for a period of three days.
- Grain exports from Brazil have not been impacted as yet, but without grain arriving at the ports, loading activity will eventually slow down.
- A Fiat assembly plant in Minas Gerais closed down for lack of parts and 6,000 workers were sent home.
- The giant JBS meat processor closed eight processing facilities for poultry, swine, and beef due to lack of animals.
- Farmers are dumping milk due to a lack of milk haulers.
- Dairy processors are shutting down due to a lack of milk.
- Soybean crushers are closing down due to a lack of soybeans.
- Feed mills are closing down due to lack of corn and soybean meal shipments.
- Hog and poultry operations are out of feed and no way to obtain more.
- Many gas stations are out of fuel and there are long lines to get remaining fuel. Prices have skyrocketed for reaming inventory.
- Some farmers in northern Mato Grosso have stopped harvesting soybeans due to lack of diesel fuel to run the combines and other farmers will run out this week.
- Mato Grosso soybean harvest is 35% complete compared to 47% last year and the harvest pace will slow even more.
- Some farmers in Mato Grosso do not have fertilizers to plant their safrinha corn crop.
- Some truckers that tried to "run the blockade" have had their loads of soybeans dumped on the highway.
- America Latina Logistica is loading fewer trains with soybeans at the Rondonopolis Intermodal grain complex due to lack of supplies. This railroad supplies soybeans and corn to the Port of Santos.
- In more rural areas, all elective surgeries have been postponed due to a lack of medicines.
- While some highways are opened by local police, protestors move on and close other sections of the highways.
- Local judges have imposed fines of R$ 5,000, R$ 10,000 even R$ 100,000 per day, but protestors ignoring their rulings.