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January 21, 2020

Truckers want More than the 11-15% Increase in Freight Rates

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

The Brazilian National Land Transportation Agency (ANTT) last week published the new minimum freight rates for Brazil, which will be in effect for the next six months. They increased the minimum freight rates by 11-15% depending on the type of cargos being transported. The President of the Brazilian Association of Independent Vehicle Operators (Abrava), feels this increase still does not cover their costs and he is pushing for an additional 15-18% increase above those issued by ANTT the next time the rate is adjusted in July.

The new minimum freight rates, which take effect this week, include regulations that those who purchase the freight are also obliged to pay for the trucker's backhaul including salaries, lodging, and meals specifically for trucks that are prohibited from transporting different products such as tankers transporting fuel.

Since the minimum freight rates are readjusted every six months, Abrava is not advocating an immediate change in the minimum rates, but they want the additional 15-18% increase the next time the rates are readjusted.

The trucker's immediate concern is defending the constitutionality of the minimum freight rates, which is supposed to be decided by the Brazilian Supreme Court in the near future. They are also pushing for the lowering of the ICMS circulation tax on diesel fuel, which would help to lower their costs.