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March 9, 2015

Brazilian Truckers to decide if Concessions avert another Strike

Now that the 13-day truck driver strike has ended in Brazil, various industries in the ag sector are slowly returning to more normal operations, but it could take up to two weeks before everything is back to normal, that is if there are no more work stoppages in the future. Truckers ended their strike earlier last week when negotiations between the government and transportation organizations got underway in Brasilia. Protest leaders have said that it is possible they may resume their strike on Tuesday, March 10th if the negotiations are not successful, so stay tuned.

The change the truckers wanted most was for the diesel price to be lowered, but the government has said repeatedly that the price of diesel cannot be reduced. The government is desperate for the revenue generated by diesel sales, so I do not expect them to compromise on that issue. But, I do think the government has compromised on enough other issues to maybe satisfy the truckers including:

  • There is the possibility that a minimum freight rate will be established, which was one of the demands of the truckers.
  • Tolls in Brazil are based on the number of axles on the truck and the government decided that truckers did not have to pay the toll for any axle that is suspended when they are empty.
  • The newly reworked truck driver law allowing for more hours behind the wheel and more flexibility concerning mandatory rest periods has been accepted by the President instead of being vetoed as previously threatened. Truckers like how the law has been reworked.
  • Truck payments will be suspended for 6-12 months for truckers that purchased their truck with low interest loans from government banks. While this is not the same as lower diesel prices, it does give the truckers a little more breathing room financially speaking.

It remains to be seen if these concessions are enough to keep the drivers working. If they do decide on another work stoppage, the general public will not be nearly as sympatric to their cause as they were several weeks ago. The two weeks of blockades hurt a lot of Brazilians financially and it caused a tremendous amount of inconvenience for the general public. If the public perceives that the drivers got some of their demands met, but they still went back out on strike, they will not support another episode of blocked highways.