Feb 26, 2015

Trucker Strike in Brazil Becoming Very Serious

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

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.