Striking out: the long-term impacts of Brazil's trucking strike

Traffic caused by Brazil's recent truck strike.  (Image: Shutterstock)

Traffic caused by Brazil's recent truck strike. (Image: Shutterstock)

Although Brazil’s massive truck strike has come to an end, the ramifications are still rippling through the country’s supply chain, and it looks like it could take certain industries up to a year to recover. FreightWaves covered the extent of the strike in the midst of the chaos on May 30.

According to Platts, the strike “concluded in late May, while a longer-lasting pay deal remains to be settled.” Reuters called the strike “slow to unwind even after the government agreed to subsidize diesel prices in a bid to end protests.”

Industries across the country are adjusting in the wake of the strike, and everything from agriculture to iron ore have been impacted.

Platts, in communicating with Vale, one of Brazil’s iron ore miners, noted that while “Brazil's trucker strike had a "limited impact" on Vale's operations,” the way that iron ore was transported did have to shift to accommodate the strike.

“During the strike, iron ore miner Vale partly redirected its shipments from its private terminal at Itaguai port, in Rio de Janeiro state, to its terminal at Tubarao, in Vitoria port, Espirito Santo state.” Additionally, "[Vale] transported starch for iron ore production through railways, something that company has never done before,” Vale stated.

Brazil is also “the top global exporter of soybeans, sugar, coffee and chicken,” all of which have been impacted by the strike. “With 1,400 trucks on the road with beef and chicken at any given moment and thousands more transporting foodstuffs, the loss of perishables will also be in the millions of dollars,” said Brazil’s agricultural minister Blario Maggi. Reuters notes that it “could take farmers six months to a year to recover from the impact of the protest.”

At least 150 sugar mills closed due to the strikes, and the strike is said to have “helped drive [the] international benchmark Arabica coffee futures on ICE up 2 percent to just above $1.20 per lb last week.” According to Reuters, “The strike came just ahead of Brazil’s main arabica harvest,” and “the Brazilian coffee industry is losing an estimated 70 million reais ($18.75 million) per day due to the protests, trade group Abic said.”

The strike, which “stymied activity across the nation and led to disruption in iron ore mining and exports, as well as hitting other commodities such as fuels and agriculture” is expected to continue to impact Brazil for the foreseeable future.

Robert Grantham, "a consultant for Solve Shipping based in Navegantes," is quoted by JOC as saying that “bringing the country to a standstill for 10 days has been an absolute disaster for the economy and it will take months before the supply chain gets back to normal.”

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