Brazilian Truck Driver Blockade Escalates

Published Feb 24, 2015 5:26 PM by The Maritime Executive

Brazilian truck drivers protesting high fuel prices for a seventh day on Tuesday interrupted supplies of diesel and raw materials across the country and threatened to hold up grains exports at ports in the middle of a record harvest.

Demonstrations that began as isolated protests have spread to at least 10 states, intensifying despite government threats of heavy fines for truckers blocking roads.

President Dilma Rousseff called an emergency meeting, hoping to defuse the strikes, which threaten the agricultural exports Brazil needs to close a trade deficit and avoid a deeper economic downturn.

Highway operator Ecovias said truck drivers had blocked the Port of Santos, the largest port in the country. Railway operator America Latina Logistica SA said the truck strike was delaying shipments.

The strike has led to a shortage of diesel fuel in parts of Brazil's bountiful center-west grains belt. Some farmers have temporarily halted soy harvesting machinery for lack of fuel.

"We could end up losing some of the harvest," Antonio Galvan, president of the Sinop Farmers Union in top soybean producing state of Mato Grosso, told Reuters. "Without diesel, you can't do anything."

Although the strike has hurt grains deliveries at Brazilian sea ports, the loading of ships with soybeans remained on schedule for the time being.

Paranagua, Brazil's No. 2 port, said it had enough grain to fill ships now loading, but worried a sharp drop in truck deliveries of soy would eventually disrupt the flow of vessels.

A Paranagua representative said only 45 trucks were waiting at the port on Tuesday, compared to 900 on an average morning.

Soy futures prices spiked early on Tuesday, but were lower by the end of the session on talk that government efforts and fines would disperse the protests.

On February 18, truck drivers started restricting the flow of goods along BR 163, the main highway running through Mato Grosso, to protest high fuel and toll prices, poor roads and changes to rules governing trucking.

The spontaneous spread of the demonstrations without organized help from unions has complicated government efforts to negotiate with protesters.

National labor union CUT weighed in on Tuesday afternoon, saying the government was willing to negotiate and recommending truck drivers and transport firms suspend the strike. The union's entreaty had little immediate effect.

"There is no sign the blockage in Sorriso (Mato Grosso) and the other towns in the state is ending," said a representative for Rota do Oeste, the consortium that operates the BR 163 highway on Tuesday.

Brazil is the world's leading supplier of sugar, coffee, orange juice, beef, poultry and soybeans.

The protests are starting to slow economic activity. The world's largest poultry exporter BRF shut two factories for lack of raw materials.

Truck drivers outside Belo Horizonte interrupted the supply of auto parts to a Fiat Chrysler Automobiles factory, which canceled shifts on Monday and Tuesday, a spokesman said. The plant's capacity is about 3,000 Fiat vehicles per day.

($1 = 2.86 reais)