Brazil adjusts controversial freight rates

Brazil's national land transport agency (ANTT) published new guidelines regulating minimum truck freight rates.

The new resolution will substitute the previous methodology for determining minimum freight rates, which was issued in May 2018 following a national truckers' strike.

The ANTT held five public hearings across Brazil and received more than 500 contributions as part of the process of rewriting the way the rates are calculated.

The new methodology creates 11 categories of cargo, with more precise minimum fees per kilometer transported.

The minimum freight rates will be adjusted twice a year, in January and July. The rates can also be increased when diesel prices rise by 10pc during the six-month period between adjustments, as was previously the case.

The agency plans to continue to work on the methodology over the next six months, and will take additional factors into consideration, including the transport of special cargo, partial loads, backhaul rates and diesel prices.

The agency maintained fines for failure to comply with the freight rates, with a minimum fine of R550 ($134) and a maximum of R10,500.

At least 60 agricultural and industry groups filed legal appeals challenging the new minimum freight rates law. The appeals are on hold though, and the minimum rates will remain in place as the Supreme Court considers a handful of the cases.

While the agency continues to work on methodological improvements, the court has scheduled a hearing for 4 September to rule on whether the minimum rates violate the constitution.

In a related development, truck sales in Brazil climbed by 45pc in January-June 2019 to 46,867 units from 32,337 in the same period of 2018, the national federation of vehicle distributors (Fenabrave) said.

Medium to large-sized companies, especially in agroindustry, have been expanding their own truck fleets as a hedge against a share increase in their freight costs.

June truck sales rose by 36pc to 7,804 units.