May 14, 2019 / 9:23 PM / a year ago

Brazil meatpackers face hefty $126 mln freight bill -industry group

SAO PAULO, May 14 (Reuters) - Brazil’s minimum prices for truck freight, imposed by the government in a deal to end a truckers’ strike last year, generate additional costs of 500 million reais annually ($126 million) for meatpackers, an industry group said on Tuesday.

Minimum freight prices compromise companies’ ability to deliver goods efficiently, said José Perboyre, who coordinates a logistical group within meat industry association ABPA. Perboyre was speaking at a public hearing to discuss the government’s new methodology to set truck freight prices.

“As published, the proposal penalizes efficiency. We face an additional cost of half a billion reais in the sector,” Perboyre said during the hearing at the national transport agency ANTT.

A decree in the middle of 2018 imposing mininum freight prices was one of several measures proposed by the government to end an 11-day truck driver protest earlier that year. Truckers had gone on strike to protest against higher diesel prices.

The protests blocked Brazil’s main highways and delayed shipment of goods to local markets and ports. In the meat industry, millions of birds were starved as trucks loaded with feed failed to reach feedlots in time.

The strike highlights the shortcomings of Brazil’s logistics system, which relies mainly on trucks to move about 60 percent of the country’s cargo.

Daniel Amaral, an economist with Brazilian oilseeds crusher association Abiove, also expressed misgivings about minimum freight prices.

“Our understanding is that minimum freight prices are unconstitutional and illegal,” Amaral said at the hearing.

$1 = 3.9745 reais Reporting by Alberto Alerigi Writing by Ana Mano Editing by James Dalgleish

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