Changes in contracting cargo insurance may increase the Brazil Cost

The original text transferred to the carriers the exclusive competence to take out insurance. But, after criticism of the measure, this item was removed from the MP by the rapporteur, deputy Hugo Motta (Republicanos-PB), with the argument that the discussion was incompatible with the speed of an MP, due to the complexity of the subject.

MP that transfers insurance contracting to cargo carriers may increase costs

Even with the withdrawal of insurance contracting exclusivity by the carrier, the provisional measure may impact the increase in Cost Brazil. An amendment to the provisional measure made it mandatory to take out three types of insurance for individual (self-employed) or cooperative carriers.

• civil liability insurance for road freight carriers, to cover losses or damages caused to transported cargo as a result of road accidents;
• civil liability insurance for the road freight carrier, to cover theft of cargo; It is
• civil liability insurance for vehicles and property damage and personal injury, to cover damage caused to third parties by the motor vehicle used in road freight transport.

According to economist Aurélio Trancoso, inputs, which are already on the rise, are even more expensive with the costs for the product to reach the final consumer.

“Insurance is important, but it will also play into the price of the final product. So, when the entrepreneur prices the price of the product, he will put everything that will depend on the product to reach the shelf: from the time an input in industrial production comes out, price of labor, price of water, energy, mileage driven, the price of fuel and tires. Often the product that is produced in the field, its box is cheap, but transport will be more expensive due to the distance it will travel, so everything is pre-established in relation to the distance it will travel and the depreciation of the equipment it is transporting”, explains.

The president of the Parliamentary Front for Competitive Brazil, deputy Arnaldo Jardim (Cidadania-SP), is against the changes proposed by the provisional measure.

“Basically, it will be an additional cost for the carrier and the carrier will pass this on to the cost chain, so it will be left over to the consumer. This proposed insurance, in our opinion, is just another additional cost with no practical effect. In addition to making it difficult for the self-employed, it puts pressure on large companies that own a good part of transport and can, with that, become almost monopolists. These companies will focus even more and take away this competitive aspect as well, which is very important, ”he says.

Other MP points

According to the approved text of the MP, both the carrier and the owner of the goods will be able to contract other insurances, in addition to the three considered mandatory. Insurance for losses due to accidents and theft and the like must be linked to Risk Management Plans (RMP), defined between the carrier and the insurer.

The original text of MP 1153 prevented the shipper from forcing the carrier to carry out the safety specifications required in the Risk Management Plan (RMP). This would be problematic for sectors of the economy that deal, for example, with the transport of dangerous products, which require special and strict care in transport, in order to avoid accidents and risks of environmental impacts and the health of society.

According to the approved text, if the transport service contractor wants to impose additional obligations or measures in the transport operation or in the management of the service, it must pay for the expenses involved.

Provisional measure 1153/22 is now awaiting reading in the Senate and should be deliberated by June 1st.