Measure that makes freight more expensive can weigh on the consumer’s pocket, says CNA advisor
“Today, due to the lack of adequate infrastructure, the lack of port capacity in some regions, the cost of transport is up to 40% higher than the main competitors. This generates inefficiency in the economy, and within the country this is reflected in the cost of our food. Outside the country, as prices are determined by the International Stock Exchange, these costs end up being assimilated by the rural producer and the entire chain involved”, he explains.
In the original text of Provisional Measure 1153/2022 there was only one mandatory insurance to cover cargo transportation (accident coverage), the others were optional (theft coverage and third party damage coverage). But an amendment to the MP approved in the Chamber of Deputies made the three insurances mandatory for self-employed or cooperative carriers.
Federal deputy Domingos Sávio (PL-MG) classifies the measure as interventionist and harmful to market freedom, due to the risk of increasing the cost of transport.
“Each entrepreneur has to be aware of what he is doing. You cannot impose a cost that would be extremely onerous, especially for the Brazilian agro. Because Brazil is one of the biggest exporters of food in the world and essentially depends on cargo transportation. If you establish a regulation of this nature in the transport of cargo, it will impact the Custo Brasil, it will make Brazil less competitive for exports and it will weigh on the pockets of the Brazilian consumer when this food is for the Brazilian consumer”, he points out.
cargo transportation
Agribusiness is one of the sectors that most boost road freight transport. Data from the survey carried out by Transportebras, startup considered the largest cargo transport platform in Latin America, show that, of the 10 million freight transported in 2022, 36.3% of them were for agribusiness products, the most representative category on the platform.
According to the CNA advisor, the cargo transport sector should also suffer impacts. One of the points of the provisional measure established the exclusivity of contracting insurance by carriers, even if the shippers, that is, the owners of the goods, had more conditions to negotiate prices.
“The carriers themselves start to receive less due to these economic inefficiencies. Because we know that an autonomous transporter acts alone. The shipper, on the other hand, often makes thousands of transport transactions per year, so from the moment he is allowed to choose the cargo insurance, he can negotiate, given the volume of demand he has with the insurer, at a cost of minor insurance. Something that the self-employed transporter, acting alone, cannot have that bargaining power to negotiate a smaller transport insurance”, he points out.
Elisangela Lopes also points out that the ideal would be to have a conversation between carriers and shippers to reach a final adjustment in the provisional measure, since both depend on each other.
“There has to be a conversation between the actors involved, both cargo carriers and shippers, so that a negotiation can be reached with the aim of reducing transport costs. With this reduction, everyone wins: the carriers, because they are able to reduce their costs and earn more income. And shippers too, who manage to be more competitive by providing cheaper products both on supermarket shelves and on the international market”, he argues.
Provisional measure 1153/22 is now awaiting reading in the Senate and should be deliberated by June 1st.
MP that transfers insurance contracting to cargo carriers may increase costs
By Brasil 61
