Brazil companies mull buying trucks to avoid higher shipping fees
August 06, 2018, 01:09:00 PM EDT
By Reuters
By Alberto Alerigi
SAO PAULO, Aug 6 (Reuters) - Manufacturers of heavy trucks have been fielding inquiries from Brazilian companies looking into purchasing their own fleets to get around higher mandatory pricing for independent truckers who staged a nationwide strike in May against high fuel costs and low compensation.
Volvo AB and the Mercedes-Benz truck unit of Daimler AG have received inquiries from big companies looking into owning and operating their own truck fleets, representatives for the truck makers said.
Truck sales climbed above 38,000 vehicles in the first seven months of this year, up nearly 49 percent from the same period of 2017, automakers group Anfavea reported on Monday.
"Everyone is preparing, asking for quotes, calculating scenarios, exploring other (shipping) models," said Roberto Leoncini, vice president of bus and truck sales at Mercedes-Benz do Brasil.
Some industry observers have warned that a rush to expand proprietary fleets could exacerbate the market pressures that set off protests in late May by independent truckers who complained of high diesel prices and low freight rates. Major highways were paralyzed for nearly two weeks, leading the government to promise more predictable fuel pricing and a table of minimum freight prices.
In recent years, publicly subsidized credit has already boosted the number of heavy trucks on Brazilian roads, unsettling the shipping market and weakening the bargaining power of independent truckers.
Brazil'sSupreme Court has called an Aug. 27 hearing on the constitutionality of a minimum freight pricing table. The court's ultimate ruling on the hastily designed rules should help companies settle on whether to buy their own fleets.
Brewer Ambev SA, a subsidiary of Anheuser Busch InBev NV has been evaluating alternatives to deal with the proposed freight table, but Chief Financial Officer Fernando Tennenbaum said last month that it was too early to decide.
Volvo said in a statement it has received "increased inquiries by some shippers, but so far those contacts have only been for studies and evaluations, without any impact on sales."
The head of Latin American grains and food processing for Cargill Inc, one of Brazil's biggest exporters, said last month the new freight rules could force more companies to buy or expand their truck fleets.
Leoncini said Cargill had explored the possibility of buying 1,000 Mercedes-Benz trucks.
