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Recession Sends Truck Cargo Transportation Plunging in Brazil

06/04/2018 - 12h00

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ÉRICA FRAGA
FROM SÃO PAULO

The number of trucks on Brazilian roads today is 26% below that registered between 2003 and 2007, shows a study by A.C.Pastore & Associados consultants.

Due to the impact caused by the collapse of the demand for cargo carriage amid the recession, on top of an already excessive number of trucks that were made available through years of subsidized loans, granted by the government to the cargo transportation sector.

Analysts say that the sector's idleness caused by the combination of these two factors explains the crisis that led to the recent strike that made the country come to standstill. It also generates doubts regarding the efficiency of the measures negotiated with the government to grant benefits to the sector.

"The recession worsened the problem of oversupply that had been created by the excessive loans granted," says Caio Carbone, an economist at A.C.Pastore & Associados.

To estimate the number of trucks on Brazilian roads, the consulting company created an indicator which is the result of the division of the flow of heavy vehicles on roads with tolls by the total number of trucks in the country.

The data show that in March this year, the number of trucks on the roads was at a very low point, although it still was 8.3% above the worse moment - October 2016.

The decline in the sector has made transportation companies dismiss employees after a period of strong labor growth.

With the recession, there was a sharp reversion in the trend of hiring truck drivers.

Between 2014 and 2016 - the most recent year with available data - the segment lost nearly 72,000 positions. Among 2,500 professions, it was the eighth in total workers fired in the period.

Translated by THOMAS MUELLO

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