2018 Brazilian Truckers' Strike
Who: Brazilian Truck Drivers
Date it began:
May 18, 2018 the truckers announced they would be striking if their needs were not met by the government.
May 21, 2018 was the beginning of the strike. The day that truckers refused to drive and deliver.
What Was the Goal:
In response to the 2016 price of diesel increase and the cost of oil rising in weeks prior to the strike due to the value of the dollar compared to the real, Brazilian truckers wanted a decrease in the diesel price, exemption from certain tolls (there are a LOT here), and legal and tax reform related to truck driving. The local fuel prices being tied to a foreign currency with daily fluctuations caused much of the trucker's frustration.
Government Response:
Petrobras is the local company that owns and runs most of the fuel in Brazil. Petrobras is not a small company. They are listed on the NYSE and are 58th on the Fortune Global 500 List. They reported 89 billion USD last year in revenues. It's 54% owned by the government here. As some probably know, the local government is one of the most corrupt in the world. This strike was as much a show of unity against the government as it was the fuel prices.
The strike started as the price of diesel had increased dramatically in previous months. The average taxes here make up 29% of the cost of fuel. The rising costs were blamed on rising taxes, but the pricing scheme of Petrobras is tied to the US dollar, and that, was the true reason.
On the first Thursday of the strike the government announced they had made a deal with the truckers' unions. They would drop the price of fuel for the next 90 days in order to come to a
long term agreement. Many were announcing that all would be normal on Friday. The truckers' union did not agree and the largest representative for the truckers had left the meeting before any sort of
agreement was reached. It was a comical situation to see the government state the strike was over even though nothing had changed and in fact, only began to worsen.
Impact on the Country:
The reports that we read estimate that a loss in over R$30 billion in economic production occurred during this strike. Across the country there were reports of:
- Airports canceling or halting flights due to gas shortages or other operating shortages.
- Closure of gas stations all over the country. Many completely, while others just had diesel.
- Empty shelves at the grocery stores. Lack of basic supplies.
- Suspension of classes in schools and universities.
- Hospitals canceled surgeries and procedures.
- A reduction of bus transportation.
Impact on us:
We didn't think much about the impact of the strike during the first few days. Everything seemed normal in our day to day life of work/school. Greg got gas on the 23rd (3rd) day of the strike for no reason other than he was waiting for a colleague to pick something up from a bakery next to a gas station. The next day, however, the lines for gas started early in the morning and continued all day. By Thursday night and Friday morning all gas stations in Vinhedo and Valinhos were empty. The lines on Thursday night were 200 to 250 cars deep, at least.
Friday, while most businesses functioned normally, schools were impacted. Public schools were having to close early or completely due to students not having transportation and the worry that food and supplies would not be delivered. Private schools, such as the one Amber works and the boys attend, ran as normal but with a large decrease in student attendance. Students were not penalized for not attending due to the transportation concerns. There was no discussion about future decisions as the school board felt that this would end quickly.
Many locals were very calm and kept their daily routines normal. Grocery stores were not crowded and the roads seemed just as busy as always. We were surprised when people were planning weekend road trips or even simply going out to eat for lunch on Friday. To Greg, it felt like the pre-winter storm in the mid-west. Time to stock up, just in case. That's exactly what he did. Water, essentials, non-perishable foods. By Sunday, it was clear the strike was not going to end over the weekend as many thought it would. Amber began receiving WhatsApp messages and emails from people at school. It was a very confusing few hours as they decided what to do. In the end, the school remained open for students that needed a place to go, teachers were required to report to work, no new content or official review for finals could take place unless available to all students. In essence, teachers became glorified babysitters. It was already a shortened week due to the Coprus Christi holiday, but teachers did their best to provide a safe, fun, yet somewhat educational, place for those students who needed to come.
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| Empty shelves were filled with coconut water and juices. |
Monday morning there was less traffic on the roads and a few stranded cars around. Amber had zero students show up for school. Zero out of 24! No lines at any gas stations as they were all without gas; though the workers were still present sitting in their chairs like normal.
WhatsApp messages came in throughout the day from the "truckers unions" stating they were going to start blocking major roads in and out of major cities. By Monday afternoon, it was visible to all that the truckers were stepping up their efforts. Burning tires stretched across 4 and 5 lane highways blocking all traffic. Trucks stopping side by side with their trailers set at perfect angles to prevent anyone from trying to pass.
Problems increased as the night went on and continued into Tuesday. TVH remained open even though sales were drastically decreased. No shipping companies were able to pickup or deliver anything to/from TVH for almost a week. Most people had enough gas to continue to come to work and thankfully the local bus transports had enough extra fuel to continue to provide daily transportation for TVH. Teachers dwindled at Amber's school as the week progressed. Grade levels were combined and then combined again. Amber had a maximum of six students show up on Wednesday.
The afternoon of Monday the 28th was the tipping point for the Government. They announced the military would be opening the major highways by force if need be. The response by the truckers seemed to be a 'bring it on' mentality. One group shared a social media post stating that, 'there will be blood.' In the end they opened a few major roads, but it was a minimal effort in our opinion. More of a show of power in words than actual force.
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| Gas trucks heading into cities with armed escorts. |
End Result:
After a few more days of talks and negotiations the truckers began to agree to most everything the government had offered. The situation had reached a whole new level, impacting hospitals, cancelling surgeries and grocery stores, leaving shelves empty. The logistics make up of Brazil is still very reliant on highway traffic, the delivery of what is on all the trucks. Brazil is a top global supplier for sugar, meat, grains and coffee. The government had to no choice as all exports were stopped and the revenue impact was increasing.
CEO Pedro Parente has since resigned from Petrobras. He was most likely forced out by the government. When he was hired, he promised to be transparent and if the government interfered
with anything he would resign. He did exactly that and this, in itself, another sign of the quality of the government here.
Our Thoughts:
The next steps are still unknown. But the highways are open and gas stations are starting to receive fuel again. Though as we write this on Sunday the 3rd of June, they are still more empty than full. Petrobras needs to find a new CEO and the country is trying to find their new President in the upcoming October elections. It doesn't seem like many people really care or know what the next step is. We will watch the prices at tank to see how fast or slowly they begin to raise prices.
*Coauthored by Greg and Amber Schrage
**Pictures taken by Greg and Amber Schrage as well as pictures they received from friends experiencing certain situations.
Crazy!
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