Trucker strikes brought Brazil to a halt earlier this year, highlighting the importance of a smooth haulage system.
Brazilian meat giants JBS and Marfrig Global Foods have revealed how the country’s major trucker strikes hit trade across the country earlier this year.
Roads were paralysed across the country as truck drivers protested in May, leading to shortages of fuel and empty shelves in Brazilian shops.
The Brazilian poultry and pork processors’ association ABPA estimated £630 million (R$3.14bn) of total losses to the sector from the strike.
Marfrig, the world’s second-largest beef producer said its overall cattle kill rose by 19 per cent to 1.79mm head between April and June, boosted by large Brazilian and US cattle supplies but the growth would have been even faster without the industrial action.
It said primary processing volume was hit by an estimated 80,000 head of cattle.
The largest global meat packer, JBS, booked a £22.6 million (R$112.9m) charge related to the strike which hit its pork operation, Seara, in particular, contributing to a 19.2 per cent drop in exports.
Weak consumer confidence and rising unemployment has hit demand across the country.
Weaker domestic beef prices affected JBS’ Brazilian business, with like-for-like slaughter volumes up 17.5 per cent, but revenues only rising seven per cent.
Marfrig also flagged industry ‘margin contraction’.
But in the US, demand and supply of cattle remained strong, supporting JBS’ US margins with exports increasing year on year.
The furore demonstrated the impact haulage issues – and weak consumer confidence – can have on the entire industry, with warnings from the UK Road Haulage Association (RHA) of a ‘no-deal’ Brexit crippling ports.
RHA chief executive Richard Burnett said customs controls meant it would take an average of 45 minutes to process one truck on both sides of the channel and would make the queues of HGVs in Kent in the summer of 2015 look like ‘waiting for the traffic lights to change’.