Cargo theft has tripled over the past three years in Rio de Janeiro, as an epidemic of violent assaults is substantially interferring with the logistics supply chains in the so-called Cidade Maravilhosa (in English — Marvelous City) daily.
Trucks are being hijacked at the rate of more than one per hour in Rio and its hinterland, according to reliable sources. This has boosted insurance premiums for shippers and forced them to take on security surcharges from transport providers, ranging from 0.3 percent to 1 percent of cargo value, plus a Realis10 ($3) per 100 kilos fee. It is also driving up prices: some report central Rio supermarket prices marked-up 30 percent to 50 percent, due to these extra costs.
Further, according to an estimate by Firjan, the Federation of Industries for the state of Rio de Janeiro, cargo theft in the state caused extra losses of Reais607.1 million last year to its members. Some of the losses are due to a lack of insurance, as risk providers are no longer prepared to cover cargo to and from Rio de Janeiro; some shippers are now seeking alternative transport options, such as Sepetiba (Itaguai), about 60 kilometers (37.2 miles) from Rio, or even as far away as Santos, to the south, or Vitoria, to the north.
The Temer adminstration has imposed a “Government Intervention” (GI) for the state of Rio de Janeiro, whereby federal troops are taking over the duties of the poorly-paid police officers unable to stem the actions of drug gangs that seem to be responsible for the heists.
Brasilia ordered troops to assist police last summer, but this GI measure goes much further and is likely to last several months, at least until after the presidential election in October.
The latest figures from the Instituto do Seguranca Publico (ISP or Public Security Institute) paints a bleak figure of rising cargo robberies in Rio de Janeiro. It shows that there were 10,599 cargo thefts in 2017 — a 7.3 percent increase from 9,874 in 2016. That’s about 30 incidents per day.
‘Increasingly difficult to do business in Brazil’
“It is becoming increasingly difficult to do business in Brazil, and especially in the city and state of rio de Janeiro,” said one veteran consultant who works closely with Firjan, the second most powerful shippers' lobbying group, after Fiesp in Sao Paulo state.
“Over the past two years these gangs have been stealing at least one truck every 50 minutes or so, at least until the Government Intervention, a couple of weeks ago. The minister responsible [Raul Jungmann, of security] says he is getting some results but nothing is official as yet,” he said. “Something has to happen because food prices in the shops in Rio are almost double for some items, as the costs are always passed on to the consumer.”
What’s more, increasingly violent attacks have forced all cargo carriers to up their budgetary spend on tracking systems, insurance and armed guards. Further, many trucking companies are now struggling to find drivers to work in Rio, as the risks of being robbed at gunpoint and also, possibly, of being kidnapped with the truck, are too great.
Such a situation has led to the shuttering of units and even entire companies in the state. According to the Union of Cargo and Logistic Companies for the state of Rio de Janeiro (Sindicarga), about 40 medium-sized and small trucking companies that operated in the state of Rio went bankrupt in 2017. This suggests the sector shrank by 13 percent, given there were 320 small- to medium-size companies operating previously.
“Cargo theft has now tripled during the last three years in Rio de Janeiro and, unfortunately, our state has overtaken Sao Paulo and has become the leader in cargo theft in the country,” said Fetranscarga President Eduardo Rebuzzi.
According to the estimates of Firjan, cargo theft in the state caused extra losses of Reais607.1 million last year to its members. Some of the losses are due to a lack of insurance, as risk providers are no longer prepared to cover cargo to and from Rio de Janeiro; some shippers are now seeking alternative transport options, such as Sepetiba (Itaguai), about 60 kilometers (37.2 miles) from Rio, or even as far away as Santos, to the south, or Vitoria, to the north.
Contact Rob Ward at email@example.com.