IMPACT OF LAW 12.619 ON ROAD CARGO TRANSPORTATION COSTS

In June 2012, Law 12.619 came into effect in Brazil, which provides for the exercise of the profession of professional driver of motor vehicles. In addition to regulating the forms of remuneration for these professionals, the new law also addresses a topic that is sensitive to national cargo transport: the working hours of drivers. Although it has the important aspect of regulating road freight transport and making roads safer, the new law has important impacts on the operation and cost of companies, as well as on the level of service offered by them.

CHANGES WITH LAW 12.619

Dubbed the Rest Law, Law 12.619 regulates truck drivers' working hours both within the scope of the Consolidation of Labor Laws (CLT) and the National Traffic Code. As of this date, contracted, commissioned or self-employed professionals are required to take 11 hours of uninterrupted rest every 24 hours. In the case of professionals governed by the CLT, this rest time is still limited to a minimum of 35 hours per week.

Even during the workday, drivers will no longer be able to make the long shots that they have been doing so often. Every four hours of driving, professionals are now required to stop and take at least 30 minutes of rest. In the case of a driver governed by the CLT, at least one more hour must be computed for meals, with the driver being able to work a maximum of two extra hours per day.

It should be noted that the daily rest of the drivers must be carried out with the vehicle parked, and can be done in the sleeper cabin itself or in the employer's, clients' or hotels' accommodation. Even in the case of alternating drivers working in pairs, the driver is guaranteed a minimum daily rest of six consecutive hours outside the vehicle or with it parked.

In terms of the worker's available time, another important aspect of the new regulation is the time periods for loading, unloading or inspection in relation to professionals governed by the CLT. When these exceed the driver's daily working hours, they should be considered as waiting time.

Law 12.619 also regulates the remuneration of cargo transport drivers governed by the CLT. It prohibits payment for travel time, distance traveled and quantity of products transported, in order to avoid excess cargo and speed. The new law stipulates that the remuneration for overtime must be 150% of the normal hourly wage, while that for waiting hours will be 130% as compensation, not including labor charges. If the driver travels at night, a night surcharge of 20% must be computed. In the case of the reserve hour, the rest during the relay must be remunerated as a fraction of the normal hourly wage, at the rate of 30%.

IMPACTS OF THE NEW LAW ON THE TRANSPORT OPERATION

Transport companies complain that the new law will require a series of operational and financial adaptations that will impact the final value of the freight and the service offered. Previously accustomed to an average daily workday of 14 hours (often with “shots” of more than 24 hours), drivers governed by the CLT will start to limit their shifts to eight hours a day, which can reach ten with overtime. Even the self-employed must respect the minimum daily rest of 11 uninterrupted hours, in addition to the 30-minute breaks every four hours of driving.

These impacts are clearer on routes that will require more than one day of transport. An example is an operation that covers 1.500 km, such as the route from the Midwest to São Paulo. Under the old regime, the carrier would take, on average, three days from loading the vehicle to unloading it at its destination.

Based on the new regulation, this same route must be completed in four days by carriers, considering loading and unloading times. Different from the previous practice, the driver must stop daily for 11 uninterrupted hours to rest and, every four hours of work, he must stop at least thirty minutes. In the case of drivers governed by the CLT, loading and unloading time becomes part of the driver's journey or waiting time, and a break of at least one hour a day for meals must also be respected, which may include the 30 minutes of rest. Thus, the trip that, on average, lasted three days, starts to demand at least four days, as can be seen in Figure 3.

The Law of Rest will bring important impacts to companies' freight costs. With the increase in travel time and the greater regulation in driver remuneration, in a stretch of 1.500 km, just complying with the law alone will bring an increase in costs close to 23%, considering the drop in vehicle and driver productivity.

On long-distance routes, of around 3.000 km, such as the connection between São Paulo and Belém (PA), the impacts are even greater in terms of delivery time, affecting the level of service. The new regulations will mean that carriers will spend eight days instead of five to travel the 3.000 km that separate the two cities, which will bring an impact of around 32% on freight costs. In operations of 800 km, such as São Paulo to Ipatinga (MG), the journey will continue to be two days, with an average readjustment of 6%.

MITIGATION OF IMPACTS BY COMPANIES

To mitigate the consequences caused by the new law, companies must seek productivity gains in their operations. Among the possibilities is the reduction in loading and unloading times for trucks, historically very long in Brazil. After the new law, the driver governed by the CLT who waits seven hours to load a vehicle will practically have exhausted his journey that day, reducing not only his productivity, but also that of the asset.

Scheduling deliveries can also be an alternative for companies to optimize driver time. Still in the loading/unloading operation, another solution is to add drivers responsible exclusively for maneuvering activities. With the new Law, the ideal is for the driver to find the vehicle already loaded to start the trip, increasing the productivity of the driver and the truck.

New network planning projects can also contribute to mitigating the impacts of Law 12.619 on road freight prices. On longer routes, changing drivers for relays can be another good alternative to increase asset productivity.

However, implementing these initiatives requires a sophisticated planning and scheduling system. By creating separate schedules for drivers and trucks, the process becomes much more complex, requiring more sophisticated management, teams dedicated to transport planning and scheduling, or even a traffic center with greater technological support.
CONCLUSION

Regardless of road inspections, it is important to emphasize that the new law has a very strong labor aspect. It is, therefore, up to companies to adapt to the new regulations and make the necessary adjustments not only to mitigate the impact on total logistical costs, but also to avoid creating labor liabilities.

An average road transport cost increase of 21% is expected this year, with 14% provided solely by the impact of the new law. The remaining 7% is due to the pressure of increases in cost items, driven mainly by the collective bargaining with drivers and the increase in diesel prices.
Sooner or later this cost increase pressure will influence the freight cost. However, as the relationship between demand and supply is what most contributes to price formation, today the market has a certain dichotomy in relation to prices. Growing sectors, such as agribusiness, have already suffered from pressure to increase freight costs. On the other hand, carriers that operate in sectors more linked to consumer goods with a weak increase in demand, or even zero in some cases, are very careful with regard to readjustments, even below the increase in cost.

Although tariff increases are certain, they can be mitigated by improving the efficiency of cargo transport operations. It is clear that this increase can only be leveraged with joint actions by shippers and carriers. Planning and scheduling transport will be even more important actions in this new phase.

The lack of manpower, which already affects carriers, has everything to continue to be one of the great challenges. The new law brings greater complexity to the scheduling and operation of transport and will certainly require more discipline from drivers and greater qualifications.

For its part, the federal government has already cut the Contributions for Intervention in the Economic Domain (CIDE) to try to minimize the increase in diesel prices, but it will possibly have to think about new readjustments and face the dilemma between maintaining, or even expanding, the regulation of the modal. road. There is also the risk that pressure from increased freight will end up contaminating inflation, given that most goods in Brazil depend on road transport.

Another problem to be faced by the government is the adequacy of the roads to make the new legislation viable. Currently, many routes do not have enough stopping points to guarantee compliance with the law by drivers, and highway concession contracts do not contemplate the construction of this type of facility, requiring future adjustments.