Dive Brief:
- A customs office strike in Brazil is causing extended delays for transport trucks at borders around the country, JOC.com reported. The strike is now entering its eighth week.
- The borders with Argentina and Uruguay are most affected, with losses for shippers and transport providers growing. At least 1,500 trucks are stuck at Foz do Iguacu, waiting for authorization to move scheduled goods into Paraguay.
- The strike is due to a 12 month hold on agreed-upon terms between the Brazilian government and the customs office, the workers for which seek higher wages and an abandonment of the plan to raise the retirement age and cut other benefits.
Dive Insight:
Labor disruptions, especially during peak season, are consistently problematic for the supply chain.
Whenever a necessary component of the supply chain is removed, whether through drivers, skilled labor at ports, or union members protesting the employment of non-union workers, effective movement of goods is impeded, slowed or even stop the supply chain altogether.
Shippers with suppliers in Brazil are no stranger to strikes, but the most recent, eight-week customs strike is crippling operations.
Customs strikes are particularly problematic for supply chain managers, as orders which are reportedly shipped can be delayed for days on end until the importing agency approves the document. Given the security implications of each import, such processes can rarely be expedited if the right staff is not available.
As an example, when Brazil suffered a customs strike in 2008, the Argentinian newswire Infobae reported 5,000 trucks were stuck at the border awaiting clearance. A shipment that normally took hours was delayed up to 12 days for one shipper. This is particularly troublesome for cold chain products, such as perishable goods or drugs, which are a predominant export in South America.
Shippers likely had long warning of the strike, or at least should have heard rumblings of political upheavals from their Brazilian suppliers. Still, the news highlights the particularly damaging effects of customs delays.
