Companies Cite Market Changes in Reassessing the Project
A year and a half after announcing the creation of a joint venture in the transportation sector, major trading companies Amaggi, Archer Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus Company (LDC) have temporarily postponed the initiative.
In a statement, the companies said, “At this moment, the project is being reassessed in light of significant changes in the commodity market.”
The joint venture had received approval from Brazil’s Administrative Council for Economic Defense (Cade) in September of the previous year. The initial plan was for the new company to handle just 3% of the total cargo volume for the five companies, with the remaining 97% remaining under the responsibility of partner transport companies and independent truck drivers.
“There is no intention to solve all the sector’s problems, as they are also linked to roads, ports, and storage capacity. The goal is to mitigate some of these challenges for the partners,” said Elvio Moro at the project’s launch. Moro, who previously worked at Mato Grosso do Sul-based RodoBelo Transportes, was one of the first hires for the new company. However, sources indicate he is no longer involved in the project. His LinkedIn profile currently lists him as a “general sales manager.”
Initial Plans and the Scope of the Project
The original plan included purchasing 1,000 grain trucks and trailers, although the investment value and the company’s headquarters location were not disclosed. According to a report by Agfeed, the joint venture was to be named Movere and expected to hire 1,000 drivers.
ADM, Amaggi, Cargill, and Louis Dreyfus are also partners in the freight platform Strada, formerly known as Carguero, since June 2021. Meanwhile, Bunge has a similar partnership with the Argentine company Target.
At the launch of Carguero, its CEO, Luis Barbieri, highlighted the high operational cost of hiring drivers, which the companies aimed to reduce through initiatives like these. Operational costs ranged between R$3 and R$9 per ton, representing a potential area of savings for the firms.
Reevaluation in the Face of Market Shifts
The joint venture was envisioned as a complementary solution for the logistics challenges faced by these companies. However, recent shifts in the commodity market have prompted a reconsideration of its viability. For now, the project remains on hold as the firms assess its feasibility and relevance in a changing landscape.
