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Cargo transportation: Argentine freight forwarders will not be able to collect cash trips in Uruguay

Cargo transportation: Argentine freight forwarders will not be able to collect cash trips in Uruguay

Local transporters claimed months ago that they were losing competitiveness compared to their Argentine colleagues. The Executive Power gave rise to those claims and approved a bill that prevents Argentine businessmen from collecting cash trips in Uruguay.

In October of this year, the Ministries of Economy, Foreign Affairs, Transportation, Industry and Labor sent to Parliament a bill referring to the form of payment of the freight price in the professional transport of international land cargo with Argentina.

What the Argentine freight companies did was simple. They made binational foreign trade trips and collected them in cash in Uruguay.
They took the dollars to their country and exchanged them in the parallel market for blue. And so they took advantage of the exchange difference. Using this operation, they could offer international freight at a lower value.

This Friday the blue dollar was trading at A$ 347 for sale. However, the official wholesale dollar was priced at A$177.15, with an exchange rate gap of 96%..

The bill explained in the preamble that the conditions of international markets, with the end of low interest rates worldwide, added to the monetary instability of regional markets and the public policies of some regional governments with their application of multiple exchange rateshad distorted competitive conditions in professional international freight transport.

It added that this situation had generated competitive disparities in the prices of merchandise freight in the transport sector, which was amplified by the Existing exchange differences with countries with exchange rate unfolding such as Argentina.

This difference in the exchange rate resulted in the local freight companies being seriously affected, losing a large volume of the international land cargo they transported.

International cargo transportation truck

For the Executive Power, this situation became even more inequitable with the handling of cash in paper money and for this reason it was necessary to adopt conditions that reestablish conditions of fair competition for industry and national labor.

With these foundations, he proposed approving a single article. That article underwent some modifications until it finally became the text of Law 20,078 on fifixation of freight payments in international land freight transport with Argentina.

The article indicates: “all payments made for freight in international land cargo transportation with the Argentine Republic must be paid to the country of registration of the cargo vehicle by mandatory transfer through financial or banking entities.”

The president of the Chamber of International Land Transportation (Catidu), Mauro Borzacconisaid to The Observer that for the approval of the project the support of the Minister of Transportation, José Luis Falero, and the National Director of Transportation, Pablo Labandera.

For the employer, the result of the measure set forth in the law will depend on the controls that are carried out.
The text provides for control by vehicle registration. So, if a registration made 10 trips in Uruguay, the owner will have to prove that she received the transfer for that amount of freight.

“The Ministry of Transportation is going to ask the bank for the certificate of the transfer that was made to Argentina,” he explained.

The control will also involve the clients who hire the freight. “Whoever hires the trip will have to ask the carrier for the name of the bank in Argentina to make the transfer,” he said.

The sector has been demanding this measure for months. As the bill was being discussed in the Senate, the chamber went before the Transportation Committee. There, Gastón Landa, one of the union’s representatives, referred to the Argentine carriers and the advantages that the exchange difference gave them.

They are coming to Uruguay, they collect their freight in cash, they take those dollars and in the parallel market they make it triple (when changing them to Argentine pesos). What does that allow? Lower the cost of freight and stay with the market, ”he explained.

Beyond showing compliance with the approved control measure, for cargo carriers there remains a pending issue to be resolved:apply zero VAT to import freight in the national section.

“Import freight has VAT and is paid abroad. When the foreign client invoices, he does not deduct it. It gets lost everywhere,” Borzacconi said.
The sector understands that this tax change will help curb the competitive problems it faces, preserve job sources and maintain the fleet of international transport trucks. At the moment, the fleet ranges from 1,300 to 1,500 vehicles.

“The only vehicle park that has not grown is that of international transport and every day there is more participation of foreign-flagged trucks from all countries,” he said.

The expectation of the businessmen is that this measure will be approved during the next six months.
“We never asked the government for anything that wasn’t fair. Neither the current nor the previous ones. It seems to us that it is time that they pay a little attention to the international transport of cargo”, expressed Borzacconi.

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