Cargo Carriers Paralyze Major Roadways Throughout Peru Over Fuel Price HikeEverstream Team
On March 15, heavy-duty carriers in Peru began a one-week nationwide strike to protest rising fuel prices and toll rates. Between March 15 and March 20, freight carriers intermittently blocked several major highway networks, roads, and bridges throughout the country, causing severe traffic congestion and disrupting the movement of goods. This particularly impacted the passage of metal concentrate between mines and key ports such as the Port of Callao in Lima. The protesting carriers were affiliated with the National Union of Transporters and Drivers (GNTC), the National Association of Land Transport of Cargo (Antec), and the Union of Transport and Logistics of Peru and America (GTL). As the strike progressed, Peruvian authorities were even forced to deliver medical oxygen tanks for COVID-19 patients by helicopter due to the severe roadway obstructions.
Road blockages were reported in the cities of Sicuani, Espinar, Junín, Ica, Huánuco, Lima, Ancash, Cusco, Puno, Satipo, Chanchamayo, Arequipa, Carrizal, Portachuelo, Achacó, Ayacucho, and Paita. Intermittent blockades occurred at several points along the Pan-American Highway, a major roadway network stretching across the American continents and measuring about 30,000 kilometers (18,641 miles) in total length. On March 18, cargo transporters unionized by the National Union of Cargo Transporters blocked the Pan-American Highway near the municipality of El Porvenir in Lima province. The road closure caused traffic to be blocked for 9.7 kilometers (6 miles) in both directions.
More than 30 vehicles were stranded on the Pan-American Norte highway in the Ancash region of Casma province after a group of heavy-duty carriers punctured tires of passing vehicles on March 15. In Achacó, the Pan-American Sur highway was blocked at KM 440 in Achacó and at KM 456 in Portachuelo. In the province of Satipo, protesters blocked entry into the Rio Negro district. During the afternoon of March 15, cargo carriers blocked the Via Los Libertadores highway in Ayacucho. Carriers also blocked the Variante de Uchumayo highway in Arequipa, causing significant traffic delays in the area on the morning of March 15.
Protesters also blocked several routes in the cities of Cusco and Puno. In the northern part of Cusco, protesters blocked the 3S Highway (Carreterra Cusco-Paucartambo) in the Poroy area. In the southern part of Cusco, carriers blocked the same highway, Carreterra Cusco-Paucartambo, in the Angostura and Kayra areas. Urban transport workers also joined the demonstration. In Puno, protesters blocked the 3S Highway northbound towards Juliaca and southbound towards the Ilave district and Desaguadero, which borders Bolivia.
Protesters also obstructed traffic on bridges throughout the country. In Carrizal, protesters burned tires and cut vehicle cables, blocking the Sechín Bridge which connects the cities of Carrizal and Casma. In Chanchamayo, carriers protested on the Huacara Bridge along the Juan Santos Atahualpa highway in the San Ramon district. Carriers also obstructed the Stuart Bridge, which connects to the Francisco Carle Airport, in the province of Jauja.
Impact on port and mining operations
The widespread and persistent roadway blockages started to impact port operations and mines almost as soon as the strike began. Peruvian exports declined immediately. On March 16, for example, only 15 agricultural cargo containers were shipped, a 93 percent decline compared to March 16, 2020. In the province of Paita, more than 600 trucks, 120 container cargo and dry and liquid cargo transport companies stopped working during their shifts at the Port of Paita, the country’s fifth largest port and critical container port due to its strategic location on the Pacific coast. About 80 heavy-duty carriers initiated a march from the Paita toll to the terminal at the Port of Paita, before ending the march in the district of Colán. Imports and exports of mango, lemon, blueberries, fish, and fishmeal were delayed at the port on March 15.
The persistent roadway disruptions prevented miners from transporting cargoes from mining sites to loading ports which delayed shipments of copper concentrate. Three ships were canceled at the Port of Callao. One ship contained oil cargo, another was transporting solid bulk cargo, while another was carrying liquid bulk. According to APM Terminals, container trucks were not moving in the Callao North Terminal during the strike. The Port of Callao is a critical part of Peru’s commercial network and a major distribution center for imports and exports, handling about 20 percent of all ocean cargo in the country.
Mining operations at the Antapaccay and Las Bambas mines reported delays in loading schedules due to the strike. A road blockade caused the Antapaccay mine to suspend operations for a few days. The Las Bambas copper mine is a polymetallic mine and produces about 311,020 mt of copper annually. The Antapaccay copper mine is in the Yauri district of Espinar Province and produces about 185,600 mt of copper annually. The mine also produces gold and silver. If the strike persisted for any longer, the global supply of copper concentrate could have been significantly impacted.
Carriers suspended the strike on March 20 after reaching an agreement with the government. As part of the agreement, the state-owned gas company Petróleos del Perú, Petroperu, will reduce the price of diesel, and carrier subsidies will be provided for fuel. The unions agreed to clear roadblocks, including barricades made of rocks, burning tires, and tree trunks. The strike began to threaten Peru’s agricultural and copper exports and severely disrupted metal concentrate transportation between mines and ports. Although the strike has since ended, customers are advised to monitor civil unrest and protests in Peru and South America more generally during the coming weeks, particularly after any price increases on services, changes of subsidies, or any other major changes to economic policy are implemented.
In comparison, in 2019, civil unrest paralyzed supply chains in Colombia, Ecuador, Bolivia, and Chile. Protests were sparked following price increases on services and changes to social welfare spending. In Ecuador, for example, an end to fuel subsidies triggered the country’s worst experience with civil unrest seen in decades. Protesters blocked roads throughout the country, 10 deaths were reported, and more than 1,300 protesters were injured. The COVID-19 pandemic has subverted the frequency of large demonstrations throughout 2020 but now that the pandemic is starting to subside, nationwide protests in Latin America may erupt more regularly.