Trading companies Archer Daniels Midland (ADM), Amaggi, Bunge, Cargill and Louis Dreyfus Company (LDC) filed a request for approval at the Administrative Council for Economic Defense (Cade) to create a road transport joint venture (JV) with the in order to facilitate the flow of grains during the Brazilian harvest, according to a joint note released this Friday (17).
After approval, the company that will be created will provide autonomous road transport services to serve, mainly, these five trading companies participating in the JV.
Each of the trading companies will have an equal stake of 20% in the new company, whose name has not yet been announced.
“The objective is to offer more agility and efficiency to the flow of agricultural production at harvest peaks, when logistical bottlenecks are more evident throughout the chain,” said the statement.
The new company should handle only 3% of the total volume of cargo that the five companies normally move, mainly corn and soybeans, throughout Brazil. The other 97% of demand will continue to be met by partner carriers and independent carriers.
Also according to the statement, the trading companies hired a consulting firm specializing in logistics, represented by Elvio Moro, to support the development of the business model for this project.
Source: CNN Brasil
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