BOGOTA -(Dow Jones)- Colombia's government Tuesday got rid of a years-long policy of setting minimum freight prices for the trucking industry, saying months of rains that destroyed highways and bridges caused a spike in transportation costs and rendered the minimum-price statutes unnecessary.
"With today's decision, the system of highway cargo transport goes from one of intervention [on prices] to one of free, but monitored prices," said a statement from the office of President Juan Manuel Santos.
The Association of Colombian Truckers, or ACC by its Spanish acronym, is opposing the change, saying the elimination of a floor on cargo prices is an attempt by big business and the government to eliminate independent truckers.
La Republica newspaper reported the ACC is preparing a truckers' strike to begin Feb. 2, in which 180,000 trucks throughout Colombia will suspend activities. Officials from the truckers' group weren't immediately available Tuesday to comment on that report.
Torrential rains during the second half of 2010 destroyed infrastructure throughout Colombia, creating massive headaches for the trucking industry and causing a spike in transportation costs.
"Due to the [rain-related] emergencies the country has suffered, the prices for cargo transport reached between 35% and 90% above the set minimum prices, creating in practice a situation of free-floating prices," the statement said.
With that in mind, the government said it decided now was the time to abandon the regulated minimum prices, which were set according to weight.
The Transportation Ministry said it also undertook several studies that showed regulated prices for the trucking industry were hurting the competitiveness of Colombian exports. Additionally, it said studies reveal that no country with Colombia's level of development still uses regulate pricing for cargo transportation.
The ministry said it will continue to keep an eye on prices paid for transportation to ensure the unregulated system is not abused.
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