Behaviour of agricultural commodity freight rates and structural breaks

Brazil is the world's largest producer and exporter of agricultural commodities, while facing logistical weaknesses and a heavy reliance on road transport. This study examines abrupt variations in a time series of soybean and maize road freight rates in Brazil using the Bai and Perron methodology to identify structural breaks. The analytical approach employed a dynamic programming algorithm to locate significant breaks. The results highlight that these breaks were outcomes of economic, political, and market events, such as the lorry drivers' strike in 2018, the promulgation of Law 13,703, the completion of the paving of highway BR-163, the COVID-19 pandemic in 2020, the increase in grain exports, the Russia-Ukraine war, and the spike in oil and diesel prices, all of which directly impacted road freight rates and the transport industry. These conclusions underscore the necessity of assessing the agricultural commodity supply chain in uncertain settings to support decision-making and impact mitigation.