Informality is widespread across Brazilian industries. Its effects are far-reaching, even contributing to the shortage of professional truck drivers, Vinicios Fernandes, Business Unit Director at IRU member Edenred's Brazilian subsidiary, told IRU.

Brazil's road freight sector faces a costly challenge.

Informality remains deeply embedded in the market. It affects tax revenues. It distorts competition. It reduces visibility across the logistics chain. It also undermines working conditions for drivers. For Vinicios Fernandes, the issue is not new. But it has become more urgent.

"Informality has never been an exception in Brazil's trucking sector," said Vinicios Fernandes. "The difference today is that, in a sector under much greater pressure from costs and regulations, it now directly influences how the market functions."

A recent study by the Association of Electronic Freight Payment Administrators (AMPEF) estimates that around 43% of road freight in Brazil operates outside formal mechanisms.

The impact is felt across the economy. Around 60% of everything transported in Brazil moves by road. Any distortion in road freight therefore spreads quickly. It affects supply chains, freight prices, operators and drivers.

Diesel is one example. Fuel prices have risen sharply since the start of the war in the Middle East. In a formal market, higher operating costs tend to be reflected in freight rates. But this does not happen evenly when a large part of the market operates informally.

Formal companies face tax, regulatory and operational costs. Informal operators often do not. This creates an uneven playing field.

"Those operating within the rules need to adjust prices to preserve operations," said Vinicios Fernandes. "But part of the informal market can postpone or dilute this impact. Over time, this undermines the sector."

Driving talent away

The consequences go beyond lost taxes and unfair competition. Informality also affects drivers directly.

When freight operations are not formally registered, drivers can lack proof of income or work. They may have limited access to social protection and face more precarious working conditions. This makes the profession less attractive - weakening the sector's ability to recruit and retain drivers.

Truck drivers operating in the informal sector earn 34% less than those working in the formal sector, according to the AMPEF study.

Brazil's old "freight payment letter" (carta-frete) became a symbol of these problems. It lacked traceability and had limited transparency. It created space for abuse and distortion. Its ban was an important step forward. But informality did not disappear. It adapted.

Today, the challenge is to bring more operations into formal, traceable systems.

Electronic freight payment tools can play an important role. They provide more transparency, reduce reliance on cash, create a clearer record of transactions, and improve security for drivers.

Brazil has also taken new regulatory steps, with stricter freight control mechanisms. One key element is the mandatory registration of all operations through the Transport Operation Identification Code. New resolutions have also introduced controls at the freight contracting stage.

These measures aim to make the market more transparent and predictable. But regulation alone will not solve the issue.

"Informality is driven by several factors," said Vinicios Fernandes. "These include high taxes, bureaucracy, limited access to credit and an ageing fleet. For many operators, formalisation remains difficult."

The goal, therefore, is not only enforcement. It is also to make formalisation more viable in practice.

"Brazil's road freight sector is essential to the national economy. It connects producers, ports, cities and consumers," said Vinicios Fernandes. "But its full potential depends on a fairer and more transparent operating environment."

Reducing informality would strengthen companies that follow the rules. It would support public finances. It would improve visibility across the logistics chain. And, crucially, it would help better protect drivers, making the profession more attractive.

As Vinicios Fernandes put it, "Progress means making the formal path more viable."