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PORT DEVELOPMENT
Port congestion crunch in Brazil
In a recent report, Brazil’s Ministry of Development,
Industry and Foreign Trade
stated that vessels calling at ports in the
country last year spent 90% of their time
either waiting for a free berth or for the
arrival of an export shipment in the port.
As a result, Brazilian ports are expensive
to use and exports are less competitive.
In Santos the average time for a vessel
to be loaded with maize was 18.7 days, of
which 16.3 days were down to waiting
time. It was a similar position with soya
bean meal and sugar, whereby 8.8 days of
the total layover of 11.4 days were down
to waiting time. As already reported in
WorldCargo News, some Chinese customers
have cancelled contracts for soya beans.
Truck queues outside the port of Santos
stretched at one point to 30 kms.
This was in a year when the soya bean
crop in Brazil amounted to 83 Mt. Santos
has been particularly hard-hit this year because
the harvests for both soya bean and
maize are more than double in terms of
volume than the previous year. Brazil is
on target to overtake the US for the very
first time in soya bean production thanks
to this year’s crop, while the US has been
hard hit by drought. Brazil’s port and inland
transport infrastructure is being overwhelmed.
However, as the protracted debate
over MP 595 shows (WorldCargo
News, March 2013, p23-24), there is no
consensus on the way forward.
Freight impacts
A government official noted that the long
wait for berthing directly impacts on
freight rates, given that demurrage fines
are contractually allocated to the Brazilian
importer or exporter, thereby undermining
profits, causing damage or even
resulting in the loss of future business.
The report prepared for the Ministry
says that the long stay that vessels are
forced to endure “indicates a possible low
operational capacity at Brazilian ports
and/or low productivity import operations.”
It highlights the need for “major
investment” to expand capacity.
Santos is not the only port to be affected.
In 2012, container vessels stayed
an average of 36.3 hours in all Brazilian
ports, of which 20.5 hours were waiting
at anchor. At Salvador, the average handling
time was 45.7 hours, of which 33.8
hours was waiting time. In Paranaguá,
waiting time was 25.2 hours out of a total
stay of 40.9 hours.
In a 2012 World Bank study, Brazil was
in 121st position out of 185 countries
analysed in terms of the cost of exporting
containers. In South Africa, the same
cost was 73% of that charged in Brazil. In
Mexico it was 65% and in the US, Germany
and China the cost was less than
50% of that being charged in Brazil.
Too little, too late
On the export side, measures being put
into place to solve the problem of trucks
having to queue at the port of Santos will
only come into effect after most of this
year’s harvest has been shipped. This is
because measures such as the expropriation
of land and environmental licensing
take several months to implement.
Santos port authority Codesp is to
build a new parking area on the right bank
of the port covering 22.6-ha, which will
be the third area for trailers accessing the
port. However, this year it will be able to
operate only at 33% of capacity.
In Guarujá, where heavy congestion
has been reported, the state government
is to build a second access road to the
terminal. This is unlikely to be in operation
before June. At present, this area,
which contains the largest container handling
facilities in the port, is accessed via
an 1100m long “funnel,” which is used
by 4000 trucks daily. To reduce congestion,
a new system that segregates trucks
by cargo type has been introduced, but
what is really needed is a new access road.
Diversion
Trucks that previously delivered soya bean
consignments to the ports of Santos and
Paranaguá are frequently being sent along
a 1600 km diversion to the port of Rio
Grande do Sul. Using Rio Grande has
been dictated by lower waiting times, but
The situation is getting worse while
arguments over port reforms continue
the diversion means that queues at Rio
Grande are now three times longer than
they were a year ago.
Even so, waiting time is half that at
Santos or Paranaguá. Ships docking in the
second week of May in Rio Grande
would have had to wait until early June
to access either Santos or Paranaguá. Veteran
truck drivers in Brazil say the situation
at the country’s ports is the worst
ever, with the queue to enter Santos now
anything up to 24 hours. Take-up of containers
by grain shippers has increased dramatically
this year, as they seek to avoid
congested bulk terminals.
Cabotage problems
The problems also affect domestic movements
of goods, according to Conab, Brazil’s
national supply company. It states that
it is more expensive and slower to ship
grain domestically by sea. Consignments
shipped to the north east of the country
from the central region using a combination
of road and sea can take between 40
and 60 days to be delivered.
A shipment moving between Goiás
and Ceará can be delivered by road in 3-
6 days at a cost of US$177 per tonne.
However, using a combination of road and
sea the cost rises to US$363 per tonne.
On hauls between the southern province
of Paraná and the north east, the price is
around US$327 per tonne.
Conab says the high price of using
road and sea is due to the elevated price
of cabotage, and longer delivery times due
to the fact that it takes truck aggregation
to fill a coastal vessel, so service frequency
is out of line with market requirements.
The situation is especially acute during
harvest, when queues at ports for export
shipments result in fewer trucks being
available for domestic movements. ❏
WorldCargo
news
The continuing row over the port reform law
MP 595 is not helping matters
V3
May 2013 51