Brazil export cargo delayed by container overbooking

Container slots that are not filled due to no show in Brasil

Maersk Line

Container overbooking by exporters generates delays in cotton and coffee exports, among others, in Brazil, Maersk Line reported last Monday. Additionally, according to reports from the danish container giant, exports fell for the second consecutive quarter, citing that most of the exporters are generating more reserves than they really need, leaving out other companies that look for spaces to ship their cargo.

Exporters are harming each other when they present reserves that they do not use because it increases costs and limits the spaces available on ships to present reserves.

In the case of coffee, last week the Brazilian exporters to the United States and Europe were facing difficulties in obtaining space on the ships for their cargo, which could also deteriorate the fact that this year Brazil had the largest coffee harvest in Brazil in its history.

In the case of cotton, also being one of the largest plantations, it was also suffering from space limitations. On the contrary, in the case of sugar and grains this reduction had not been felt since they are generally shipped in bulk.

The drawback of the space limitation comes after some operators reduced their services to Brazil in 2016 after a drop in imports amid the country’s largest recession.

Likewise, the excess of reserves increased this year after the national truck stoppage and the great cotton harvest, which precipitated the reservation of spaces fearing congestion at the end of the strike in May.

Maersk confirmed a 9% drop in containerized exports of coffee and cotton in the second quarter compared to the same period in the previous year. In the case of containerized sugar, its fall was 33% compared to the same period in 2017. In general, containerized exports from Brazil fell 6% in that quarter. (data is only exports handled with Maersk)

Possible solution

However, Maersk suggests that the solution to the problem of excess reserves by exporters would be a surcharge for the reserve, however, have not yet decided on the subject.

Source Reuters

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