The port movement of cargo freight in Brazil fell by 3% between January and April this year, compared to the same period in 2021. The result was strongly impacted by the lockdown measures adopted in China since the beginning of March.
The data are part of the most recent survey by the federal government’s National Water Transport Agency (Antaq).
According to official data, imports of products via sea freight fell by 7.92%, while exports fell by almost 3% in the country. Also in Brazil, cabotage, which represents shipping along the coast, recorded a drop. In relation to 2021, this transport service showed a retraction of 2.5%.
Despite the drop in the movement of Brazilian ports, the volume of general cargo transported rose 26% in the same period. More than 23 million tons were loaded this way between January and April this year. General cargo is a maritime modality that differs from containers.
The transport of this segment is normally done by bags, boxes, bales, drums and crates, and did not feel the effect of the lockdown in China. On the contrary, the modality benefited from the stoppage in Chinese ports and the increase in the price of containers, which increased in cost due to the lockdown.
One of the current problems faced in Brazil, caused by the outbreak of the virus in China, is the escalation in the cost of freight for cargo ships in the country, whether those intending to dock in Brazilian ports or those with Asian ports as their final destination.
THE CNN the president director of the Brazilian Association of Port Terminals (ABTP), Jesualdo Silva, confirmed that the stoppage of cargo ships in China generated a shortage of global supply and, consequently, a rise in the price of freight.
“This rise in price happened. Ships coming from Asia to here and vice versa did not know if they would be able to unload and follow the route. Do not leave or enter the container, practically, in China. And without a doubt, a scarcity generates an increase [no custo]. Many products are manufactured in the Asian country and this flow was not happening, because of Covid-19, “said Jesualdo Silva.
However, even with the restrictions imposed by the lockdown to contain the advance of Covid-19 in China, the ports of the Asian country had a 1.7% increase in the volumes of containers handled in the period from January to April this year, according to the Center. National Transatlantic Navigation (Centronave).
As of May 24, cargo handling at major Chinese ports has increased by 4.2% compared to the same period of the previous month. Centronave highlights, however, that this increase was lower than expected.
In Shanghai, the lockdown system ended on the first of June, after two months. The port continued to operate with reduced capacity and some operations were redirected or postponed.
Even with the forecast for the return of container movements in the coming weeks, Centronave still believes that it is premature to predict when 100% normalization of the logistics chain in China and, therefore, of the global production and supply chains will occur in the coming months.
“Although the Chinese economy suffered from the lockdown, there was no total closure in some productive areas of the country. The positive result could be greater, but we need to take into account that part of the country’s factories are located outside the urban area, where the measures were stricter. The main ports in China did close, but other alternatives continued to work”, explained Ricardo Teixeira, Coordinator of the MBA in Financial Management at FGV.
Note from the National Center for Transatlantic Navigation
The National Center for Transatlantic Navigation – informs, with regard to the lockdowns that have taken place in China since March of this year, that the greatest logistical impact observed so far originated in the blockages to the operation and fluidity of the country’s internal land logistics, notably in road transport.
Despite these restrictions, however, there was a 1.7% increase in container volumes handled at Chinese ports in the period from January to April 2022 compared to the previous year, reaching 91 million TEUs (20-foot equivalent unit), from of which 23.6 million in April alone. In May (until the 24th), cargo handling in the main Chinese ports increased by 4.2% compared to the same period of the previous month.
Since March of this year, as is known, Chinese authorities have adopted a series of strict measures to control the new wave of Covid-19 contagion, including lockdowns in several cities, including port cities. Even so, the port of Shanghai continued to operate although with reduced capacity, and some operations were redirected to other ports such as Ningbo-Zhousan, or postponed.
In Shanghai, local authorities recently announced a relaxation of security measures. Shopping centers reopened at 50% of their capacity, some subway lines began operating and residents of areas classified as low risk were able to leave their homes.
Working conditions in the “closed-loop model”, where workers sleep in the workplace to avoid the risk of external contamination, have remained the same. With the reopening of the port, the local challenge for the coming days and weeks will be the normalization of container movements, as even a moderate restart of volumes handled could lead to occasional congestion.
Although Shanghai’s container terminals, which had remained isolated for more than two months, remained operational, the blockade of ground transport led to a backlog of goods in factories and distribution centers in the city to the tune of 260,000 TEUs.
The full functioning of the port will depend on overcoming the challenges that the road modal still faces, as the restrictions of lockdowns and the lack of drivers and vehicles continue to make it difficult to deliver goods to and from the port. Even with the reopening, Chinese authorities continue to recommend using the port of Ningbo-Zhousan.
Tianjin is now the latest major Chinese port city to go into lockdown. The port of Tianjin is located there – the 9th largest in the world and the 6th in China, operating 18.3 million TEUs per year.
It is known as the gateway to Beijing and is also a critical point of the sea-rail connection with Europe. Operations being gradually normalized at other ports are expected to lessen the possible impacts of the blockades in Tianjin.
It is still premature to predict when 100% normalization of the logistics chain in China, and therefore global production and supply chains, will take place in the coming months.
Source: CNN Brasil
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