Why new Covid cases in China could exacerbate maritime transport crisis and keep freight expensive | agribusiness

The lockdown adopted in more than 10 cities in China last Tuesday (15), after the new outbreak of Covid-19, could worsen the crisis in the maritime transport of exported products, in addition to maintaining the high value of freight, say experts. of the sector.

Since last year, producers face the lack of containers and delays in export and import deadlines due to the high demand for goods in the return of commercial activities, until then paralyzed by the Covid pandemic.

In Brazilian agriculture, the cotton and meat sectors recorded losses due to the delay in shipments.

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The freight price went from US$ 2 thousand to US$ 10 thousand for each container, in the case of the route to Brazil, according to data from the National Confederation of Industry (CNI), in July 2021.

The scenario was expected to improve in 2022. However, the new restrictions in China will postpone the expected relief, says Wagner Rodrigo Cruz de Souza, executive director of the Brazilian Association of Retroport Terminals and Container Transport Companies (ABTTC),

“With the restriction in ports in China due to Covid, in addition to the climate with the war in Ukraine, there will soon be cargo congestion, delays and the freight will not be able to get smaller. If the flow is not normal, there is no way to reduce the shipping,” he said.

Container shortages affect exporters worldwide — Photo: REUTERS/Aleksander Solum.

The biggest logistical problems in maritime transport must be registered in Shenzhen, a Chinese city that has one of the busiest ports and is home to technology companies.

“The situation is complex and serious, as the logistics sector has been suffering from a lack of containers and vessels. If a ship is cancelled, it has to go to another port and this will accumulate and create congestion. The lockdown will certainly create the effect waterfall”, explains Leandro Barreto, who is managing partner of Solve Shipping Intelligence, a logistics and foreign trade consultancy.

“Congestion will increase, there will be port terminals with difficulty in removing cargo, such as those in the agribusiness sectors, and also in sending it for export”, he points out.

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Regarding the price of shipping, Barreto believes that the values ​​will be high, but they should not grow as happened at the height of the pandemic.

“The price increased a lot between 2020 and 2021, going from US$ 2 thousand to almost US$ 15 thousand each container between China and Brazil. In January this year a new operator entered the route, reducing freight to about US$ 6 thousand. But, with the lockdown, we no longer have the prospect of this decline continuing. It has already taken away all hope of improvement this year.”

“The whole world is experiencing inflation and there is still a reflection of the pandemic in international cargo transport. Therefore, exporters of wood, sugar, meat and cotton may be affected”, he explains.

What do exporters say?

The zero tolerance for Covid in China leaves everyone alert for a worsening in the transport scenario, according to the director general of the National Association of Cereal Exporters (Anec), Sérgio Mendes.

“China has a zero-tolerance policy for Covid, which is still a more distant concern. We will be alert. So far, what is known is that for soybeans and corn we have not had any news of an impact on transport yet,” she says.

“In the case of grains, both the departure from Brazil and the arrival in China take place through a variety of large ports, so that any reduction in activities in a particular port does not affect or worry Brazilian grain exports” .

The president of the Sugarcane Planters Cooperative (Coplacana), Arnaldo Bortoletto, says that the climate is one of uncertainty. “There’s not much to do at the moment. We know it’s going to affect the next few days. It’s all very uncertain. You can’t wait for anything.”

The National Association of Cotton Exporters stated that it has not yet registered an impact on cotton exports.

See questions and answers about the biggest Covid outbreak in China in 2 years

See questions and answers about the biggest Covid outbreak in China in 2 years

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