Prophecies that a lack of a coordinated response to capacity issues in Brazilian ports would lead to gridlock have become a reality. Adverse weather conditions, strikes, legal disputes and five years of export-led growth in containers have left Brazilian ports struggling to keep pace with the demands of shippers and shipping lines. Container lines calling in the south of the country have been facing waiting times that are a throwback to conditions in Brazilian ports more than 10 years ago. Average waiting times to berth in ports such as Sepetiba have reached 42 hours over the past three months.

Julian Thomas, Hamburg Süd’s director for Brazil said, “We have had a very bad winter this year that has affected the ports and there are draught limitations. There are times when, because of swell and because the channel has not been dredged yet, we have a draught of 11 m in Santos, which means that ships with greater draught — practically all the ships leaving — were stuck in the port.” Delays to ships leaving the port have the knock-on effect of forcing those wishing to enter to wait. Shipping lines and groups such as FIESP, the powerful industrial group representing shippers in the state of São Paulo, have been lobbying the government to take swift action to resolve the issue by drawing up a framework that will prioritize much-needed investments.

Delays have varied widely from port to port in the past two months due to a range of diverse problems. Santos, South America’s largest port handling 1.3m teu a year, had an average waiting time of 6.7 hours in July and 20 hours in August. In the first weeks of September this rose to 36 hours. “The port of Santos is operating at its limit,” says Marcelo Procopio, director of Brazilian port consultancy Vector. “Santos Brasil, on the left bank, has been facing problems, with delays to the shippers wanting to deliver their export boxes and even to consignees wanting to take possession of their cargoes. “The effect is that last month, for example, they had to stop receiving containers for five days in a row.” Tecon Grande, Brazil’s second largest container terminal, suffered delays of 36 hours in July, 17.5 hours in August and 10 hours this month. Some 45 vessels cancelled scheduled calls at the port in July and August to avoid delays and miss berthing schedules at other ports. Without these cancellations average waiting times would have been worse. Paranagua’s private container terminal, TCP, has suffered 64 cancellations and respective average waiting times of 23 and 33.8 hours in July and August. Ships calling at Sepetiba Tecon are experiencing an average waiting time of 42 hours.

Rates are going up. A $300 general rate increase for all trades has been introduced from July 1. A further GRI for $200 will be introduced from October 1. The appreciation in the local currency has resulted in terminal handling rates for the lines increasing by a third in dollar terms. The natural consequence for Brazilian shippers is a further increase in logistics costs, which are already some of the highest in the region. A study undertaken by the World Bank saying it takes 39 days to export and 43 days to import a container in Brazil is a statistic that costs the country’s exporters billions of dollars in lost revenues each year. According to the study, which was undertaken before these issues became critical; the world average is 27 days with developed countries such as the US and Britain scoring fewer than 10 days. The recent delays have only served to exacerbate the problem, adding to the turnaround time of Brazilian boxes.