Increase in international freight should make the arrival of products at Brazilian homes more expensive and affect the economy

In less than a year, container freight jumped 300% and the estimate is the highest in the Brazilian economy and several products; readjustments already affect Brazilian imports and make business unfeasible.

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The cost of the pandemic

The new coronavirus pandemic has raised the cost of imports from China. Since the beginning of last year, the price of shipping containers from the Asian country to Brazil has risen 300%, jumping from US$ 2,5 to US$ 10 in the economy of the North Region.

In Brazilian currency, the price went from R$ 12,9 thousand to R$ 51,9 thousand, according to a survey by transport company ES Logistics. In the ports of Santos, the busiest in the country, and Paranaguá, the value is around US$ 7,3, but the perspective is that it will exceed five figures soon. The readjustments already affect Brazilian imports and make business unfeasible.

The United States is now the biggest consumer market for Chinese products and, with the pandemic, which has reduced the supply chain, containers sent to US importers are taking longer to return to China. The lack of containers, however, is just one of the factors that caused the rise in freight prices.

The freight adjustment

The readjustment was also driven by repressed demand triggered by the drop in consumption that occurred between the months of March and June. This demand has not yet been fully met.

“These are the two main causes (for the rise in freight prices), but the impression we have is that there has been a change in the consumption pattern. In the past, Brazilians stopped importing when the dollar reached R$5,10. Now, the dollar has reached R$ 5,60 and imports have not dropped”, noted the director of ES Logistics, Fabiano Ardigó. “The entrepreneur seems to be passing this cost on to the final consumer.”

Fewer routes

Director of the International Purchasing and Finance sector at Empalux, in Curitiba, Raquel Rossi pointed out that it is difficult to circumvent the Chinese freight price adjustments and that the increase needs to be absorbed by the company.

“It's unfair not to have much action on these freight values, but in addition to the high freight, there is a lack of space on the ship. The number of routes has greatly decreased. We believe that the people on the ships are taking advantage of this moment to win.”

The last freight considered within the normal standards contracted by the company, on December 9, 2019, was US$ 1.285,08 for a 40'NOR container. Today, the amount paid for the same type of equipment, with the same origin and destination, is approximately US$ 7,7. And experts estimate that this value will reach US$ 10. If forecasts are confirmed, importers will have to absorb an accumulated increase of more than 600% in the period of one year.