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High Maritime Freight Impacts The Price Of Photovoltaic Products In Brazil, Leading Ships To Prioritize Routes To The USA And Europe. Suppliers Expect Adjustments Until August.
The increase in maritime freight is causing a significant impact on the prices of photovoltaic products in Brazil, as ship routes are prioritizing destinations in the USA and Europe. The rise of the dollar and delays in deliveries are also factors influencing the solar energy market, making freight more expensive.
Suppliers believe that this situation may begin to stabilize by August, but until then, costs will continue to rise. The transportation of goods from China to Brazil is facing a weekly increase of US$ 500 to US$ 600 in maritime freight. Furthermore, the high transportation cost is forcing companies to look for more economical and effective alternatives to mitigate delivery delays.
According to sources consulted by Canal Solar, several elements contribute to the increase in maritime freight costs, directly affecting the components of photovoltaic systems. According to experts, photovoltaic modules are the most impacted by this rise, as their added value is lower compared to inverters.
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Maritime Container Transportation Rates 2024
| Destination Country | 20′ Container (USD) | 40′ Container (USD) |
|---|---|---|
| United States (Los Angeles) | 6152 | 7974 |
| United States (New York) | 7089 | 9199 |
| United Kingdom (Felixstowe) | 4712 | 8052 |
| Germany (Bremerhaven) | 4695 | 8001 |
| Australia (Melbourne) | 1756 | 3034 |
| Brazil (Santos) | 6500 | 9500 |
| Netherlands (Rotterdam) | 7300 | 7322 |
The United States and Europe have been paying higher prices for freight to receive products originating from China. This causes ships to redirect their routes mainly to these destinations, to the detriment of the East Coast of South America, resulting in delays in deliveries to the Brazilian market. Additionally, the waiting time for shipping goods has increased due to a reduced number of ships returning routes to this region. Moreover, vessels are only dispatched when the cargo is complete.
Effects Of Blank Sailings On Deliveries
There are also cases of blank sailings, that is, when there is a notice about the cancellation of a ship’s docking at a certain port, partially or totally altering its route. Roberto Caurim, CEO of the importer and distributor Bluesun Solar do Brasil, highlights that another aspect is the drop in Wp (Watt-peak) value of photovoltaic modules in recent months in China, making the transportation of each module proportionally more expensive. According to the entrepreneur, the outlook is that this scenario will persist, at least until the end of the year.
‘This is a scenario that is not expected to change anytime soon. The shipowners do not foresee a drop in values, meaning we are talking about high freight rates, at least until the end of the year, and we continue to monitor this situation’, said Caurim.
Market Outlook For Distributed Generation (GD)
For Eduardo Villas Boas, CEO of the distributor Esfera Solar, the impact of maritime freight on the distributed generation (GD) market should not be analyzed solely based on the recent period of increase. He argues that if the market focuses only on this short time span, it will not be decisive for the sale of products. Villas Boas also comments that there are expectations of adjustments in freight starting in August, as the rise was due to unexpected factors that are now aligning, indicating a possible price reduction by the end of the year.
‘I believe that the GD market should not evaluate the increase in maritime freight considering only the last 2 months. If we analyze this period, it is evident that the cost increase of freight impacts the price of generators for the end consumer, but not to the point of determining whether or not to sell the products’, he emphasized.
Influence Of Exchange Rate Variation On Maritime Freight
Regarding the rise of the dollar, Caurim and Villas Boas commented that the exchange rate variation has influenced both the increase in maritime freight and taxes. ‘Two months ago, I was buying a module for one price, but due to the impact of the dollar and freight, considering an increase of over 15%, we are seeing that many distributors are unable to replenish their stocks’, stated Caurim.
Villas Boas adds that the true impact currently is not only on the freight cost of photovoltaic products but also on exchange rate variation, which affects both modules and inverters and other inputs. He observes that each distributor has a specific reality in terms of stock, payment terms, and strategy, as well as remnants from the previous year, which was a challenging period.
Know How Maritime Transport Works In Brazil
Impacts On The Pre-sale Of Photovoltaic Products
This high scenario affects pre-sales, as some distributors sell products in this modality without considering the fluctuation of freight, which can result in losses. The CEO of Bluesun emphasizes that they avoid long pre-sales precisely to circumvent this problem. ‘I only authorize pre-sale when we already have the products at the port’, he stated.
Villas Boas also points out that the impact on pre-sale depends on the type of project. For complete projects and closure of plants with scheduled shipments, freight does indeed influence negotiations. For smaller day-to-day projects, the impact is less since the distributor only releases the pre-sale after determining the freight cost and completing the shipment.
Difference Between CIF And FOB And Tax Impacts
There are two main shipping modalities: CIF (Cost, Insurance, and Freight) and FOB (Free on Board). In Brazil, the CIF modality, where the freight charge is the responsibility of the supplying company and the cost is included in the final product price, is the most common. ‘When you have a country like ours, where taxation is based on CIF and not FOB, the increase in freight enters the tax chain’, explains Eudes Silveira, director of Port Trade.
The relationship between maritime freight, transportation costs, and exchange rate variation continues to be a puzzle for distributors and importers in the photovoltaic energy sector, who need to balance between high costs and the expectation of a possible normalization of prices.
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