High Freight Rates Could Impact Global Economy and Raise Prices of Products on Brazilian Tables

Written by Valdemar Medeiros

Published on 15/01/2021 at 10:25

Navio cargueiro em alto mar

Be the first to react!

High In International Freight Should Make Products More Expensive For Brazilians And Affect The Economy

In less than a year, container freight jumped 300% and the estimate is for more increases in the Brazilian economy and various products; adjustments are already affecting Brazilian imports and making business unfeasible.

The Cost Of The Pandemic

The COVID-19 pandemic increased the cost of imports from China. Since the beginning of last year, the price of freight for containers originating from the Asian country headed to Brazil rose 300%, from US$ 2,500 to US$ 10,000 in the economy of the Northern Region.

In Brazilian currency, the price went from R$ 12,900 to R$ 51,900, according to a survey by the transport company ES Logistics. At the ports of Santos, the busiest in the country, and Paranaguá, the value is around US$ 7,300, but the outlook is that it will exceed five digits soon. The adjustments are already affecting Brazilian imports and making business unfeasible.

ARTICLE CONTINUES BELOW

The Freight Adjustment

The adjustment was also driven by pent-up demand triggered by the drop in consumption that occurred between March and June. This demand has still not been fully met.

“These are the two main causes (for the increase in freight prices), but the impression we have is that there has been a change in consumption patterns. In the past, Brazilians would stop importing when the dollar reached R$ 5.10. Now, the dollar has reached R$ 5.60 and imports haven’t dropped,” noted the director of ES Logistics, Fabiano Ardigó. “It seems that business owners are going to pass this cost on to the final consumer.”

Fewer Routes

Raquel Rossi, Director of International Purchasing and Finance at Empalux in Curitiba, highlighted that it is difficult to avoid increases in Chinese freight prices and that the hike needs to be absorbed by the company.

“It’s unfair not to have much action regarding these freight rates, but besides the high freight rates, there is the lack of space on the ship. The number of routes has decreased significantly. We believe that shipping companies are taking advantage of this moment to profit.”

The last freight considered within 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$ 7,700. And experts estimate that this amount will reach US$ 10,000. If predictions hold true, importers will have to absorb an accumulated increase of over 600% in one year.

High Freight Rates Could Impact Global Economy and Raise Prices of Products on Brazilian Tables

High In International Freight Should Make Products More Expensive For Brazilians And Affect The Economy

Read Also

The Cost Of The Pandemic

The Freight Adjustment

Fewer Routes

With billions in loans, China is rebuilding Nigeria’s railway network from scratch, abandoning the British colonial tracks that have turned to scrap and creating a corridor of over 1,300 km to take the load off the roads of Africa’s largest economy.

A British company has installed in the middle of the ocean the world’s first floating platform that generates electricity 24 hours a day from the temperature difference between the surface and the depths of the Atlantic, without relying on wind or sun.

China is building an artificial island in the middle of the sea, covering 20 km², to construct the largest offshore airport in the world, the Dalian Jinzhouwan. This $4.3 billion project is anchored on more than 3,000 pillars embedded in the rock beneath the ocean and is scheduled to open in 2035.

Forget petroleum-based asphalt: a Scottish company transforms 684,000 plastic bottles into one kilometer of road that is 60% more resistant and up to 10 times more durable, and the technology has already started replacing traditional asphalt in more than 30 countries.

A robot named Walter does the work of five bricklayers per hour and can save the construction industry, where the average age of professionals is 46 years and almost no one wants to learn the trade anymore, in the United Kingdom.

Austrian engineers have developed an inflatable concrete technology that transforms flat slabs into domes using only air pressure, eliminating scaffolding and temporary forms, and potentially changing the way bridges, tunnels, and curved roofs are constructed worldwide.

The James Webb telescope spotted a planet 700 light-years from Earth with mornings full of sand clouds and nights with clear skies, the temperature difference between the two hemispheres reaches an impressive 170 degrees.

Black Hawk helicopter carries 24 basalt rocks weighing up to 2 tons through narrow Australian valleys to rebuild a 100-year-old dam, after floods destroyed the structure and forced engineers to transform the aircraft into a flying crane.

At 30 km altitude and nearly 7,000 km/h, the 14-X demonstrator of the Brazilian Air Force tested a scramjet engine without moving parts in Alcântara, in a project with the ambitious goal of reaching Mach 10, which has just received a historic investment of R$ 93 million from Finep.

A window-sized device, without electricity or filters, managed to extract potable water from the dry air of Death Valley using only sunlight, in an MIT study published in Nature Water that gives new impetus to a technology crowned with the Nobel Prize in Chemistry in 2025.

Giant Boeing 777 model receives official Boeing paint, cut-out windows, and functional lights, but first flight with final look reveals landing gear problem, lost tire, and battery adjustments until achieving perfect landing.

High Freight Rates Could Impact Global Economy and Raise Prices of Products on Brazilian Tables

High In International Freight Should Make Products More Expensive For Brazilians And Affect The Economy

Read Also

The Cost Of The Pandemic

The Freight Adjustment

Fewer Routes

With billions in loans, China is rebuilding Nigeria’s railway network from scratch, abandoning the British colonial tracks that have turned to scrap and creating a corridor of over 1,300 km to take the load off the roads of Africa’s largest economy.

A British company has installed in the middle of the ocean the world’s first floating platform that generates electricity 24 hours a day from the temperature difference between the surface and the depths of the Atlantic, without relying on wind or sun.

China is building an artificial island in the middle of the sea, covering 20 km², to construct the largest offshore airport in the world, the Dalian Jinzhouwan. This $4.3 billion project is anchored on more than 3,000 pillars embedded in the rock beneath the ocean and is scheduled to open in 2035.

Forget petroleum-based asphalt: a Scottish company transforms 684,000 plastic bottles into one kilometer of road that is 60% more resistant and up to 10 times more durable, and the technology has already started replacing traditional asphalt in more than 30 countries.

A robot named Walter does the work of five bricklayers per hour and can save the construction industry, where the average age of professionals is 46 years and almost no one wants to learn the trade anymore, in the United Kingdom.

Austrian engineers have developed an inflatable concrete technology that transforms flat slabs into domes using only air pressure, eliminating scaffolding and temporary forms, and potentially changing the way bridges, tunnels, and curved roofs are constructed worldwide.

The James Webb telescope spotted a planet 700 light-years from Earth with mornings full of sand clouds and nights with clear skies, the temperature difference between the two hemispheres reaches an impressive 170 degrees.

Baly, a manufacturer from Santa Catarina that surpassed Red Bull and Monster to take the lead in the Brazilian energy drink market in December, is moving forward with the new factory in Araranguá, expected to create over a thousand jobs and begin operations in the second half of 2026.

The shortage of bricklayers is already making renovations more expensive in Brazil and forcing property owners to change the way they hire labor, while delayed projects, rework, low qualifications, and lack of planning are turning small constructions into increasingly costly headaches.

Grupo Equatorial tops the national Abradee ranking and places three distributors among the highest rated by major energy clients.

Government announces more than R$ 7 billion in investments in Amazonas on a single Wednesday, the package includes a controversial highway, energy for 75,000 people in communities, new ports, and the largest order in the Brazilian naval industry in a year.

The largest meat cooperative in Brazil estimates that it would need to hire an additional 11,000 workers on top of the current 51,000 just to produce slightly less than today, if Congress approves the end of the 6×1 schedule and the 40-hour workweek.

Black Hawk helicopter carries 24 basalt rocks weighing up to 2 tons through narrow Australian valleys to rebuild a 100-year-old dam, after floods destroyed the structure and forced engineers to transform the aircraft into a flying crane.

At 30 km altitude and nearly 7,000 km/h, the 14-X demonstrator of the Brazilian Air Force tested a scramjet engine without moving parts in Alcântara, in a project with the ambitious goal of reaching Mach 10, which has just received a historic investment of R$ 93 million from Finep.

A window-sized device, without electricity or filters, managed to extract potable water from the dry air of Death Valley using only sunlight, in an MIT study published in Nature Water that gives new impetus to a technology crowned with the Nobel Prize in Chemistry in 2025.

Giant Boeing 777 model receives official Boeing paint, cut-out windows, and functional lights, but first flight with final look reveals landing gear problem, lost tire, and battery adjustments until achieving perfect landing.