Shipping Chaos Hits Brazil Coffee, Canadian Grains: Supply Lines
By Fabiana Batista
Getting food where it needs to be around the world is never easy, and it’s been made all the harder this year with the twin forces of pandemic disruptions and climate change.
Take the case of coffee exports from Brazil, the world’s biggest supplier. Shipments have declined since May because of ongoing logistical bottlenecks, according to Marcos Matos, general director at Brazil coffee exporter group CeCafe.
As lockdowns ease and economies rebound, there’s stronger competition for space on container vessels that ship goods around the world. That’s helped to send freight rates soaring, said Matos, who estimates that shipping coffee from Brazil to New Orleans now costs about $4,000 per container, up from a range of $1,500 to $2,000 before the pandemic.
Coffee suppliers who booked shipments at the earlier cheaper rates are now seeing their planned exports get canceled by shipowners, Matos said.
“And it has been very hard to find new bookings” he said.
Meanwhile, drought is drying up key waterways across South America, making it harder to haul crops.
Argentina’s Rosario Board of Trade said this week that the Parana River’s shallowness will increase logistics costs for traders and farmers by an estimated $315 million between March and August. Vessels traversing the river are being forced to lighten their loads because of low water levels. Some ships will then likely top up at sea ports, being forced to pay higher prices for the grain, while others could simply take the hit and sail to destination with fewer supplies.
And in Canada, blame wildfires for causing logistical headaches.
Thousands of rail cars loaded with grain are still idled in the Vancouver corridor after Western Canadian wildfires damaged two main lines.
Train movement resumed earlier this week on the Canadian Pacific Railway line near Lytton, British Columbia, following a June 30 wildfire that burned down the village and damaged the railway’s track. Canadian National Railway’s line sustained more significant damage to a bridge. The bulk of goods — from lumber to grains to crude oil — that are transported by rail for export move along these two lines to the country’s biggest port in Vancouver and south into the U.S.
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