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July 3, 2023

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32 Journal of Commerce | July 3, 2023 Latin America Trade and Logistics Special Report At the same time, scheduled container ship capacity between Brazil and the US has been rising and is now at its highest level in two years, thanks in part to a new service launched during the first quarter, according to Antonella Teodoro, senior consultant with transport con- sultancy MDS Transmodal. "Some 398,576 TEUs [of capacity] was scheduled in the second quarter 2023, the highest since at least the first quarter 2021, when scheduled capacity was 386,945 TEUs," Teodoro told the Journal of Commerce. As a result, spot rates on the trade have continued to fall, drop- ping by nearly half in June from the previous month. Fabrizio De Paulis, managing director of Brazil-based forwarder De Paulis Logistics & SCM Eirel, said carriers were quoting all-in spot container rates on the benchmark Santos-New York route of $1,715 per FEU for June bookings. That includes a basic freight cost of $1,032 per FEU, plus a bunker surcharge and carrier security fee. By comparison, carriers were quoting all-in spot rates of about $3,500 per FEU from Santos to New York for May bookings, down from an average of $5,000 per FEU in April and $10,000 per FEU at their peak in June 2022. "The Santos-New York rate lev - els haven't been this low since the beginning of 2018, when I used to ship on a weekly basis on this lane," De Paulis told the Journal of Com- merce. "It is now possible to book SHIPPERS AND CARRIERS will have to wait another three or four months before container freight demand and pricing pick up on the north-south trades connecting North America with Central and South America, according to forwarders operating on those lanes. Carlos Fuchs, director of Brazil- based forwarder Royal Cargo, pre- dicted that demand — which along with increased capacity has dragged spot rates to their lowest level in more than five years — will remain stable for the next two months. "I believe volumes should start to increase from September or October," Fuchs told the Journal of Commerce. "High inventory levels held in the US over the last two years should have cleared this year and firms and consumers should start buying more from Latin America, including Brazil. At least, that's what I believe — and hope — will happen." According to Fuchs, average monthly volumes from Brazil to the East Coast of North America, not including transshipment cargo from Paraguay and Uruguay, fell to around 20,000 TEUs in the first quarter from 25,000 TEUs in the same quar - ter last year. Key US imports from Brazil include furniture, machinery, elec- trical and electronic equipment and agricultural products. Ocean carrier executives that spoke to the Journal of Commerce on background said they agreed that demand on the north-south trades appears to have stabilized. Stefan Lambauer / Delayed bounce Lackluster north-south demand, rates to rebound in Q3: forwarders By Keith Wallis, Special Correspondent

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