Logistics Costs Rising: Companies Aim at Brazil

As a result of the global trade imbalance that has become evident in the last year and the considerable increase in logistics costs, Guatemalan importers are beginning to look to Brazil as an option to replace purchases from Chinese companies.

Thursday, June 17, 2021

In early March of this year, CentralAmericaData reported that as a result of the imbalance faced by world trade flows, shipping lines have changed their routes and prefer to move empty containers to Asia, a situation that at that time already generated shortages and caused increases in transport rates.

In this scenario of low profit margins, Guatemalan businessmen are already analyzing other options to import products by the end of the year, such as doing business with Brazilian companies.

You may be interested in "Enterprise Solutions: Logistics Applications"

Gabriel Escobar, general manager of Ranero Logistic, told Prensalibre.com that "... since the beginning of the month importers began to place their orders to factories in China and the payment of advances to ship the goods, however, I confirm that the increase in freight costs is a concern that may reduce volumes."

Escobar confirmed that "... other importers are analyzing purchasing options in Brazil, for footwear, clothing, toys, and other goods for the end of the year season, as a substitute for suppliers from China, while those traders who have inventory that they did not manage to place in 2020, will now market it."

Usually in June, Guatemalan importers make the liquidations of the goods that are imported and that will be marketed in October, November and December.

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More on this topic

Logistics Mismatch Pushing Costs Upward

March 2021

Due to the imbalance in world trade flows, shipping lines have changed their routes and prefer to move empty containers to Asia, a situation that generates shortages and causes increases in freight rates and raw material prices.

In this scenario of new commercial reality, the operating costs of maritime freight have been impacted, since due to the restrictions imposed in several countries around the world, containers have been stranded.

Maritime Transports: Costa Rica - China Route Suspended

November 2019

Because of the lower-than-projected volume of cargo shipped on the September and October services, the maritime route between Port Moin and Shanghai was suspended.

In recent weeks the situation has turned unexpectedly, as late last month Costa Rican exporters announced that they planned to negotiate for 2020 an increase in the frequency of the route, however, the low volume of cargo sent to the Asian giant, caused the interruption of service.

Costa Rica - China Route: More Frequencies Managed

October 2019

Costa Rican exporters are negotiating to change the frequency of the maritime route between Port Moin and Shanghai from monthly to weekly from February 2020.

The service began last September 22, when the ship of China Ocean Shipping Company (Cosco), shipping company of the Chinese government, arrived at the Container Terminal of Moin, and left on September 23 after loading products such as pineapple, banana, meat and orange juice.

Less Connectivity, More Expensive Products

August 2019

Since mid-July, the main companies transporting maritime cargo from the Port of Santa Tomas in Guatemala stopped operating the direct route to Europe, which will raise between 20% and 25% the costs of imports and exports.

After six decades of keeping the direct route to European ports in operation, the main shipping companies departing from Puerto Santo Tomás de Castilla in Izabal such as Maersk, Hamburg Sud, MSC, CMA-CGM, Hapas Lloyd and Sea Trade, decided not to re-operate the route concerned, leaving only one company with a multipurpose transport ship as an option to move cargo to Europe.

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