Global Container Crisis Leaves Exporters in Uncertainty

Drifting. Freight from Asia to Callao is quoted at more than US$ 10,000, five times its pre-pandemic value. Local businessmen schedule shipments up to three months in advance.
The rebound in world demand to China and the consequent saturation of ports have led to an increase in sea freight rates. These increases are not a decision made by shipping lines or warehouses, but a consequence of the gradual normalization of the commercial flow, which causes a great demand for space with an expected imbalance in container unloading times.
The delay logically affects exporters, because loading times are now longer. Favio León Lecca, president of the Peruvian Association of Port Operators (Asppor), points out that the price of containers has evolved from the pre-pandemic period to a five-fold increase. In addition, after each service, several of them, damaged en route, are sent for repair to foreign workshops, which are also overcrowded. This results in higher costs for logistics operators.
It should be clarified that most of the small cargo is mobilized through international freight forwarders. They are not regular customers of the shipping lines.
"Before the pandemic, they cost US$ 2,000 - US$ 2,500. After that, they dropped to US$ 1,100 - US$ 1,500, and then they started to go up by the second half of 2020. From there they haven't stopped. Today they are at US$ 10,000, talking about imports from Asia to Callao. Exports have remained at very low levels, less than US$ 300 per container to Asia", he says.
For Moisés Woll, president of the Peruvian Maritime Association (Asmarpe), the world fleet of ships out of service is at its historic lows. He argues that, after the pandemic, there is a sharp rebound in the demand for imported goods from Asia, an imbalance in the number of available containers, which are scarce, and a longer wait in ports for shipments, due to a loss of regular itineraries that forces shipping lines to correct their arrival and departure dates in the main global ports. However, he clarifies that this situation should not be reflected in higher prices for the end consumer, since in many mass consumer chains the impact is minimal.
"Due to various global disruptions, the speed of container turnover has slowed down. If before the pandemic a container on the Shanghai-Callao-Shanghai route took 60 days, today it can take 90 or more. And this is happening worldwide, which generates a great shortage of containers available for imports. Times are extended and costs are altered," he explains.
Exporters adrift
Peru's ports responsible for product traffic have also felt the high tide. The president of the Foreign Trade Services Committee of the Association of Exporters (Adex), Rafael del Campo, explains that the exporters' problem is to manage to meet deliveries, because they know that this may be temporary.
"The exporter prefers to earn a little less, but place his product. A mango, a grape, a tangerine, they cannot wait. What is happening now is that not only freight has increased, but there are no spaces on the ships. They no longer care if they have to pay more, they are losing the opportunity to place their products," he says.
In the case of imports, the outlook is no better, since many goods arriving to our country are worth less than the shipment. Today, import freights from Asia to Europe or the US West Coast cost two to two and a half times more than from Asia to Callao. Xavier Montes, Trade Facilitation Manager of Comex Peru, warns that small and medium-sized enterprises will be the most affected, as they bring products from Asian markets, the area where freight costs have increased the most. Meanwhile, entrepreneurs in the agro-industrial and textile sectors, mainly, will only have to disrupt their schedules.
"There is not much availability of ships or spaces to export. There are shipping lines that offer a reasonable freight price, but they do not have space to ship until September. In other words, exporters would have to book from now on and that brings many logistical difficulties," he says.
Keys
Dams. Building a vessel takes two years and can cost more than US$ 150 million. In order to offer a weekly direct service to Callao, 10 vessels are needed.
Containers. They went from US$ 2,000 in 2019 to more than US$ 10,000.
Reactions

Moisés Woll, president of Asmarpe
"Not all increases should be reflected in a price increase to the final consumer, as it happens with the exchange rate that directly increases the cost of imported products".
Favio León Lecca, president of Asppor
"It is expected that all maritime traffic will normalize at the pace of the sanitary problem and a better ordering of global manufacturing flows, exports and imports."
Rafael del Campo, Adex Services Committee
"Companies have to make decisions on what they are going to move two or three months in advance, and sometimes pay 'caprice'. The shipping company never loses, this is not going to stop until 2022".
Source: La República newspaper