Impacts On Shipping Costs In Latin America
Latin America faces surging freight costs, supply chain disruptions, and product shortages due to COVID-19, equipment shortages, port congestion, and blank sailings, impacting imports, exports, and consumer prices unpredictably.
The current Covid-19, Political Situations, the Suez Canal incident and other crises did of course not spare Latin America.
The Region, same as others, was and still is affected by increasing freight charges for containers being shipped, which for example increased for imports from China to the West Coast South America by an astonishing 430% from USD 1.450 per 40’ Standard / High Cube Container in July 2020 to USD 7.700 in April 2021 (*see below chart). Keep in mind, that roughly 40% of the total container volume to countries at the West Coast South America (Columbia / Ecuador / Peru/ Chile) originates in China.
Reasons for this are manyfold:
- Covid-19 measures and restrictions
- Shortage of Equipment (Container)
- Blank Sailings
- Port Congestions
- Shortage of trucks for delivery / pick-up of containers from inland locations
As well as there are other impacts at a local level.
The above not only resulted in higher freight costs, but also interrupted the supply chains, resulting of shortages of products available in supermarkets, retail stores, etc., as well as higher product costs for the end consumer.
Similar effects on the export side, where many of the products exported from Latin America are perishables (fresh fruit,…
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