Coffee exporters suffer from freight rate hike caused by pandemic

Apr, 01, 2021 Posted by Ruth Hollard

Week 202115

The chaos in world shipping – caused by the shutdown of the global industry due to the pandemic and subsequent hike of up to 500% in sea freight prices –  is being reflected in the exports of several commodities. The coffee segment is one that is finding it difficult to sell its production abroad.

According to CECAFÉ (the council of coffee exporters in Brazil), shipping agencies are imposing abusive and undue costs on Brazilian coffee shippers abroad. According to the entity, the collections generate an additional cost of over R$ 100 million per year for exporters.

For the president of CECAFÉ, Nicolas Rueda, the arbitrary charges and abusive procedures by the maritime agencies are diverse and continue without being deterred by ANTAQ. According to him, these charges are partly due to the great concentration in the sector and the asymmetries of sectorial regulation.

CECAFÉ states that among the various improper procedures carried out by shipping agencies are the lack of transparency in the amount of reimbursement of the Terminal Handling Charge  (THC) and tax evasion by most Brazilian maritime agencies; the abusive charges of the Export Logistic Fee (ELF) for the management of containers; and the Bill of Lading issuance charge (BL charge).

The council asked Eduardo Nery, CEO of ANTAQ (the national waterway transport agency) for a solution, and said it would send documents to support the agency in its analyses of the THC and emissions of ELF, B/L charge, and seals.

It is worth noting that Brazilian coffee exports grew by 26.5% in February compared to the same month in 2020, as can be seen in the following graph:

Brazilian Coffee Exports (HS 0901) | Jan 2017 to Feb 2021 | TEU

Graph source: DataLiner (To request a DataLiner demo click here)

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