Freight to export wood to distant countries such as India increased up to 700% compared to the price prior to the COVID-19 pandemic

The main products exported by sea are bananas, shrimp, cocoa, fish, broccoli through refrigerated containers, whose main destinations are Northern Europe, Asia, the Mediterranean countries and the United States.

The entry of 2022 car models takes longer than normal due to the maritime transport crisis

The most demanded imports are machinery, vehicles, plastics, chemical products, electronic equipment and other merchandise that arrive in dry containers from Asian countries, the United States, the west coast of South America and Europe, says Vice Admiral Milton Lalama , Executive Director of the Ecuadorian Maritime Chamber.

The Freight to export teak to India increased this year to 700% compared to the values ​​paid before the pandemic, says Tania Wazhima, president of the Ecuadorian Association of Producers and Marketers of Teak and Tropical Woods.

The Teak export generated foreign currency to the country for $ 32.4 million last year. It was a product considered revealing in 2020 by the Ecuadorian Federation of Exporters (Fedexpor) because its sales abroad increased 183% compared to 2019, but the container crisis suddenly stopped the increase this year.

On Last August there was a 40% drop compared to the same month of 2019, which is comparable since in 2020 there was an unusual increase due to the reactivation after the stop of the previous months. “The situation is critical, we are affected by the shortage of containers and the closure of maritime routes to India, the main destination for national teak.”

With congested ports, priority is not given to containers with dry goods, such as wood. “The most perishable ones like cocoa are prioritized,” says Wazhima.

The shipments to India are made by two routes. The one enabled is the one to the north, which passes through the Panama Canal, the Mediterranean Sea and the Suez Canal to the Indian Ocean, to reach the second most populated market in the world.

And the suspended route was the most used for being direct through the Pacific Ocean, transshipping in the ports of Hong Kong, China and Singapore, where teak loads were stranded for months before reaching their final destination.

“We normally ship up to 1,500 containers with teak per month, but in September a maximum of 300 would be exported. We always prefer the direct route to Asia because it is safer as there is less risk of the cargo being contaminated with drugs, ”says Wazhima.

The northern route is more popular with the mafias. “Two months ago we had problems at the terminals due to attempts to contaminate the containers (on the stopovers in Europe), but we have to use it under the circumstances.”

The concern is that producers have to make long-term investments of 15, 20 or even 25 years and every 12 months maintenance tasks in the plantations. “Certain trees are cut per hectare, not doing so affects the quality and the final harvest, then we will lose the opportunity to place that wood at good prices because it was not properly maintained and in the end the expected return is not obtained. The producer is the one that suffers the most from these problems in the logistics chain worldwide ”.

Marianela Ubilla, president of the Ecuadorian Banana Exporters Association (AEBE), also reports on the impact on banana and plantain shipments due to the maritime transport crisis. “We have a 60% increase in the cost of freight for banana export, which has increased gradually since January of this year”.

As the demand for the use of containers increased, freight prices rose, he says.

Only those for export to China flow at reasonable prices, adds Ubilla, since the Asian giant demands these containers.

In addition there are delays in shipments. “The advisable for bananas is up to 45 days of transit in controlled atmospheres and a maximum of 38 in normal conditions, but this year we have had up to 80 days due to delays, so the fruit already arrives lost and ripens at the destinations.”

The option has been to collect cargo insurance, since the buyer of the banana does not pay for the damaged cargo.

“However, not everything can be covered because you have to have proof and many times not even the shipping lines want to accept that they have been delayed. It is like a health insurance, in which an investigation is carried out and the following year the premiums go up due to the high accident rate, ”says Ubilla.

Another problem is the increase in the price of the cardboard used to send the fruit due to the reduction of the imported raw material used in its manufacture (paper). (I)