Block Background

Rising costs of exporting Timber from Brazil

Rewind 12 months, and the timber industry, like many others, saw a huge increase in sea freight prices. Especially from China. However, this same surge in prices is now the case for sea freight coming from Brazil and South America. And it happened very quickly.

 

History of the increase in sea freight prices from China

 

At the later end of 2020, a huge surge in sea freight prices from China was an issue for many sectors. The coronavirus pandemic saw delays at ports and a reduced workforce. This meant that emptying containers, and filling them back up again took much longer than before. Which caused a huge build-up of shipping containers, and therefore a world shortage of shipping containers. As many were simply stuck in ports.

Sea freight prices from China were previously around $2,000 for a 40’ container. But today this has increased dramatically to around $18,000- 19,000 for the same size container.

 

The Suez Canal blockage

 

Back in March 2021, the Suez Canal blockage certainly aggravated the world’s issues with sea freight. The 6-day delay saw hundreds of ships stuck behind the ‘Evergiven’ vessel. As the canal sees around 12% of global trade pass through it every single day.

 

The current situation in Brazil

 

During the coronavirus pandemic, the sea freight prices from South America remained untouched and unchanged. However, in the past few months, this has changed dramatically.

At Think Timber, we have been told that the reason for this out-of-the-blue increase in prices is due, again, to a lack of shipping containers.

This quick and very sharp increase in price has seen quotes of $1,500 in August, now skyrocketing to $11,500 for the same size container. In just 3 months, the price has increased by 666.6%. With ‘ongoing logistical bottlenecks’ blamed as the main reason for this increase in costs.

 

What this means for the timber industry

 

As the increase in sea freight prices coming from China continued for around a year, this is a concerning time for Brazilians and their overseas customers. Brazil has around 3.7 million hectares of forest that is under sustainable management. Meaning this market is very important for the timber industry and supplying it.

The latest increase in sea freight prices in Brazil is yet another issue for industries and businesses all around the world. And as economies open back up and lockdowns ease, the global competition for sea freight is only increasing.

 

Get in touch

 

At Think Timber, we are aware of the intense pressure that the whole industry is facing. With each stage of the supply chain affected by the increases in sea freight prices.

To discuss the increase in sea freight prices for containers coming from Brazil and South America, and how we can help with your timber supply, get in touch at hello@thinktimber.co.uk

 

Resources used:

BBC News

Tropical Timber Market Report

Bloomberg