Grains

Study shows use of Panama Canal may reduce freight costs on ‘Northern Arc’ exports by 35%

Feb, 25, 2021 Posted by Ruth Hollard

Week 202109

A study by CONAB (the national supply company) points out that even with the payment of the Panama Canal usage fee, the total costs for exporting bulk through the ports of the Northern Arc can fall by up to 35% if companies and producers use sea routes across the Pacific. The value of the toll through the Panama Canal is calculated based on the value of the cargo transported, with the average cost of passing a ship around US$ 150,000. Depending on the size of the vessel, the value can reach almost double that.
The analysis carried out by CONAB technicians shows the Panama Canal is an important alternative to improve the competitiveness of Brazilian agricultural products, since it may represent less navigation time, with the subsequent reduction in freight, operating costs, fuel, and emissions, among others, as well as enabling the opening of new Asian markets.
Northern Arc Ports
“What is needed to achieve this reduction rate are some improvements in infrastructure to adapt the Brazilian port reality to these opportunities, such as the use of the Panama Canal”, said Thomé Guth, Superintendent of Operational Logistics at CONAB, in a note. “For this reason, some Brazilian companies and port terminals have already signed an international agreement for the exchange of information and technical cooperation with the Panamanian authorities”.
The CONAB study does not provide further details on other international routes for comparison.
Source: Valor Econômico

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