Container overbooking causing delays for Brazilian exports: Maersk

Brazilian exporters are suffering from delays in container shipping, reports Reuters, due to overbooking, said AP Moller-Maersk on Monday August 27th in its Q2 report.

Coffee and cotton were two of the exports affected, Maersk said.

The company noted that exports from Brazil had fallen for the second quarter in a row, and noted that some exporters had been reserving more space in ships than they needed, meaning that other companies failed to find room for their cargo.

“Exporters are hurting each other when they book space they end up not using, because that increases costs and poses obstacles to other exporters that can’t find space in ships,” said Antonio Dominguez, Maersk’s director for East Coast South America.

Brazil is harvesting its largest coffee crop ever this year, while Maersk said a large cotton crop was also a factor behind shrinking shipping space.

Other commodities such as grains and bulk sugar are not facing the same problem, because they are exported in bulkers rather than containers.

Maersk said that the overbooking issue started after several container operators reduced trips to Brazil in 2016, following a fall in imports amid a major Brazilian recession.

Overbooking increased this year after a nationwide truckers strike and a large cotton crop. Exporters feared a logjam when the May strike finished.

Brazilian coffee and cotton shipments via containers fell by 9% year on year in Q2, according to Maersk.

Shipments of containerized sugar fell by 33% year on year and overall Brazilian exports through containers fell by 6% in Q2 compared with Q2 2017.

The company said that one possible solution for the overbooking problem would be to charge for the space when it is reserved, as airline companies do, but said that no decision had yet been made.