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Brazil export boom short on shipping containers

Thursday May 20, 12:50 pm ET
By Reese Ewing

SAO PAULO, Brazil, May 20 (Reuters) - A shortage of shipping containers in Brazil has created a transport imbalance for exporters as a weak currency has dramatically boosted demand for goods abroad to levels the country has not seen for years.

However, export sector specialists said on Thursday exporters are having to pay higher premiums as a result of the increased freight costs.

"It costs about twice as much to ship goods in a container from Brazil to Europe as it does from Asia to Europe," said Thomaz Zanotto, director of Bolsa1.com -- an online commodities brokerage and auction site.

At Latin America's largest port of Santos, which accounts for about 30 percent of Brazil's international trade, exports grew nearly 16 percent to 39 million tonnes in 2003 over the previous year, while imports grew under 7 percent to 21 million tonnes, or to about half of the port's export volume.

"Containers are in tight supply. Since we don't operate a sea transport company, it simply shows up as higher freight costs that we are charged for shipping," said Herbert Lopes Szeszula, a trade manager in Brazil for logistics company DHL Express owned by Germany's Deutsche Post (XETRA:DPWGn.DE - News).

About 95 percent of world trade is by sea, and many goods are transported in 20 foot or 40 foot containers, including refined sugar, coffee, cotton, petrochemicals and any number of manufactured goods ranging from cars to shoes.

Brazil's only container maker Paulista Containers Maritimos stopped making containers after 1995 because it couldn't compete with Asia where most of the world's containers are made today, the firm's operating director Jorge Coelho told Reuters.

"The growing demand for containers here and the higher price of steel has made us more competitive with Asia now. We expect to re-enter the maritime market soon," Coelho said.

Paulista Containers Maritimos, part of the British group Sea Containers, currently only makes containers for the non-maritime domestic market, mostly for the telecom and offshore energy sectors.

Maritime logistics consultants Centronave-Datamar said demand from strong economic growth in Asia, specifically China, has been sucking up world commodities and natural resources and drawing shipping into the region.

"With the higher price of shipping heading out of Brazil, exporters have been forming partnerships to make the most of the tight space available. They are sharing the same containers and tight shipping space," commercial statistics consultant Luis Gonzaga at Centronave said.