BRAZILIAN PORTS' CONGESTION SPURS CARRIERS TO SEEK HIGHER CHARGES

BRAZILIAN PORTS' CONGESTION SPURS CARRIERS TO SEEK HIGHER CHARGES

It's going to get a lot more expensive to ship containers to or from Brazil, especially in the major ports of Santos and Rio de Janeiro, if the trade's top shipping lines have their way.

The Inter-American Freight Conference, which represents 11 of the top shipping lines in the trade, is asking for an estimated 7 percent increase in general rates, a congestion surcharge in Rio de Janeiro and the doubling of the existing congestion surcharges in Santos. So far, the Brazilian government has turned down the requests for increases, saying they need more justification. The increases are tentatively scheduled to take place Sept. 9."They (Brazil's government) have had committees discussing the problems down there," said Ted LeBlanc, the conference administrator. "But the carriers have not seen any improvements. And they have costs attributed to the delays."

Those delays include the several days many ships wait outside Santos for a berth in South America's biggest port because there is no room to store containers. The backlog of containers and the poor shape of many of the terminals causes more delays because it takes longer to load and unload ships once they get docked.

"It cost us $15,000 to $20,000 a day to run these ships," said Rich Beedenbender, the vice president of marketing for the Americas division of Sea-Land Service Inc., a conference member.

The conference is asking for a general rate hike of $130 for a 20-foot container and $260 for a 40-foot box. The actual rates vary according to type of cargo.

The conference also wants to start a congestion surcharge for Rio de Janeiro of $75 for 20-foot container and $125 for 40-footers. And it wants to double the Santos surcharges, started in May, making the added cost $250 for each 20-foot box and $500 for 40-footers.

Normally, shippers would protest such increases. But some top shippers for the South American trade say they see why the carriers want to charge more money in Brazil. They, too, blame the government.

"The work that needs to be done, needs to be done down at that end," said David Movsky, the worldwide maritime business manager for Eastman Kodak Co.

"In this instance, I think there is some justification," said Rich Murray, manager of distribution for Corning Inc. "I think they have a reasonable problem and they are incurring reasonable debts."

Shippers said carriers have told them if the Brazilian government continues to deny the increases, the lines will increase the inland carrying costs in the United States.

Officials at Companhia Doca Do Estadado, or Codesp, the port administration in Santos, would only say that there are new members on the agency's board who have not had enough time to review the problems yet.

The congestion problems started about two years ago when Brazil opened its doors to imports. Since then, more cargo has landed in Brazilian ports than the country could handle. And it's kept coming, especially from the United States. The number of 20-foot containers, or their equivalent, carrying exports from the U.S. East Coast to the East Coast of South America in the first half of 1995 rose by 65 percent from the first half of 1994, according to the U.S. Global Container Report, released by Port Import/Export Reporting Service, a unit of The Journal of Commerce.