Finally, some good news for shippers using the troubled Brazil Port of Santos, South America’s largest for containers, as the long-running job action by customs officers (Receita Federal) may be on the verge of breaking up.
As of Thursday, officials have suspended the job acton/strike — which began November and was ramped up just three weeks ago — until the end of July. The suspension decision was implemented after delegates from the National Sindifisco and a politician close to Brazilian President Michel Temer reached an agreement; if all goes well during ongoing peace talks, the job action/strike could be over, for good.
About 10 days for port customs clearance to return to normal
The net impact of the above on shippers and freight forwarders will be an eventual reduction in overdue containers, as well as an eventual reduction in the customs clearing time delay.
According to several sources in Santos, including port authority Codesp, there are currently about 5,000 containers waiting to be cleared by customs at Brazil’s leading port, which handled 3.83 million TEU in 2017, and will likely handle 4 million TEU in 2018, despite the long-standing job action by the customs officers and the 10-day truck drivers’ strike that brought the port, as well as much of Brazil, to a standstill. In addition, the extra days it now takes to clear export containers is seven; for import containers, 12 days, according a Santos-based customs broker.
A spokesperson for the Santos customs brokers association told local media that it would take about 10 days for the customs export and import clearance procedures to get back to normal. He added that usually the Port of Santos customs clears 80 to 100 declarations of imports per day but during the strike it cleared only about 10 per day.
The peace deal appears to have been brought about by the intervention of Rodrigo Maia, president of the Chamber of Deputies (Camara dos Deputados) in Brasilia, who met with Sindifisco leaders this week in Brasilia and promised to persuade Temer to accept the original government/union agreement — an above-inflation-rate wage increase and renewal of the union’s existing (and generous) pension terms. Both the Temer administration and Sindifisco had agreed to — but not signed — the terms in 2016.
After Maia’s promise, Sindifisco union leaders in Santos voted 19 to 15 to discontinue the job action/strike until August 1. On May 15, Sindifisco’s national and Santos leaders implemented a five-day-per-week strike — albeit while allowing through emergency and medical goods, plus some perishables, as well as 10 percent of other cargo. That action followed a ‘go slow’ and ‘no computer days’ job action two days per week that had been in force since November. The union had planned to continue that action for two months — through July 15 — but has ended it, due to Maia’s intervention.
Temer’s goal: reduce budget deficit
The Temer administration had stalled in implementing the agreement because he has been trying to reduce Brazil’s huge budget deficit, which he inherited from impeached former president Dilma Rousseff. (Temer succeeded Rousseff in August 2016.) Temer is trying to stem public sector wage increases and reduce pensions costs. However, after the country was brought to a standstill by the truck drivers’ strike — which lasted 10 days from May 21 to June 1 — Temer gave in to all truckers’ union demands, much to the chagrin of shippers, who were then expected to pick up the bill for higher trucker freight rates.
Renato Tavares, president of Sindifisco Santos, said that the Maia plan was worth considering and the Temer administration should be a given a chance to finally sign the agreement and end further actions.
“However,” Tavares said, “if the president does not sign the agreement then we will have to return to the same form of strike action until we get it signed.”
The national branch of Sindifisco has also ruled that the offer from Maia seems to be “a reasonable one” and said it should be given time to work, but the branch vowed to return to full strike action on August 1 if the Temer administration does not adhere to the terms and conditions agreed to with the union back in 2016.
Ray of light for Brazil
One experienced shipping agent in Santos told JOC.com that Brazil’s reputation had been damaged and that many beneficial cargo owners were still suffering the aftereffects of the truck drivers’ strike and the customs officers’ job actions, but this surprise turn of events was “very good news indeed.”
“It would seem that common sense has prevailed,” said an experienced shipping agent, who spoke on condition that he not be identified. “There has been a feeling that the customs officers were not acting in the national interest by stepping up their dispute just after the truckers resolved most of their issues. I guess the Sindifisco leaders felt that blackmail and ratcheting up the pressure was the way to get what you want, as proven by the striking and blockading truckers. But now I guess even they feel guilty that the country is suffering so much. We need our exports to run smoothly so that we can boost our economy. Finally common sense and compromise are prevailing.”
José Roque, the executive director for Sindamar (the Santos and São Paulo ship agents’ association) said that due to the delays and economic damage caused by the truck drivers’ strike and the ensuing Receita Federal job actions, it would still take another 30 days or so to “get things back to normal,” including the backlog of thousands of containers throughout Brazil.
“It will still take time to resume normal operations after Santos port users have taken a terrible and sustained battering.” Roque told JOC.com, “But it is still a great relief that there will be a cessation of actions from the Receita Federal for the time being. Things have improved a lot since the truckers’ strike but there is still way to go before we can get back to normal.”
Contact Rob Ward at firstname.lastname@example.org.