Shippers and port users in Santos, South America’s largest port for containers, are bracing themselves for delays and extra storage costs as customs officers in the port go on strike yet again.
Although all has been relatively quiet in the Brazilian port since June of this year, when an earlier strike ended, Sindifisco, the union for Receita Federal (customs) officers in Brazil, decided Wednesday to carry out a "zero-clearance operation" starting October 16 that will grow into a full-blow strike from November 1, if their demands are not met.
Sindifisco claims that the government of Michel Temer, which is trying to introduce market reforms and slash the state budget, has not kept the promises it made earlier this year regarding wage increases, making a strike the only means of redress.
Brasilia says it has not reneged on the agreements, but that their implementation must take place in 2019 and 2020 rather than 2018 and 2019 in order to help balance Brazil’s finances. The government is also pushing to increase the retirement age for new Receita Federal employees to 65 from 55 and up the amount of pay that employees must contribute to social security to 14 percent from the current 11 percent.
Shippers have suffered several waves of strikes and slowdowns over the past 14 months, with stoppages between September of last year and early January 2017, as well as May and June of this year, when it seemed Temer had given into Sindifisco’s demands.
The union said that they will continue to clear “essential” cargoes such as medicine and hospital supplies, live animals, and food for vessel crews. The slowdown will leave an extra 3,000 containers on the Santos quay each day and cause clearance times to jump to between three and five days rather than the average 24 hours, according to the union.
In practice, say Santos insiders, the customs officers will probably clear about 30 percent of all containerized cargoes. In addition to longer clearance times, expensive storage costs also begin to accrue during these disruptions.
A manager at one of the leading box terminals in Santos said the action has been timed to cause maximum disruption during the pre-Christmas rush and many exporters were rushing to try and get their cargo booked as air cargo so as to meet their contractual commitments.
“They always do it at this time of year for maximum impact,” the manager told JOC.com. “But this year the feeling of anger they have towards the government seems more vehement than in previous years so we could be in for a long haul.”
Jose Roque, the executive president of the Shipagents Association for São Paulo and Santos, warned the slowdowns and strike could threaten the fragile economic recovery underway in Brazil.
“Here we go again,” said Roque. “It is terrible timing for the country. This will almost certainly lead to shortages of certain seasonal products for Christmas, or else oblige the importer to reduce his profits so as not to antagonize his regular customers.”
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