Logistics has been hampered by drought in the Amazon, and companies in the Manaus Free Trade Zone hope Brazil will improve its local industrial output capabilities – China News Service

China News Service, Manaus, Brazil, November 9th:Logistics has been hampered by drought in the Amazon. Enterprises in the Manaus Free Trade Zone hope that Brazil will improve its local industrial output capabilities.

China News Service reporter Lin Chunyin

On November 8, local time, in Brazil’s largest free trade zone in Manaus, Miguel Marialva, who was in charge of logistics, stood in a large raw material warehouse with almost nothing to do.

Production should be in full swing to prepare for the upcoming peak sales season, but now tens of thousands of shelves of air-conditioning raw materials and finished products are almost empty.

Drought continues in the Brazilian Amazon, and shipping and logistics have been suspended in many tributaries of the Amazon River. The picture shows on October 16, the local government sent personnel to dredge the river channel at David’s Marina, a tributary of the Amazon River in Brazil.Photo by China News Service reporter Lin Chunyin

The Brazilian Amazon State Government issued a drought advisory on the 8th, saying that due to the continued drought in the Amazon, all 62 municipalities under the state’s jurisdiction are in a state of emergency. The Brazilian federal government has invested 138 million reais in dredging waterways. Among them, the Madeira River, a logistics artery, will cost 100 million reais to dredge 12 kilometers and is expected to be completed within 30 to 45 days.

“Now 95% of the raw materials cannot be delivered,” Marialva said. “Due to the drought in the Amazon, the factory in Manaus is experiencing unprecedented severe difficulties.”

The Manaus Free Trade Zone gathers hundreds of factories above designated size and is the center of Brazil’s electronics industry. Marialva is the supply chain manager of a home appliance company in the Manaus Free Trade Zone and has been in the industry for nearly 40 years. According to him, the Manaus Free Trade Zone is located in the center of the Amazon rainforest, and logistics is extremely dependent on shipping on the Amazon River. Imported raw materials and components arrive at Brazilian ports by sea, and then transported to the Manaus factory via Amazon River shipping, while finished products are also shipped to various parts of Brazil.

At present, the water levels of the main tributaries of the Amazon River, such as the Negro River, the Madeira River, and the Tapajós River, which are the mainstays of local shipping, are at historically low levels. In many ports in Manaus, reporters saw many ships stranded and large cargo ships parked at the docks and standing still.

On October 17, many ships ran aground at docks along the Rio Negro, a tributary of the Amazon River, in Manaus, Brazil.Photo by China News Service reporter Lin Chunyin

Lucas, the logistics director of a factory who came to the terminal to discuss logistics plans, told reporters that more than 50% of the Amazon River’s shipping capacity has been suspended, and a very small number of containers can be “crowded” on small barges. The freight per box has increased by more than 10,000 reais, and the voyage distance It has also been extended from the past 3 days to 10 days.

Wang Weizhen, the person in charge of a Chinese-funded air-conditioning manufacturer, told reporters that he is currently negotiating with shipping companies such as Maersk to change the delivery method of parts, or to change the delivery method from another port farther away – Fortaleza to another remote port by land. The port of Belém and then to Manaus are “extremely inefficient and the logistics cost doubles.”

According to the reporter’s understanding, many ports such as Fortaleza Port and Santos Port, which are alternatives to the Manaus Port, have also suffered from doubling of outbound cargo, limited supply of trucks and containers in Brazil, logistics delays, and increased waiting time for shipments. , causing traders’ costs to increase and export time to be extended.

Wang Weizhen said that the company has been deeply involved in the Amazon for more than 20 years and has prepared for rainy season production. The material safety inventory is about one and a half months, and factory production will not be greatly affected. However, he also admitted that October to February next year is the golden period for air-conditioning sales in Brazil. If the drought in the Amazon continues unabated, it will indeed have a comprehensive impact on the annual sales plan of the air-conditioning industry.

At the same time, many companies in the Manaus Free Trade Zone told reporters that they are accelerating the cultivation of local upstream and downstream supply chain companies in Brazil, with the intention of improving Brazil’s local industrial output capabilities and getting rid of the logistics restrictions of material imports.

Xue Yuxiang, director of the quality and engineering department of a Chinese-funded electronics manufacturer, said that in the long run, the way to relieve the drought lies in “continuous localization” and more firmly improve Brazil’s local industrial output capabilities, “which can not only help Brazil’s ‘re-industrialization’, It can also reduce the uncertainty risk of relying on sea transportation and make local supply delivery more flexible and resilient.”

“We sell 100% of our own brands in Brazil, and we have opened up the Brazilian market with our own brands.” Wang Weizhen said, hoping that the Brazilian government will encourage companies with environmental protection concepts and independent research and development capabilities to participate more in local R&D and production in Brazil. Go into manufacturing. (over)