March 10, 2011

Wet Weather Causing Delays at Port of Paranagua in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Recent rains along the coast of Parana have resulted in a backup of trucks and ships waiting to export grain at the Port of Paranagua. Due to a lack of covers for the loading ships, when there is a chance of rain, the holds of the ships must be closed until the rain threat passes. This can greatly slow down the loading process, which has been the case recently at Paranagua.

When the loading process is slowed down, it also slows the unloading of the trucks delivering grain to the port. Approximately 70% of the grain arrives at the port by truck and 30% arrives by train. If the weather is good, the port can load out 100,000 tons of grain per day at its three public berths.

For each ship that can carry 60,000 tons of grain, 42,000 of those tons must arrive at the port by truck. Considering that each truck carries an average of 30 tons that means that each ship requires approximately 1,500 trucks of grain. In past years, each individual trucker determined when he would proceed to the port and the result was legendary lines of trucks waiting to unload. At the peak of the shipping season, these lines sometimes stretched for dozens of kilometers.

The problem of long lines has been solved by locating staging areas in the interior of the state and only allowing a truck to proceed to the port after they have been given authorization. Authorization is not given unless there is space in the warehouse for the grain and there is a ship ready to load the grain. If a trucker proceeds to the port without prior authorization, he will not be allowed to unload and he will also be prohibited from hauling grain to the port in the future.

The rail line that carries grain to the port basically starts at the city of Maringa in western Parana. Trucks from interior states such as Mato Grosso and Mato Grosso do Sul unload their grain at rail terminals and then the train carries it to the port.

The entire system including the infrastructure at the port, the railroad that services the port and the highway system for the trucks is woefully inadequate to handle the increasing volume of grain being produced in Brazil.