PARAGUAY: INLAND LOGISTICS
NEW PATHS FOR PARAGUAY Low water in the River Parana waterway is prompting fundamental changes in inland container logistics and new port gateway selections
8 River Parana waterway is suffering its worst drought since the 1940s
Suffering its worst drought since the 1940s, the River Parana waterway system, that feeds into the River Plate and is the main transport artery for Paraguayan export and import cargoes, has seen barges and vessels grounded over the past year with trucking companies taking up some of the slack; and charging heavily for the privilege! Among the main beneficiaries of a “newly developed, substitute Paraguay transport network” are the ports of Montevideo, in Uruguay, and Paranagua, in southern Brazil, and even Valparaiso, over the high Andes in Chile, which is a 1370 mile journey by road. Those vessels and barges that are able to negotiate the tricky and unstable water levels are having to operate sporadically and at only 50 per cent of capacity due to draft restrictions, and as a result have to charge a premium to make a profit. During “normal” years this traffic – from Paraguay to Uruguay/Argentina - totals around 220,000TEU per annum, including empties. Figures from the Directorate of Meteorology and Hydrology in Paraguay (DINAC) show that this year water levels at Asuncion, Paraguay’s capital and key river port, rose from 0.9 meters (2.9 feet) on January 1, up to 3.3m by February 1 and peaked at 4.63m on February 14, near the height of the rainy season in Brazil’s interior, the source of the water. They then fell rapidly down to 1.77m by March 8 and to below 1m by May 19 when the Low Water Level (LWL) season kicked in. This has led to stringent draught restrictions and long delays with boxes waiting for up to six weeks (instead of the usual average of seven days) for transshipment windows,
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In addition, deep-sea carriers – with MSC leading the way with a 45 per cent share (48,343TEU) of the Paraguayan transshipment market for the first nine months of this year who relay transshipment cargoes from Montevideo and Buenos Aires to/from worldwide destinations are regularly frustrated by the “unpredictability” of the feeder services as this plays havoc with their timetables and berthing windows. One terminal operator in Montevideo reports that around 15 per cent of all deep-sea calls have been cancelled as carriers “cut and run” rather than get embroiled in long delays and “lose the use of empties for several weeks if they get involved in the River Plate basin messy delays”. Paul Gunther, Managing Director of Maritime Service Line Paraguay (part of MSL Corporate), an NVOCC, told Port Strategy that during the first nine months of this year Paraguay, taking into account both exports and imports, generated 124,692TEU of full containers and suggested that distribution had shifted in several ways, “with far more boxes being moved by truck than usual”. The latter figure represents a 10.3 per cent increase over the 113,056TEU handled in the same period in 2020. For the whole of 2020 transshipment to Montevideo and Buenos Aires (BA) totalled 153,094TEU of full containers, down from 160,547TEU in 2019, and 181,398TEU in 2018, the last “normal year” before the extremely LWLs kicked in (figures from the Association of Paraguayan Shipagents). The latter’s members are the main owners of the Paraguayan fleet of barges and self-propelled vessels, which is the thirdlargest fleet of inland vessels in the world after those operated by the USA and China. The fleet comprises around 1000 units for bulk as well as container transport.
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