Amazon Faces Early Drought Impacting Shipping And Trade

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The Amazon region is experiencing an unusually early drought, with river levels already falling below average for this time of year. Typically, the drought season begins between the last week of June and the first week of July. However, this year, water levels started to drop in the first half of June, reports North Standard.

Consequences

The drought may impact shipping activities, causing logistical and port delays in the region. Correspondent Proinde said that the National Water and Sanitation Agency (ANA) has declared water shortages in the Madeira and Purus rivers and their tributaries, which are critical for navigation, hydroelectric generation, and public water supply. The measure was taken more than two months earlier than last year when the Amazon basin suffered its worst drought.

Recent reports from ANA and climatology institutes indicate that the upper Amazon accumulated below-average precipitation during the rainy season (from November 2023 to April 2024). This trend has continued into the current dry season, which started earlier than usual, and is expected to disrupt navigation to a similar or even greater extent than last year.

As explained, the drought hinders navigation in critical stretches, such as the mouth of the Madeira River, the confluence of the Solimões and Negro Rivers around Manaus, as well as downstream between Manaus and Itacoatiara, and on the Tapajos River between Itaituba and Santarém. Other regionally important waterways also suffer from drier-than-normal weather.

Container trade

Manaus, the largest metropolis in the Amazon region, hosts the busiest container terminals in northern Brazil, where containers shipped from Asia and North America and transhipped in Central American ports are offloaded and carried to other national ports down the East Coast of South America on feeder vessels. Manaus is also home to the Manaus Free Trade Zone (ZFM), where consumer products are manufactured or assembled for distribution throughout the country via cabotage. The capital of the state of Amazonas is also an essential hub for the distribution of food, medicines and fuels in the Western Amazon.

However, due to the severe drought reducing the carrying capacity of the ocean-going ships, effective 1 August 2024, carriers offering liner services in the Amazon, including Aliança (A.P.Mollen-Maersk), Log-In, ONE, Mercosul Line (CMA CGM Group), and MSC are levying a temporary Low Water Surcharge (LWS) on the freight of all containers to or from the port of Manaus. If the river levels continue to drop as forecasted, containership traffic may be halted in a few weeks. In this scenario, containers bound for or arriving from Manaus will need to be transported by barge through the port of Vila do Conde (Barcarena), on the mouth of the Para River, east of the Amazon.

Amid last year’s drought crisis, instead of relying on barging between Manaus and Vila do Conde, some operators diverted containers destined for those Amazon ports to alternative ports on the northeast coast, such as Pecém and Suape, for onward carriage once river levels rise.

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Source: North Standard