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The cost of maritime transport complicates selling food outside the EU

The rise in freight rates - the price to pay for occupying a space on a ship - and the difficulties in finding empty containers are already affecting Spanish exports of some foods to certain parts of the planet, spreading concern to the entire sector.

The Spanish agri-food sector has a clear export vocation. More than 50% of the production is marketed outside the country, and even though its main destination is in the EU, where it's mainly exported by land, in recent years Spain has worked to reduce its dependence on the community market, and maritime transport is essential to export its products to these destinations.

“There is a lack of containers, many of the ships that leave China for the United States arrive in Europe full and you cannot load your products. In addition, we can't forget the Suez Canal was blocked some months ago. It has been the perfect storm,” stated the director of Supply Chain of the Sevillian company Angel Camacho, Ismael Villarrubia. According to his calculations, freight rates have increased by 100% in recent months: "We have gone from paying 2,000 euro to 4,000 euro to ship products to New York."

The situation is having indirect effects that hinder their operations: "We have annual contracts with supermarkets there, so prices don't change even if costs increase; unless the client agrees to negotiate."

This issue also complicates opening new markets, stated Villarrubia. In this case, the buyers tend to make specific purchases and their price varies greatly depending on how much the cost of freight and containers increases, which arouses suspicions among buyers who must pay more for the same product that they bought at a lower price a few months before.

Aguilera, the Catalan law firm that specializes in agri-food exports, stated the problem has been aggravated by the general increase in demand in international trade after the paralysis caused by the pandemic.

However, despite this complex context, Spanish food and beverage exports have managed to continue growing: between January and June 2021 they increased by 10% and totaled 28,769 million euro.

 

Source: efeagro.com 


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