Dec 19, 2013

New Rule at Port of Paranagua to allow "Express Line" for Vessels

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

Authorities at the Port of Paranagua in southern Brazil are going to institute a new program called Rule 126 starting in January of 2014 that will give loading priority to vessels that will use fewer exporters to load gran at the Public Corridor. The goal of the new rule is to speed up loading at the port and reduce the waiting times for vessels.

Many of the vessels that load grain at the Public Corridor originate their grain from different exporters and the switching back and forth between exporters and grain terminals results in increased congestion and delays. A study by port officials indicates that over the past ten years, the majority of vessels obtained grain from an average of four exporters with some vessels only loading from one exporter and others from as many as seven exporters. Port officials calculate that 9,000 hours of potential loading operations were lost this past shipping season due to this switching.

The new rule would allow a vessel to enter the "express line" if it is scheduled to load at least 18,000 tons of grain from any one individual exporter and the vessel was not scheduled to load grain form more than three exporters. One of the three berths at the Public Corridor will dedicated to this "express line" while the other two berths will handle vessels normally. The activation and deactivation of the conveyor belts and shiploaders when switching grain terminals can take up to four hours thus delaying loading. The ultimate goal of this new rule of course is to give incentives for vessels to load as much grain as possible from the fewest exporters possible. Officials hope the new rule could improve loading efficiency by as much as 10%.

In a recent meeting in Sao Paulo, importers have indicated that implementing the new rule in early January is not practical because more than 50% of the new export contracts have already been signed and it would be unfair to penalize the multi-stop vessels by forcing them to the back of the line so to speak. Smaller exporters have also complained that the new rule will give the larger exporters an advantage.

The Port of Paranagua is the second largest grain exporting port in Brazil behind the Port of Santos. From January through November of this year there were 18 million tons of products including soybeans, corn, soybean meal, and soybean oil exported from the Port of Paranagua. During the same period in 2013, the port moved 16.5 million tons of products.