Drought in Amazon hampers logistics for enterprises in Manaus Free Trade Zone
China News Service, Manaus, Brazil, November 9th: Logistics has been hampered by drought in the Amazon. Enterprises in the Manaus Free Trade Zone hope that Brazil will improve its local industrial output capabilities.
On November 8, local time, in Brazil’s largest free trade zone in Manaus, Miguel Marialva, who was in charge of logistics, stood in a large raw material warehouse with almost nothing to do. Production should be in full swing to prepare for the upcoming peak sales season, but now tens of thousands of shelves of air-conditioning raw materials and finished products are almost empty.
Drought continues in the Brazilian Amazon, and shipping and logistics have been suspended in many tributaries of the Amazon River. The Brazilian Amazon State Government issued a drought advisory on the 8th, stating that all 62 municipalities under the state’s jurisdiction are in a state of emergency. The Brazilian federal government has invested 138 million reais in dredging waterways, with the Madeira River, a logistics artery, expected to be completed within 30 to 45 days.
Marialva, the supply chain manager of a home appliance company in the Manaus Free Trade Zone, expressed that the lack of imports has caused unprecedented difficulties for the factories in the area. The Manaus Free Trade Zone, the center of Brazil’s electronics industry, is heavily dependent on shipping on the Amazon River. However, the low water levels in the main tributaries have led to the suspension of shipping and an increase in logistics costs.
Logistics director Lucas shared that more than 50% of the Amazon River’s shipping capacity has been suspended, forcing companies to seek alternative delivery methods. This has resulted in increased costs and extended waiting times for shipments.
Wang Weizhen, the person in charge of a Chinese-funded air-conditioning manufacturer, stated that the company is negotiating with shipping companies to change delivery methods due to the drought. He emphasized the impact the drought could have on the annual sales plan of the air-conditioning industry.
As a result, many companies in the Manaus Free Trade Zone are now focused on accelerating the cultivation of local upstream and downstream supply chain companies in Brazil, hoping to improve Brazil’s local industrial output capabilities and reduce the reliance on material imports.
Xue Yuxiang, director of the quality and engineering department of a Chinese-funded electronics manufacturer, emphasized the importance of continuous localization and improving Brazil’s local industrial output capabilities in order to reduce the risks associated with relying on sea transportation.
Wang Weizhen also expressed hope that the Brazilian government will encourage companies with environmental protection concepts and independent research and development capabilities to participate more in local manufacturing.
The drought in the Amazon has taken a toll on logistics and production in the Manaus Free Trade Zone, prompting a shift towards improved local industrial output capabilities in Brazil. As the region continues to grapple with the impact of the drought, enterprises are working to ensure a more stable and resilient supply chain for the future.