News / Brazilian shippers eye savings by transhipping Europe cargo in Morocco

Brazilian exports to Europe appear to be shifting to Morocco with increased frequency for warehousing, offering a possible ‘twin-win’ for shippers, saving not only storage fees, but also reducing their environmental costs.

Speaking on the sidelines of an event that marked the release of the company’s Global Connectedness Index, DHL Global Forwarding’s chief executive for Middle East & Africa, Amadou Diallo, said more Brazilian volumes into Europe were taking this route.

“Brazil always wants to target Europe and tries to go straight in to distribute, however, if you analyse what is happening in Europe, you see activities outsourced or near-shored to Southern Europe are now moving to North Africa,” Mr Diallo told The Loadstar.

“You still have activities in Portugal and Turkey, but we are also seeing a lot of activities moving to Algeria, Egypt, and Morocco, and these are serving now as a distribution hub for both sub-Saharan Africa and Europe.”

Mr Diallo saw the transhipment opportunities offered by the ports in these North African countries as a key draw for Brazilian shippers, with Tangier proving particularly interesting.

Both Mr Diallo and Orkun Saruhanoglu, CEO of DHL Supply Chain’s Middle East and Africa operations, told The Loadstar the quality of the infrastructure was not only comparable with that in Europe, but “much better priced”.

“And this known by the European shippers that have turned to North Africa for manufacturing and storage. But I think it is also increasingly the case for producers from Brazil and Mexico,” said Mr Diallo.

“It allows them to bring their goods close to market and means that they have access to storage that is not as expensive as what they would be paying if they used space within Europe.”

Another possible benefit for South American shippers making use of the transhipment opportunities from North Africa to the European markets surrounds the EU’s Emissions Trading Scheme (ETS), with the costs of that usually predicated on the final leg.

Following complaints from authorities at the port of Algeciras, the EU designated both Port Said in Egypt and Morocco’s Tangier port as “transhipment hubs”, meaning costs are calculated on full sailing time, rather than the leg from these ports to Europe.

Nonetheless, this would still offer South American shippers an opportunity to cut their ETS costs by stopping at other North African ports unaffected by this provision, resulting in something of a win-win for both shippers and North African logistics operators.

Carriers have also spotted the opportunity offered by cheaper storage, with the likes of MSC developing hubs in West Africa, including at ports in Lome and Tema, with volumes being stored in containers before onward travel to Europe.