Key Amazon Ports Brace for Impact Amid Early River Drought

The Amazon River Basin is facing an unprecedented early drought crisis, with river levels significantly below average for this time of year as reported by NorthStandard. This year, water levels started to plummet as early as June well ahead of the typical late June or early July dry season, sparking widespread concern.

The drought presents a direct threat to the shipping industry marked by potentially severe delays in logistics and port operations. The National Water and Sanitation Agency (ANA) has warned of water shortages in the Madeira and Purus rivers and their tributaries, which are vital for navigation, hydroelectric power generation, and public water supply. Notably, recent reports from ANA and climatology institutes indicate the upper Amazon accumulated below-average precipitation during the rainy season (from November 2023 to April 2024). Coupled with the early onset of the dry season, the event suggests that disruptions to navigation could be even more severe than those experienced during last year's drought.

The drought has already had a tangible impact on several key shipping routes, including the mouth of the Madeira River, the confluence of the Solim?es and Negro Rivers around Manaus, as well as downstream between Manaus and Itacoatiara, and the Tapajos River between Itaituba and Santarém. Other important waterways in the region have also been severely impacted by this unprecedented drought.

In response to this crisis, carriers providing liner services on the Amazon River, including Alian?a (APMollen-Maersk), Log-In, ONE, Mercosul Line (CMA CGM Group), and MSC, are imposing 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 at their current rate, container shipping may have to halt within a few weeks. In this scenario, container cargo to and from Manaus would rely on barges for transshipment via the Vila do Conde Port at the mouth of the Pará River, east of the Amazon.

Previously, some operators redirected containers originally planned for barge transport between Manaus and Vila do Conde to alternative ports along the northeastern coast, such as Pecém and Suape, for onward carriage once river levels rise. The flexible measures may provide valuable insights for easing the current crisis and similar challenges in the future.

Manaus, the largest city and logistics hub in the Amazon region, hosts the busiest container terminal in northern Brazil. It is a crucial transshipment gateway for container cargo from Asia and North America to other countries along the East Coast of South America. Home to the Manaus Free Trade Zone (ZFM), it is a strategic player in consumer goods production and assembly for distribution throughout the country. Moreover, Manaus is a key hub for the supply of food, medicine, and fuel to the western Amazon region, making its stable operation essential for regional economic stability. Therefore, the early drought crisis poses a serious challenge to the region's logistics chain and economic development.