Latin American freight forwarders are not panicking about Trump's tariffs. They are worried about what everything else will cost. South America's supply chains are being rearranged by three forces at once: the US tariff regime, the EU-Mercosur trade deal that took effect in May, and a regional push to rewire how the continent trades with the rest of the world. If you move cargo into or out of Brazil, Argentina, Uruguay or Paraguay, the routing assumptions you used last year need a fresh look.
What Happened
The EU-South America trade agreement, known as the Mercosur deal, came into force in May. It is expected to bring close to half a trillion dollars of investment into South America and to cut costs for consumers on both sides of the Atlantic as tariff lines come down. For forwarders, the practical effect is a slow re-weighting of trade lanes: more European volume moving through Santos, Buenos Aires and Montevideo, and more pressure on inland corridors that were built for commodity exports rather than mixed containerised freight.
Set against that, the Trump tariff regime has so far produced less disruption on the ground than the headlines suggested. Forwarders on the continent report that bookings have held up and that customers have adjusted rather than cancelled. The concern they keep raising with The Loadstar is cost. Tariffs are a line item you can quote around. Inland trucking, warehousing, customs handling and compliance overheads are harder to pass on, and they are all moving in the wrong direction.
Impact on Freight Rates and Operations
Watch the inland leg, not the ocean leg. South America's port-to-door costs have always carried a bigger share of the door-to-door total than they do on Asia-Europe, and a new trade agreement adds volume before it adds infrastructure. Expect congestion at the same three or four gateway ports, longer truck turn times, and demurrage exposure on shipments that used to clear comfortably inside free time.
Rate quotes are also getting shorter. When tariff schedules and customs treatment can change between booking and arrival, carriers and forwarders hedge by narrowing validity windows. If your annual contract assumed 30 or 60-day rate stability on the South America trades, budget for that to tighten. The other operational change is documentation load: preferential origin claims under Mercosur mean paperwork that many shippers on this lane have never had to file before, and a rejected origin claim costs you the duty saving plus the delay.
What Shippers Should Do
- Re-run your landed cost per CBM, not per shipment. Tariff changes hit duty; congestion and inland cost hit every cubic metre you move. Split the two so you can see which one is actually eating your margin.
- Check whether your goods qualify for Mercosur preference. Origin rules decide the benefit. Get your supplier's declarations in order before the shipment books, not after it lands.
- Build in more free-time buffer at Santos and Buenos Aires. Demurrage and detention on congested South American gateways will cost you more than the freight rate difference between two carriers.
- Re-test LCL against FCL at current rates. Volume shifts change consolidation economics quickly, and the break-even point that held in Q1 may have moved.
Key Takeaway
Tariffs are the story people are reading; inland cost and congestion on the Mercosur lanes are the story that will show up on your invoice.
Plan Your Shipment: Use our free CBM Calculator, Chargeable Weight Calculator, and Container Load Calculator for your next shipment.
Source: The Loadstar