Ports: Growth of coastal shipping may rebalance national logistics

Navigation and Maritime Chartering of Foreign Vessels was the theme of a panel at the Summit on Maritime, Port, and Customs Law (Alexsander Ferraz/AT)

The advancement of cargo transportation via coastal shipping (cabotage) in Brazil, encouraged by the BR do Mar Program (Federal Law 14,301/2022, whose presidential regulatory decree is expected in May), is essential to rebalance the national logistics matrix by reducing the overload on highways and promoting a more sustainable transportation mode.

This was the conclusion of participants in the first panel of the Summit on Maritime, Port, and Customs Law, held this Tuesday (29th) by Grupo Tribuna in Santos. The panel theme was Navigation and Maritime Chartering of Foreign Vessels.

Challenges to growth The panelists made it clear, however, that the expansion of cabotage — which is navigation between ports within the country — faces structural challenges, such as a shortage of Brazilian-flagged vessels, bottlenecks in the shipbuilding industry, difficulties in chartering foreign vessels, and a lack of qualified labor.

The need to increase the capacity of the national fleet was a recurring concern. According to José Roberto Duque, Commercial Director of Aliança Navegação e Logística, cabotage accounts for only 3% to 4% of Brazil’s transport matrix, compared to approximately 35% to 40% in countries like China and the U.S. “We have a lot of room to grow. It’s our job to convince customers that cabotage is worth it”, he said.

He highlighted Aliança’s recent effort to dry-dock one of its ships at the Port of Suape (Pernambuco) as a show of support for the national industry. “After years of doing it abroad, we brought it to Brazil using the Merchant Marine Fund.”

Chartering and legal certainty The chartering of foreign vessels is seen as an immediate solution to meet growing demand but faces regulatory obstacles. Bruno Stupello, Operations Director at Santos Brasil, emphasized the need to unlock old lease agreements so terminals can invest and better serve coastal shipping. “We’re talking about increasing capacity, having more cabotage vessels available to attract more cargo with a more efficient mode. But we also need to address the terminal's ability to invest and expand capacity during the contract period. We have more efficient and sustainable equipment, but bureaucracy hinders replacement.”

Flávia Takafashi, Director of the National Agency for Waterway Transportation (Antaq), explained that the agency's regulation is essential for legal and operational security. “Cabotage will not be opened to foreign companies; only vessels may be chartered by authorized Brazilian companies. This ensures control and safety.” She warned that the lack of regulation could lead to the entry of vessels with lower technical standards: “Safety is not optional.”

For attorney Marcel Nicolau Stivaletti, from RMM Advocacia, the protection of the sector must be strategic. “BR do Mar expands the possibilities for chartering, but it requires companies to have a national base. Antaq has been careful in applying the law, even in the absence of a regulatory decree.”

Importance of regulation Although some see regulation as a hindrance, the panelists agreed on its importance. “To regulate is not to stifle, it’s to protect. It ensures that only those who are qualified participate in the market”, said Takafashi.

Attorney Eliane Octaviano Martins, Director of the Maritime Law Academy, emphasized that Brazilian regulation also fulfills international commitments: “Brazil is a signatory to treaties that require safety and sustainability standards. It’s not enough to sign them; we must comply.”

She added that cabotage is strategic for decarbonization goals and Brazil’s accession to the Organisation for Economic Co-operation and Development (OECD).

The second panel of the event addressed the importance of the BR do Mar decree with experienced professionals from the port sector: the discussion was highly technical and constructive (Alexsander Ferraz/AT)

Regulation soon to be issued Awaited for three years, the regulation of the Cabotage Transport Incentive Program, known as BR do Mar, is just weeks away from being signed by President Luiz Inácio Lula da Silva (PT). The government expects the ceremony to take place at the Port of Suape (Pernambuco) on May 20.

“BR do Mar has already brought great benefits, such as expanding the use of cabotage and increasing competition. Last year alone, we saw a 25% increase in containers. But part of the law still depends on a decree, specifically the section on chartering foreign vessels”, said Mariana Pescatori, Executive Secretary of the Ministry of Ports and Airports.

She also emphasized that the regulation will pave the way for the concept of sustainable vessels. “The more green vessels a company brings in, the more foreign vessels it will be allowed to charter. That will be highly relevant.”

Labor and inclusion Attorney Nathália Caroline Fritz Neves, from Salomão Advogados, praised the promotion of the sustainable vessel concept with an environmental focus but also highlighted the social aspect, promoting decent work and non-discriminatory job opportunities. “We need to pay attention to this, but it must be effective. Obligations, in a way, limit activity. But we should encourage regulation through incentives.”

Judge Frederico Messias, coordinator of the Maritime Law Studies Center at the Escola Paulista de Magistratura, also stressed the strategic importance of the legislation. “I’m a liberal and a market advocate. But there are sectors of the State that must be thought of strategically, and cabotage is one of them.”

Investment environment Attorney Marcelo Sammarco, from Sammarco Advogados, said Brazil needs to take advantage of its natural vocation for coastal shipping. “It’s not enough to just have regulation and a law that supports and fosters investment. We need infrastructure that can meet this demand. This also involves labor. But the decree should pave the way for expansion in this segment”, he stated.

In the view of Patrícia Lia Brentano, Product Manager at Norcoast, chartering is “the least of the problems” currently affecting coastal shipping. “We need to reduce the bureaucracy surrounding cabotage and port logistics in Brazil. It’s important to show how our business is sold so all sectors are on the same page. We need urgency to solve our problems. There are other bottlenecks”, she added.

Anticipation for the decree Attorney Pedro Calmon, from PCFA Advogados and a specialist in Maritime Law, says the decree expected on the 20th will be a significant milestone. “It brings BR do Mar into our reality. We benefit from many provisions that came with the law. Even though it doesn’t directly promote domestic shipbuilding, by allowing the chartering of foreign-flagged vessels, it fosters the development of the national merchant marine, encouraging new players to enter the market.”