Deficits in port infrastructure hamper foreign trade

The National Center for Transatlantic Navigation (Centronave), an entity founded in 1907 that brings together the major long-haul shipping companies operating in Brazil, has provided a series of technical clarifications essential to understanding the country’s current port capacity crisis. The entity’s position comes in response to views considered erroneous regarding normal maritime transport activity and recent interpretations issued within the scope of the Federal Court of Audit (TCU), specifically in the review vote presented in November. Although the goal of these analyzes is to protect the public interest, they are based on operational assumptions that attribute problems that actually relate to physical infrastructure to competitive causes.

For the sector, it is necessary to clarify the reality of daily logistics operations at the docks as a prerequisite for resolving the obstacles plaguing the Brazilian coast. Too often, the narrative is spread that shipowners’ operations in the country will be characterized by oligopolies coordinated to the detriment of users, but market data shows the opposite scenario, characterized by significant competition. The Port of Santos, for example, is currently served by several shipowners actively competing for cargo, including major global players such as CMA CGM, COSCO, Evergreen, Grimaldi, Hapag-Lloyd, HMM, Maersk, MSC, ONE, PIL, Yang Ming and ZIM. This trade dispute is seen as the engine that ensures the efficiency of the system, even in the face of the physical constraints imposed by the absence of construction work.

Faced with rising shipping costs and the fundamental need for operational scale, companies enter into agreements with each other that are strictly operational in nature. These mechanisms allow ships operated by one shipowner to transfer containers from others, enhancing competitiveness and improving logistics. In this context, omission of a stop is not viewed as a business choice by the carrier, but rather as an act of operational desperation resulting from capacity saturation. Data indicates that Santos is currently operating at occupancy rates in excess of 90%, exceeding the 65% efficiency limit recommended by the Organization for Economic Co-operation and Development (OECD), resulting in wait times of 3 to 4 days, according to Centronave.

The hypothesis that shipowners have manipulated the offer of carriage has also been investigated on a global scale. During the COVID-19 pandemic, the US Federal Maritime Commission (FMC) conducted a rigorous investigation into shipping and congestion. The conclusion was conclusive that there was no collusion or abusive practices, but rather a shock of demand in the face of a rigid and saturated infrastructure.

In the debate about “verticalization” when shipowners also operate port terminals, technical competition advocates attest that the fear of market closure is merely hypothetical. The technical demonstrations made by the TCUs (AudPortoFerrovia), the Secretariat of Economic Surveillance (SEAE), the National Agency for Waterway Transport (ANTAQ) and, above all, the Administrative Council for Economic Defense (CADE), have consistently ruled out the need for regulatory intervention on the basis of vertical integration. It is recognized that this model generates efficiencies relevant to port operations and does not involve competitive risks, as shown in the recent archiving of the investigation into “self-preference” and in analyzes of operations involving CMA CGM/Santos Brasil and MSC/Wilson Sons.

In the specific case of the recent acquisition of Santos Brasil, the process was subject to strict scrutiny by CADE. The conclusion expressed in Opinion No. 3/2025 was approval without qualification. The concept is that there is no rational economic incentive for the terminal to close itself to other shipowners, as the operation requires scale to be viable and the capacity of the terminal exceeds the demand of the owner group’s shipowner, forcing it to seek cargo from competitors.

Historically, the entry of vertical terminals in Brazilian ports has been identified as the only factor capable of reducing docking queues in the past decade. Private investments made by companies associated with shipping groups have brought efficiencies where the state was unable to provide, and presented themselves as a solution to a chronic problem retarding national development. Contrary to popular speculation, the terminals operated by these groups have a direct interest in liquidity, because they benefit from the turnover of the ship. Paradoxically, purely standalone terminal models, known as “white flag,” can distort incentives, take advantage of the lack of infrastructure and resulting queues, as well as reduce investment due to the unpredictability of long-term demand.

The analysis in the review vote mentioned above, supported by the 2022 SEAE opinion, is considered inappropriate by the sector because it ignores updated opinions from 2025 and ignores the current scenario in Santos. There would be no basis for claiming insurmountable barriers to entry for independent operators or imposing future restrictions, as CADE itself has classified these risks as merely hypothetical. Technical and regulatory bodies have already rejected vertical flotation as a cause of market failure, recognizing its benefits.

The final diagnosis suggests that the real problem is not the market, but the root cause: the infrastructure deficit. For more than a decade, the Port of Santos has not received a major expansion of its berths. While demand increased and ships increased in size to 366 metres, infrastructure remained stagnant. The annual cost of inefficiency – ships stuck in line – is estimated at R$1.6 billion, which is paid by exporters, importers and, ultimately, the Brazilian consumer. It is estimated that the country has stopped exporting about US$20.6 billion annually through Santos due to infrastructure deficit, according to Centronave.

Centronave reiterates its commitment to Brazil’s development and competitive freedom, highlighting that it is shipping companies that connect national production to the world.

Website: https://centronave.org.br/