Private terminals help fuel Brazilian economy

The new regulatory framework for the Brazilian port sector, Law 12,815/2013, defines new terms for private use terminals (TUPs), providing greater legal security and attracting investment in infrastructure. This increases efficiency and attracts a greater number of players.

Despite the current economic outlook, this more stable regulatory framework allows private enterprise to plan and take risks based on economic and financial feasibility studies focused on market conditions, leading to improved productivity and efficiency gains. This has allowed the Brazilian port sector to become more attractive and viable and will help the country to become more internationally competitive, encouraging capacity increases and fuelling economic growth.

According to the federal government’s Department of Ports, 34 TUPs have been authorised since the promulgation of Law 12,815, including new authorisations and expansions of existing terminals, with estimated investments of R$10.4bn ($2.97bn). Total investments are estimated at R$22bn.

According to ANTAQ, the National Agency for Waterway Transportation, those terminals that started up after the passing of the new law handled 40.9m tonnes, equivalent to 38.7% of the total handled by TUPs in 2015. In the container segment, TUPs accounted for 26% of the total in 2015, versus 15% in 2005. Also in 2015, TUPs were responsible for handling 75% and 36% of cabotage general cargo and containers, respectively, highlighting the growing share of private terminals in the country’s economy. According to ANTAQ’s 2015 yearbook, the volume of containers handled by TUPs increased last year, while the volume handled by public ports declined.

Broader outlook

While new private investments are being assessed, there should be a focus on the wider context. The improvement in the Brazilian port system needs to go hand-in-hand with improved management and a reduction of costs throughout the entire logistics chain. Modern and efficient terminals are just one step; in order to ensure a better quayside in the future there is a need to improve access channels and manoeuvring areas, as well as ensuring adequate drafts. We also need to implement systems for monitoring navigability conditions, adjust the number of people employed by the various agencies involved and optimise their procedures. In these difficult times, marked by low economic activity and limited investments, all the variables that have an impact on logistics costs need to be assessed in detail.

Independent of whether a port is public or private, the port sector is unanimous in its desire for an efficient regulatory environment that encourages and streamlines investments. The expected outcomes, aside from innovation, include recouping the depreciation of installed infrastructure. The measures adopted are also expected to support a recovery in economic activity.

The new Port Law represents a step in this direction, especially through its encouragement of more private terminals. Increasing foreign trade requires better infrastructure, adjustments to the cost structure and higher productivity.

Therefore, it is vital to identify and unblock obstructions to port operations that have a negative impact on costs and productivity: the efficiency of the logistics chain as a whole is just as important as port operation performance.

Osmari de Castilho Ribas received a degree in Economics from the Catholic College of Administration and Economics in Curitiba (PR) in 1981 and has a post-graduate diploma in Economic Engineering, specialising in Human Resources Management. He has been chief administrative officer of Portonave S/A – Terminais Portuários de Navegantes since 2001.