With more twists and turns than a mile-long corkscrew, the tender for the prestigious Tecon Santos 10 container terminal has witnessed a couple more key developments since we last visited the process
Firstly, Maersk and MSC, the two joint owners of Brazil’s largest container terminal Brasil Terminal Portuaria (BTP), were, surprisingly to many, excluded from Round One of the bidding process for the Reais5.6Bn (US$1.015BN) project by the Brazilian authorities, including ANTAQ, (the National Waterborne Transport Agency).
But then, far less surprisingly, the two Mega Giants of the shipping world decided to appeal against the decision and rounded up a bevy of lobbyists to back up their arguments. Maersk filed a lawsuit calling for “procedural corrections to ensure a fair process” to the tender for the controversial project. This appeal was turned down by Judge Paulo Cezar Neves, stating that the maritime authorities had designed the tender process in a legal way. However, the judge also made it clear that the two multinationals could bid in the second round if no other company had met all the requirements in the first round.
COMPETITION EMPHASIS
Brasilia’s argument is that it preferably wants a new operator in Santos to stir up more competition. There are also fears in Brazil that the Verticalisation policies of the major carriers (whereby they have a stake in many levels of the transport matrix, not just ocean transport), are creating “quasi monopolies” and “future freight price increases”. The TCU (federal audit court) is still reviewing the tender but is not expected to overrule Antaq (which laid down the rules in the first place). The tender document is now expected to be released in September or October of this year and the Ministry of Ports and Airports hopes the auction will take place before the end of the year.
For the record, the exclusion of existing terminal operators from bidding on a new concession is an option that has been fielded before in the international container terminal market. Some may also see the irony in Maersk raising a legal challenge to being excluded when in the Port of Aarhus, Sweden it recently raised a legal challenge with the port authority against allowing MSC in as a new terminal operator. In this case it is clear that it wanted to maintain its exclusivity!
URGENT NEED FOR CAPACITY
The urgent need for more container capacity in Santos, South America’s largest port for containers, is self-evident.
Leandro Caselli Barreto, a director for the Solve consultancy based in Sao Paulo, confirms that there is a “desperate need” for more container capacity throughout Brazil, but “especially in Santos”.
“Through Santos we have seen phenomenal increases,” states Barreto. “During 2024 Santos throughput was up by 15% [up to 5.48m TEU], and the same increases have been experienced during the first five months of this year. In tonnage terms it was up 18.5%.
“And throughput for all Brazil was up 20% in 2024, up from 11.3m TEU to 13.9m TEU, so even with a new terminal the size of Santos Brasil [now operated by CMA CGM], of 2.6m TEU a new major terminal will barely cover the annual increase from last year. It’s been more than 10 years since a new terminal opened in Brazil, and we desperately need more now.”
Tecon Santos 10 will occupy an area of 621,900 sq m, have 1.3km of quay and an initial capacity of 500,000TEU in its first year of operations, scheduled for January 2027, and an eventual capacity of 3.5M TEU per annum by the year 2034.
With the (very likely) sidelining of three big shipping line players (Maersk, MSC as well as CMA CGM, who, as a result of buying Santos Brasil, has also been excluded via the new rules), it seems that JBS, the international meat packer now trading on the New York Stock Exchange (NYSE), is the favourite to win the bid.
JBS FAVOURITE STATUS?
Although it will face fierce competition from several sources – including International Container Terminal Services Inc (ICTSI of the Philippines, PSA of Singapore, Hutchison Ports, China Merchants (already operating out of TCP, Paranagua), Cosco (hoping to build on their success in Chancay, Peru) and HMM of South Korea. It now seems to be generally acknowledged, however, that the Brazilian owned JBS, the worlds largest producer of beef (with meat products exported to 180 countries and 2024 revenues of US$77BN), is the front runner, largely due to two of the shareholders, Joesley and Wesley Batista, “having the best contacts and greatest influence in Brasilia, where the final decisions will be made.” “They know how to pull the strings to get things done,” as one well-placed source acknowledged.
Powerful voices from the Maersk and MSC camps -especially Patricio Junior, Regional Investment Director for TIL, the stevedoring arm of MSC - are arguing that the “experienced, international players” are essential for the tender process. JBS Terminais only started handling boxes in October of 2024, taking over, ironically from Maersk’s APM Terminals operation in Itajai. New services were added and Reais250m of investments in equipment and infrastructure, and now around 140,000TEU per annum – mostly chicken and pork, plus wood exports – are being handled.
Another slice of irony is that the first service to call Itajai under JBS Terminais rule was MSC’s East Coast South America to US East Coast service (SAEC).
