BR do Mar and Its Consequences

São Paulo – The possibility of a truckers’ strike, similar to the one that occurred in 2018 during Michel Temer’s government, happening again in 2021 may contribute to the prioritization of Bill No. 4,199/2020, which establishes the Coastal Shipping Incentive Program, also known as “BR do Mar.” After all, what motivated the drafting of this bill was precisely the need to increase the volume of cargo transportation between national ports to reduce dependence on interstate road transportation, an anomaly that became evident during the 2018 strike.

However, after being submitted by the federal government to Congress in August 2020 and having its basic text approved in the Chamber of Deputies at the end of 2020, following intense pressure from the government to treat it as an urgent matter, the bill is still under consideration in the Senate. This time, after numerous changes due to intense negotiations among senators, representatives of the naval industry, and government sectors, a new report for the bill was approved.

This means that the text will still need to be submitted to new approval in the Chamber, and therefore, the matter is far from reaching a consensus, even though it is clear that, for the logistics system, navigation between national ports is the most suitable, considering the country’s continental dimensions.

For the naval sector, it is essential that the future law ensures rules that reduce costs, generate jobs and competitiveness while avoiding loss of sovereignty, market concentration, or increased external dependence. And, above all, that the naval industry is prepared for the demand that will require a larger fleet, even though the project already foresees relaxation of the rules for chartering foreign-flagged ships. Only in this way will it be possible to achieve the goal of handling 2 million containers per year in Brazilian ports, as the BR do Mar project envisions. Currently, this average is around 1.2 million.

However, recently, a substitute for Bill No. 2,337/2021 (Income Tax Reform) was presented, proposing the repeal of important tax incentives for Brazilian shipping companies (EBN) that benefit from the Brazilian Special Registry (REB). This incentive is granted to the naval industry to ensure the construction and refurbishment of vessels. In other words, without this type of incentive, which establishes compulsory tax relief, the national industry’s competitiveness will be compromised compared to foreign companies in the same sector.

Obviously, expanding the fleet by 40%, as outlined in the government’s plans, will not be enough to achieve that goal in a few years. There needs to be demand, meaning that the national industrial park must increasingly import inputs and export manufactured products, in addition to the movement required by commodities. For this, however, a plan for decentralizing ports will be necessary since, according to a survey by the Foreign Trade Chamber (Camex), over 40% of cargo movement is concentrated in just two ports, Santos-SP and Paranaguá-PR, in the Southeast and South regions.

In other words, for a country with a coastline of 7,367 kilometers, it is clear that the ideal would be to have other ports with significant operational capacity, especially in the North and Northeast regions, reducing dependence on the road transport system. To achieve this, a massive plan would also be needed, which would involve infrastructure works at various national ports, while also investing in expanding the road network because, upon reaching the port, the cargo must be transported by land to the importer. And vice versa.

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Liana Lourenço Martinelli, lawyer, postgraduate in Business Management and International Trade, is the Institutional Relations Manager of the Fiorde Group, comprised of Fiorde International Logistics, FTA Transport and Warehouses, and Barter International Trade. Email: fiorde@fiorde.com.br. Website: www.fiorde.com.br

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