Understand the benefits and what can change with BR do Mar

Launched in 2020 by the Federal Government, the bill that earned the nickname BR do Mar (Sea Road) intends to create maritime routes and encourage cabotage on the Brazilian coast. With this, the idea is to reduce costs for companies operating in the segment and make this means of transport more attractive to the consumer.

According to a statement by the Minister of Infrastructure, Tarcísio Freitas, the expectation is for an increase of the fleet by up to 40%, over a period of three years. The statement was given in a video released by the Planalto and echoed in a report by Agência Brasil.

In this article, we talked to five personalities from the maritime segment, who give their opinions about the BR do Mar project. Read to the end to find out more!

How did the development of transportation take place in Brazil?

Brazil is a country known for road transport, both in transporting people and delivering goods. Due to its continental dimensions, however, this is not always the most efficient way of working with logistics.

The high cost of fuel and, especially, of maintaining the roads, is one of the most critical factors. It is considered greater than the investment required for air and water transport.

The development of road transport grew from the 1950s, to the detriment of rail transport, which had dominated the country until then. Due to the Brazilian coast, which provides excellent conditions for waterway transport, it is surprising that this means is not further explored.

What is BR do Mar?

With this in mind, bill 4,199 was conceived, proposed by the Federal Government in August 2020. Called “BR do Mar”, the bill seeks to strengthen and encourage maritime transport by cabotage (navigation over short distances, between ports in the same country).

According to a report by Agência Brasil, the bill intends to create maritime routes and reduce costs on those that already exist. The expectation is that, if the bill — presented as a matter of urgency — is approved by the National Congress, in the next three years, there will be a 40% increase in the fleet.

The government’s intention is to reduce fees, regulations and bureaucratic procedures for cabotage. The project also includes the modernization of ports in Brazil, an initiative that has been happening in recent years.

It is important to note that BR do Mar is not a Congress project, but a Federal Government project. It depends on approval by the Chamber of Deputies and the Senate to become law.

What are the benefits of BR do Mar?

One of the advantages is the reduction in cabotage costs and, with it, the greater attraction of those interested in using this means of transport. “The BR do Mar project set a goal to transport 2 million TEU – Twenty Equivalent Unit – in 2022 in cabotage. In 2019, we transported 1.2 million, maintaining an average annual growth of 12%”, highlights Luis Fernando Resano, CEO of the Brazilian Association of Cabotage Shipowners (ABAC).

“The bill’s goal is quite ambitious, considering that our economy grows much less than that. Therefore, growth will only be possible with the migration of cargo to the maritime modal”, adds the executive.

For the president of the Brazilian Society of Naval Engineering (Sobena), Luis de Mattos, BR do Mar addresses important points, such as the use of the national crew, although more details are needed. “Even though this is the normal procedure, it can generate insecurity in future developments”, ponders the manager.

“BR do Mar has a greater focus on operations. It is a fact that Brazil has a large industrial park spread across the country, which includes not only shipyards, but also, the entire chain of ship parts and service companies, in addition to six public universities of naval engineering. If there is no industrial policy for the sector, all this investment will be unused,” adds Mattos.

Positive initiative

Gustavo Machado, president of the Union of Brazilian Shipowners (Syndarma), believes that, from a business point of view, BR do Mar does not bring benefits or losses for maritime support navigation. However, under the regulatory point of view, the manager defends the initiative.

“We support the concept of the BR do Mar project to bring about a change in the regulatory environment for cabotage and enable its growth in Brazil”, he observes.

For Sergio Bacci, executive vice president of the National Association of Naval and Offshore Construction and Repair Industry (Sinaval), the project also includes proposals for improvements — according to him, forwarded by the union to the government — to improve bill. Among them, changes in the legislation regarding the Merchant Marine Fund (FMM) and greater incentives for job creation in the country.

As positive points, Bacci points especially to article 21 of the bill, which establishes the Brazilian navigation investment company, since currently some companies just want to invest. “If an investment company can only invest, this is a positive point, since it is possible not to operate”, he argues.

Concerns

Jovelino Pires, coordinator of the Logistics Chamber of the Brazilian Foreign Trade Association (AEB), says that he has been following the matter carefully. Although it proves to be favorable, it also presents some considerations.

“On the one hand, there is the Government’s concern to encourage the strengthening of the fleet operating in the country — such as minimizing the cost of transportation by making more transit options operational. Why don’t we make ships here? A long time ago, Brazil was one of the largest ship producers”, he questions.

The coordinator points out, however, the need to improve cargo handling by land in the country, with the implementation of efficient railways and safe highways. Still, the manager says that AEB is willing to help in whatever way possible to make BR do Mar a successful project.

How will the expansion of the supply of maritime transport services work?

To effectively expand the offer of maritime transport services, more specifically cabotage, the bill works based on four axes:

• fleet — greater incentive to companies that already operate in the sector, with more autonomy and less regulations regarding vessel registration and traffic;
• naval industry — encouraging the docking of foreign vessels in the country, expanding knowledge related to the maintenance of parts and equipment for ships, as well as their commercialization (which should also increase the scaling capacity in the national industry);
• costs — accelerated reduction of fees and regulations;
• ports — greater agility in putting into operation the terminals dedicated to cabotage, in addition to the continuity of the modernization process of national ports.

The project for the creation of BR do Mar is a subject of interest for both the shipping agency and for those who operate in the market through support vessels. Therefore, it is a topic that we will continue to follow very carefully on the Wilson Sons blog — always consulting market experts, of course.

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