Brazil Loses Billions Due to Congested Ports and Outdated Ships

Brazil is losing out on billions of dollars every year due to a chronic issue: its ports are saturated and unable to meet demand due to infrastructure shortcomings—such as limited cargo terminals and shallow channels—which prevent the docking of the world’s largest ships and force the country to rely on vessels that are five generations behind.

The Situation

Brazilian ports primarily handle three types of cargo: solid bulk (such as minerals and agricultural products), liquid bulk (including oil and derivatives), and containers (used to transport electronics, machinery, vehicles, and clothing). While all sectors face challenges, the container segment is on the verge of collapse.

Brazilian ships lag five generations behind. Their capacity is measured in TEUs (Twenty-foot Equivalent Units—each equivalent to 20 feet or 6.1 meters and 16 tonnes). Brazil’s port channels are too shallow to accommodate the world’s largest ships (24,000 TEUs). In Brazil, the largest ships carry between 10,500 and 13,000 TEUs, according to the National Center for Transatlantic Navigation (CentroNave). Only last year did a 366-meter-long vessel with 14,400 TEUs dock in the country.

No Brazilian port can fully accommodate a 366-meter vessel. Of the 17 ports that handle containers, only six can accept it—and only with reduced loads, as none of them have the 16-meter minimum draft required for maximum capacity operations.

A ship carrying 11,500 TEUs must offload 18,000 tonnes when docking at a port with a 14.5-meter draft. At the Port of Santos, this results in a yearly shortfall of 1 million tonnes.

Ports Operating at the Limit

Beyond the use of smaller ships, port capacity is at its maximum. Demand is expected to exceed operational capacity by 2028, when national demand is projected to hit 15.2 million TEUs—just above the forecasted 15.1 million TEUs capacity, according to CentroNave.

A crisis is expected to begin in 2037 when demand surpasses installed capacity. By 2047, demand could reach 42 million TEUs, nearly double the projected 23.9 million TEU capacity.

The Port of Santos—the country’s most important—exceeded its operational capacity during the pandemic. By next year, demand there will also surpass installed capacity (5.5 million TEUs).

“There’s a mismatch between the growing demand for efficient logistics and the ability of Brazil’s port infrastructure to respond,” says Vinicius Marinelli, President of the Federal Engineering Council (CFE). “This puts us at a competitive disadvantage.”

Delays and Cancellations

Overcrowding impacts the availability of docking berths. Utilization at nine of Brazil’s 13 main cargo terminals exceeds the OECD’s recommended limit of 65%.

“In 2024, ships took an average of 50 hours to enter the Santos channel and dock. It’s a tragedy—we’re already in collapse,” says Souza from CentroNave.

To address this, the Lula administration aims to double container terminal capacity in Santos. A key step is the auction of Terminal STS-10, scheduled for November. The concession would enable construction across a 621.9 m² area and 1.3 km of quay.

“We’ll do dredging, grant a dredging concession, and invest R$5 billion over 30 years,” said Ports and Airports Minister Silvio Costa Filho in May. ANTAQ (Brazil’s waterway regulator) stated the move would increase TEU capacity by 50%.

Between 2013 and 2022, Brazil conducted 41 port auctions, attracting R$6 billion in investments.

“In our four-year term, we aim for the equivalent of 60 auctions, with investments exceeding R$30 billion,” the minister said. ANTAQ plans to sign 20 new leases in 2025 and 17 more in 2026.

ANTAQ is also supporting channel concessions for the ports of Paranaguá and Santos, allowing for deeper channels and larger ships. The agency monitors dredging contracts and channel depth maintenance.

Projects to expand terminal capacity are underway, aiming to match rising cargo volumes.

Agricultural Terminals Also Saturated

Grain terminals are also at critical levels. In 2024, they were operating at 91% capacity—above the safe limit of 85%, according to consultancy Macroinfra. By 2028, export demand (238.9 million tonnes) is expected to surpass installed capacity (234 million tonnes).

Relief may come in Santos, where Chinese firm Cofco acquired the STS-11 terminal in 2022 to boost grain capacity from 4.5 to 14 million tonnes per year.

With terminals packed, wait times are long. In Santos, the average agricultural loading time increased from 10.5 days (February 2024) to 17.5 days (February 2025). In Paranaguá, it rose from 8.6 to 12.5 days.

“Wait times cost money,” says Marcus Quintella, director of FGV Transportes, noting another critical issue: Brazil’s over-reliance on road freight. The National Supply Company (Conab) states that agriculture loses 10% of the harvest between the farm and the ports, resulting in a total of R$56 billion in losses in 2022 alone.

Trucks carry 54% of output—up from 45% in 2010.

“That’s serious,” Quintella says. “Only 14% of Brazil’s roads are paved, and 67% are rated poor or very poor. It’s chaotic. All of this results in logistics costs that can reach up to 15% of GDP.”

In 2024, the federal government finally matched infrastructure investment levels seen in top global economies, spending R$24 billion (2% of GDP)—on par with the U.S. and China. In 2022, that figure was only R$8 billion (0.6% of GDP).

Lack of Rail and Waterways for Mining Exports

Mineral exports face bottlenecks due to the lack of railways and navigable waterways, which are key modes for this type of commodity.

“Brazil has 30,000 km of railway tracks, but only 10,000 km are operational,” says an FGV Transportes professor. “And our waterways are vastly underused.”

Railway projects underway include:

• Ferrogrão: Aims to replace trucks on BR-163, linking Sinop (MT) to Miritituba (PA), from where the cargo would ship to Asia, Africa, and Europe.
• North-South Railway: Operational, it connects the main rail networks across Brazil’s five regions, linking producers to major ports.
• Fiol (West-East Integration Railway): Expected by 2026, will connect Ilhéus (BA) to Figueirópolis (TO), linking to the North-South Railway and enabling access to the Central-West via Fico.
• Fico (Central-West Integration Railway): Will connect to Fiol and North-South, allowing grain exports to Maranhão (via Carajás Railway) and Santos (via Rumo network). As of early 2025, 32% of the Fico project was complete.
• Ferronorte (Rumo): Connects the Central-West to Santos and integrates with the North and Northeast via the North-South Railway. New segments are under construction and in the planning stages.

The Lula government says it’s investing R$4 billion in waterway logistics, focusing on the controversial Paraguay River waterway, which cuts through the Pantanal. In December 2024, the government approved the purchase of 400 barges and 15 tugboats to boost iron ore and manganese shipments by 6 million tonnes.

Brazil currently uses 12,000 km of its 42,000 km of navigable rivers.

“A project like this strengthens the waterway agenda,” said Minister Silvio Costa Filho in November.

But delays remain a concern.

“New railways take too long to complete,” says Quintella. “The North-South took 40 years. Fico and Fiol are far from finished. If we can’t maintain roads, how will we build rail?”

China Builds Super Port in Peru

While Brazil struggles, China is investing heavily in Peru. Backed by 60% Chinese funding, the first phase of Chancay Port was completed in just four years. It’s set to become South America’s most important port.

With an 18-meter draft, Chancay will be able to receive the world’s largest ships by the end of 2025. It’s equipped with Chinese AI systems and 5G-connected autonomous vehicles.

China wants Brazil to use Chancay and is exploring funding a “bi-oceanic railway” that would link Rio de Janeiro to the Peruvian coast. If completed, it would cut shipping time from Brazil to Asia from 60 to 23 days.

Brazilian officials discussed the proposal in May.

“All cargo from central Brazil could flow through this rail line to Chancay,” said National Railway Transport Secretary Leonardo Ribeiro.

“With modern infrastructure and logistical efficiency, Chancay could become a serious alternative for Asia-bound routes—especially if Brazil fails to keep up with global market demands,” says CFE’s Vinicius Marinelli.

Source: UOL

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