The competitive infrastructure of the Port of Santos will boost Brazil’s foreign trade, says Maersk president

Julian Thomas, the president of Maersk in Brazil, has called for increased investments to develop the infrastructure of Brazilian ports, particularly the Port of Santos (SP), which is being privatized in a project coordinated by the National Bank for Economic and Social Development (BNDES) and commissioned by the Ministry of Infrastructure.

“We support the modernization and expansion of investments in the Port of Santos, which will ensure a competitive infrastructure for the growth of Brazilian foreign trade,” he says.

In this scenario, Julian Thomas defends the expansion of the port’s draft to seventeen meters in the first phase of the concession period. “This is the most critical investment to maximize the potential of the largest port complex in the country,” he analyzes.

According to public consultation data on the privatization of the Port of Santos, anticipating the deepening of the channel to 17 meters as early as 2026 would result in R$ 45 million in savings. Simultaneously, doing so would also add maintenance dredging costs of around R$ 40 million per year between 2026 and 2033. However, the advantages of economies of scale and the possibility of expanding export and import markets created by a deeper port outweigh the additional cost of maintenance dredging.

“Direct expansion will make the port more competitive. So dividing it into two phases would not be as efficient,” Thomas points out. He also argues that increasing the channel depth to 17 meters will allow larger vessels to access the port, including those with 5,000 TEUs, significantly larger than those 9,000 TEU vessels that call at the Port of Santos. Considering current market dynamics, anticipating the deepening of the channel to 17 meters would allow for the additional transport of 1700 to 2300 TEUs per stopover in 2026.

“Almost every container ship that comes to Brazil calls at the Port of Santos. However, suppose the port has a limitation that prevents the most efficient vessels from operating in the country. In that case, it causes a ripple effect in other ports, as well as in the development of the Brazilian economy,” explains Thomas.

See below the major Port of Santos’ export and import trends from January 2020 to January 2022 measured in TEUs. The data is from Dataliner.

Exports and Imports from the Port of Santos | Jan 2022 – Jan 2022 | TEU

Source: Dataliner (click here to request a demo)

Construction and accommodation of new vessels

With the increase in maritime transportation demand that began in 2020 during the height of the coronavirus pandemic, the global market for new vessel construction increased. Thomas points out that the new ships, which should enter service in 2023, have a capacity of 22,000 TEUs.

“The year 2021 saw a significant increase in container ship orders. As a result, new vessels will provide more capacity to the global transportation landscape. Furthermore, it is expected that trans-Pacific capacity will be reallocated to Latin American trade. As a result, having a draft of 17 meters in the Port of Santos is critical to allowing these new ships to dock,” explains him.

Sustainable Industry

Finally, the president of Maersk believes that the issue of deepening the Port of Santos channel is about more than just economics. The president emphasizes that the logistics industry’s sustainability is also a factor to consider, given that the industry is working to reduce greenhouse gas emissions.

“Bigger ships produce less CO₂ emissions per container transported. If Santos offered a depth of 17 meters, new orders for ships to service South America’s east coast would be required, as would replacements for cascading ships displaced from more mature routes. These new ships may be powered by green methanol following global trends, resulting in an even more relevant environmental economy. It is a possibility”, he evaluates.

Source: Grupo Segs

To read the full original article, please go to:

https://www.segs.com.br/demais/338599-porto-de-santos-infraestrutura-competitiva-ira-impulsionar-comercio-exterior-brasileiro-afirma-presidente-da-maersk

Sharing is caring!