In Between Storms and Strikes: Port of Santos Strives to Minimize Ship Delays

Time is money, when it comes to ports. The longer the wait for cargo loading or unloading, the more expensive storage becomes (also known as demurrage and detention). Nevertheless, a series of factors have been causing ship delays at the Port of Santos. The causes range from weather issues to unfitting access infrastructure. More recently, a strike led by tax auditors halted customs clearance for three weeks and further exacerbated the crisis.

The intensity of ship delays at the Port of Santos was brought into evidence in a logistics study by the Brazilian Coffee Exporters Council (Cecafé). According to the organization, 85% of the operations with coffee containers experienced some kind of delay in January this year, a 12-month high.

According to Eduardo Heron, the technical director of Cecafé, these delays result in exporters paying high expenses, due to additional storage time. He also noted other issues, such as the lack of accuracy in the Estimated Time of Arrival (ETA) provided by shipowners.

“Companies plan their logistical processes based on the ETA indicated by shipowners. When a ship delays, terminals are unable to accept its cargo because yards are already full,” says Heron.

Heron believes that regulatory advances are crucial to prevent undue charges to exporters, but the main issue still revolves around port infrastructure. “Terminals are almost full. One cannot overlook the importance of logistics of cargo entry and exit, which should be faster at the Port of Santos. Today, there is a very high cost due to port inefficiency.”

See below container exports and imports between Jan 2019 and Dec 2023. The data is from DataLiner.

Port of Santos | Exports & Imports | Jan 2019 – Dec 2023

Source: DataLiner (click here to request a demo)

Whose fault is that?

Osvaldo Agripino, a lawyer specializing in Maritime, Port, and Regulatory Law, explains that despite there being a regulation on the collection of detention fees, exporters often challenge these payments. He provides an example.

“An exporter loaded the containers within the timeframe provided by the shipowner, and the ship was delayed at the port. This resulted in a detention fee (paid to the shipowner) of R$222,000 for 82 containers and a fine of R$2.2 million. We appealed to the National Waterway Transportation Agency (Antaq) and obtained an injunction suspending the charges and fines, which are still under review by the agency,” he explains.

The specialist explains that there is a rule stating that additional storage cannot be charged when the delay is not caused by the user.

More Problems

Patricio Junior, the Director of Terminal Investments at Terminal Investment Limited (TiL) and President of the Board of Directors of Brasil Terminal Portuário (BTP) and Portonave, condemned the insufficient number of berths to meet current demand.

“Due to the lack of berths, the Port of Santos has reduced its capacity to serve ships. The numbers for terminal yard occupancy, berth utilization, ship waiting at the dock entrance, and overall prices across the logistics chain are increasing.”

Patricio Junior mentions that even though the volume of TEUs handled increases year by year, there have been no new berths since the construction of BTP and DP World in Santos.

“Moreover, the Libra terminal no longer exists. Instead, grain operations took its place. BTP and Santos Brasil have three berths each, DP World has two or three, and Libra had an additional two or four, which no longer exist.”

The executive outlines three premises for solving this logistical bottleneck. “It is necessary to invest in planning, access, and industrialization.”

Patricio Junior also emphasizes that the STS10 (a planned area of 601,102 m2 in Saboó) would increase the number of berths available in the Santos terminal. “Four years ago, I met with Tarcísio de Freitas (current governor), who was Minister of Infrastructure at the time, and showed him how BTP would look alongside STS10. And I warned: Santos is growing, and berths will be in short supply. But nothing happened.”

APS Denies Queues

The Santos Port Authority (APS) stated in a note that ship berthings at the Port of Santos are operating normally. “Changes in vessel schedules are natural and do not imply delays, as they result from various factors: convenience for maritime and port operators, weather, documentary clearance, among other less common situations.”

According to APS, there were 5,452 berthings in 2023, with an average of 15 to 16 per day, or approximately 460 per month. “Only weather interferes with navigation, but when operability is not affected, there are no delays in ship departures.”

Regarding the expansion of berth availability, the port manager claimed that “private operators handle cargo” and that it is only responsible for “the public infrastructure” of the complex.

Cargo Throughput

APS also called attention to the fact that a 5.7 million TEU throughput was posted in 2022 and, since then, container terminals have been investing in increasing their operating capacity. “At the end of 2022, Santos Brasil approved the expansion of its dock by over 220 meters, with plans to increase terminal capacity to 2.4 million TEUs per year. In 2023, DP World extended its dock by 200 meters, increasing capacity by 200,000 TEUs per year. Thus, APS projects that by 2030, the port will perfectly meet the expected cargo inflow and growth.”

Finally, APS stated that container throughput capacity would increase if a “ten-year dispute would come to an end,” referring to the transfer of the Marimex terminal from Outeirinhos to the former Teval area at the entrance of Santos. The relocation is due to the installation of a rail yard that will aid grain operations.

According to APS, “this hinterland terminal will be close to BTP’s container terminal, which had its lease extended for another 20 years after the current term expires (until 2047). With the extension, there are plans for area densification and mandatory investments to increase handling capacity.”

Source: A Tribuna

Click here to read the original text: https://www.atribuna.com.br/noticias/portomar/problemas-como-greve-e-condicoes-climaticas-atrasam-navios-e-geram-prejuizos-no-porto-de-santos

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