Base text of BR do Mar is approved by the Chamber of Deputies to encourage coastal navigation

On December 15, the Chamber of Deputies approved the base text of BR do Mar, the government’s proposal to encourage navigation on the Brazilian coast. The deputies will now analyze suggestions for changing the text. Presented to Congress by the Ministry of Infrastructure in August 2020, one of BR do Mar’s pillars is its flexibility to charter foreign vessels to be used in cabotage shipping. The proposal intends to make coastal navigation rules more flexible in order to increase the supply of ships, thereby increasing competition and lowering the costs of this type of navigation.

According to the base text, increasing coastal shipping will increase the volume of containers transported per year, going from 1.2 million TEU in 2019 to 2 million TEU in 2022. The initiative will also expand the capacity of the maritime fleet dedicated to cabotage over the next three years by 40%, excluding those vessels operating in oil and oil products.

BR do Mar predicts that after a transitional period, companies will be able to rent bareboat vessels (changing the ship’s foreign flag to Brazilian) without having Brazilian ships. However, this total release scenario will only happen four years after the law’s enactment.

Regarding the rental of ships in time – when the foreign flag is kept, reducing costs -, the proposal foresees more possibilities concerning the current rules. However, to access these new formats, the business will only be able to charter ships that belong to a foreign subsidiary belonging to a Brazilian shipping company. For the government, this gives more security that there will be a fleet available for cabotage in Brazil.

Today, cabotage chartering is quite restricted. The current law defines that one of the requirements is that there are no Brazilian-flagged vessels available of the type and size suitable for the intended transport – this is verified in the so-called “circularization”, a kind of market consultation. Through BR do Mar, in these cases, chartering regulations cannot limit the number of trips to be made.

Source: Jornal do Comércio

To read the full original article, access the link: https://www.jornaldocomercio.com/_conteudo/politica/2021/12/825016-camara-aprova-texto-base-do-br-do-mar-que-incentiva- navigation-na-costa-maritima.html

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