CADE blocks two port operators at Itajaí from levying terminal handling charge

At the judgment session on February 3, CADE (the administrative council for economic defense) imposed a preventive measure against 2 companies that operate the Itajaí Port Complex in Santa Catarina: Portonave Terminais Portuários de Navegantes and APM Terminais Itajaí. As a result of this decision, operators are prevented from charging Terminal Handling Charge 2 (THC2) fees, also called the Segregation and Delivery Service (“SSE”) – an additional fee to the basic tariff – or any other amounts by way of segregation and delivery of containers to independent bonded premises, until the merits of the cases are judged.

By a majority, the council granted two voluntary appeals filed by Localfrio Armazéns Gerais Frigoríficos, a customs storage service provider in the Itajaí Port Complex. The decision was made in cases that determine the collection of THC2 or SSE by port operators for the handling of containers with cargo originating from imports on the ground.

“The investigated conduct has a high harmful potential, and may hinder the performance of independent bonded warehouses in the bonded warehousing market by artificially raising their costs, distorting competition and generating irrecoverable damage to social well-being if there is no intervention by the antitrust authority”, concluded counselor Luiz Hoffmann, rapporteur for one of the resources.

THC2 explained

When importing goods, THC (Terminal Handling Charge) is the basic tariff that the shipowner pays to the port operator. The tariff includes the costs of horizontal handling of containers on land, from the moment the ship is unloaded until delivery to the customs area contracted by the importer.

Usually, port operators, such as Portonave and APM Terminals, also provide storage services, competing in this market with independent bonded warehouses. THC2, or SSE, consists of the charging by the port operator of another tariff, in addition to the basic tariff, for “container segregation” of the independent customs areas.

Localfrio, however, claims that the charge would be undue since the “container segregation” service would be included in the basic tariff paid by the shipowner, the agent that effectively contracts the services of the port operator.

Furthermore, it states that since Portonave and APM have market power in the Itajaí Port Complex and have a storage area, an increase in the cost imposed on independent bonded premises ends up diverting demand to the operator himself, who does not bear the same cost. Thus, charging THC2 or SSE would make bonded areas a less competitive option for importers.

Administrative procedures

The voluntary appeals judged on Wednesday were filed by Localfrio against a decision by CADE’s General Superintendence (SG/Cade) last October, which denied the request for a preventive measure against Portonave and APM Terminals, within the scope of the proceedings investigating alleged improper charging of the THC2 or SSE fee by port operators.

With the council’s decision, the preventive measure prevails until the investigation conducted by SG / Cade is completed. At the end of the investigation, the Superintendence will issue an opinion on the condemnation or closing of the case, forwarding it for judgment by CADE’s Court, responsible for the final decision.

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