Government Signs Decree Regulating Cabotage in Brazil

With President Lula’s signature on Wednesday (July 16), the decree regulating the BR do Mar program officially came into effect, aiming to boost the use of cabotage for cargo transport between domestic ports. The regulation was developed by the National Secretariat for Waterways and Navigation, under the Ministry of Ports and Airports, and is intended to reduce freight costs and the environmental impact of cargo transport in the country.

Through the program, the government aims to expand the availability of vessels for navigation, establish new routes, reduce logistics costs, and increase employment in the sector. BR do Mar also encourages the development and innovation of Brazil’s shipbuilding industry and introduces sustainability criteria to enable the chartering of foreign vessels.

Ports and Airports Minister Silvio Costa Filho noted that although BR do Mar was introduced in 2022, it is only now, under President Lula’s administration, that it is being implemented and regulated. Today, we have the privilege of signing this decree, which was developed in collaboration with the productive sector and Brazil’s shipbuilding industry, and will have a significant impact on strengthening cabotage in Brazil. The program will allow us to make better use of Brazil’s 8,000-kilometer coastline to expand coastal shipping,” said the minister.

Costa Filho also stated that BR do Mar will grow the sector, create jobs, and strengthen Brazil’s public ports. “It also plays a role in reducing logistics costs in the country by 20% to 60%, further enhancing the port sector. For example, cargo can now be shipped in containers from Suape Port in Pernambuco to Santos Port in São Paulo, lowering costs, contributing to the decarbonization agenda, and supporting sustainability goals.”

Shipping Companies

For Brazilian Shipping Companies (EBNs), the program encourages the training and qualification of domestic seafarers, as well as operations for new types of cargo, routes, and markets, and the more efficient use of funds from the Additional Freight for the Renewal of the Merchant Marine (AFRMM).

One of the provisions in the decree allows EBNs to expand their own fleet’s tonnage by up to 50% through the chartering of foreign vessels. For example, a company with two owned ships could charter one additional vessel of similar capacity. This limit increases to 100% if the chartered vessel is classified as sustainable. If an EBN operates sustainable ships, it may charter up to double the number of conventional boats. In the case of sustainable foreign vessels, up to three ships can be chartered.

According to the National Secretariat for Waterways and Navigation, two basic vessel chartering models are defined by law:

• Bareboat charter: where the EBN leases the vessel without crew and assumes all operational and maintenance costs;
• Time charter: where the shipowner provides the complete vessel, including crew, for a fixed period.

Cabotage

Currently, cabotage accounts for 11% of all cargo transported by sea in Brazil. The National Logistics Plan (PNL) projects a 15% growth over the next 10 years, driven by expected cost reductions. On average, cabotage freight costs 60% less than road transport and 40% less than rail.

BR do Mar

According to studies by the state-owned Infra SA, the regulatory changes are expected to promote competition and could reduce freight costs by up to 15%, resulting in annual savings of up to R$19 billion in logistics. Coastal shipping also cuts greenhouse gas emissions by 80%.

In 2024, Brazil’s cabotage sector moved 213 million tonnes. Approximately 77% of that cargo consisted of oil, primarily transported from offshore platforms to coastal ports. BR do Mar aims to boost container and general cargo transport, which currently account for 11% and 2% of coastal shipping volumes, respectively.

According to Infra SA estimates, a potential 60% increase in containerized cabotage could reduce CO₂ equivalent emissions by over 530,000 tonnes per year compared to road transport.

Source: Agência Gov

Sharing is caring!