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Brazilian ports and navigation remain in operation, reports ANTAQ

In view of the worsening of the coronavirus epidemic in Brazil, the country’s port terminals have reinforced the security measures and containment of the spread of Covid-19, according to guidelines from health authorities and the federal government. However, there is already a concern about possible logistical bottleneck due to the crisis.

The first fear is the very need to dismiss employees. Industry officials and executives have reiterated that there is no forecast for any port terminal shutdown, as occurred in China. The standard measure has been to implement remote work for administrative areas, release employees from risk groups and expand precautionary measures for those who work directly in the port operation.

Agribusiness & Port Logistics

A letter signed by almost 50 entities representing agribusiness segment was addressed on Wednesday, 18, to the President of the Republic, Jair Bolsonaro, and to the Minister of Infrastructure, Tarcísio Gomes de Freitas, requesting support from the federal government to guarantee the functioning of the national port logistics amid the coronavirus crisis.

Public & Private Ports In Operation

The National Waterway Transportation Agency (ANTAQ) announced today, 20, that public (including delegates), private and other port facilities remain in operation, as well as coastal and long-haul transportation activities.

In a note, ANTAQ clarified that only the Union will be able to determine the closure of port facilities in all Brazilian states or the suspension of service provision on interstate and international waterway transportation lines. The legal basis is Article 22, item X, of the Federal Constitution, and Ordinance 125, of March 19th, 2020, of the Presidency of the Republic.

“At the moment, the unrestricted suspension of passenger transport is not a measure indicated by the National Health Surveillance Agency (Anvisa). The complete suspension of this service could harm access to medical care, the displacement of health professionals, the supply of vaccines , supplies and medicines for the Brazilian states,” added ANTAQ in its statement.

Cabotage

The Brazilian Association of Cabotage Shipowners (Abac) reported that the modal remains active. The companies associated with Abac have taken actions to protect their employees and contribute to the prevention of the contagion of Covid-19, following the guidelines of the country’s health authorities. The measures safely guarantee the continuity of cabotage services, always within the principles of preventing and maintaining the supply of products to society.

Santos Port

On Wednesday, operation in Santos Port was threatened due to a possible halt of the stevedores work, who even sent a letter to the authorities announcing their decision to stop working. The situation was, in principle, contained in a meeting between port authority, representatives of companies and unions.

The Santos Port Authority (SPA) published a note stating that maritime and road access are “open without any restrictions” and that it “acts to guarantee the full functioning” of the port. The agency has taken security measures since the beginning of the crisis.

Container terminals DP World, Santos Brasil and Brasil Terminal Portuário (BTP) have reinforced their security measures and dismissed employees, but said there is no impact on activities.

The port operation could also be impacted in other ways, in addition to an employee stoppage itself. One of the concerns, for example, is in relation to the release of the cargo by inspection agencies, such as the Federal Revenue Service, the Ministry of Agriculture or the National Health Surveillance Agency (Anvisa), which need to verify imports.

The fear is that, with the delay, a huge queue will be generated. For now, the operations proceeds normally.

According to the president of Portos do Paraná, Luiz Fernando Garcia da Silva (who manages Paranaguá and Antonina), there is no forecast of an impact on the operation in the State, “unless there are mobility problems, as there was in China”. At the height of the crisis in the Asian country, one of the bottlenecks for cargo transport was the restriction of truck drivers, who interrupted activities.

According to the National Association of Cargo Transport and Logistics, it is too early to say whether there will be an impact on cargo transport, which will depend on the worsening of the epidemic. In March, the assessment is that the movement has been positive, driven by the soybean harvest.

In general, the assessment of executives and analysts about the current scenario is highly uncertain, and the forecasts seem to change every day. The fear – and the main scenario to be avoided panic, that could lead to a complete halt in activities and logistical chaos in the country.

Stevedores Union threatening to stop working in Santos Port

At a meeting held at the headquarters of the Union of Stevadores of Santos, São Vicente, Guarujá and Cubatão (SOPESP), which was attended by all the presidents of the professional unions, a series of measures was decided on the operational continuity of the Port of Santos, last Tuesday (17th).

The Union sent a letter to the National Secretariat of Ports and Waterway Transport expressing the need for a complete halt of operations in the Port of Santos, starting this Wednesday, 18th, due to the worsening of the pandemic generated by the Coronavirus in Brazil.

In the letter, the union president stressed that stevedores are exposed to high risk, since they work on the front lines and are subject to high contamination, because the vessels come from countries facing the pandemic. The Stevedore Union added that most federal, executive, legislative and judicial bodies have stopped their physical operations.

According to the chairman of the management board of the São Paulo State Secretariat for Logistics and Transport, Roberto Giannetti, “stopping the port of Santos would be putting millions of Brazilians at risk, since supply could stop between 60 and 90 days if the strike was declared “.

This means that many industrial inputs and imported basic consumer products could go into shortages, especially of hospital medical supplies essential for the crisis period. It is worth mentioning that the Government has determined that a series of medical products import tax will be lowered to zero and they will have priority treatment in customs clearance procedures.

Santos Port Authority (SPA) highlighted, in a note, that, together with the port community, it acting to guarantee the full functioning of the Port of Santos, respecting the determinations of the Health authorities.

There will be even more negotiations between the stevedores in order to reach a final understanding. Meanwhile, all port activities continue to be carried out normally.

Brazilian Health Agency publishes coronavirus preventative measures

Earlier this month, the National Health Surveillance Agency (Anvisa) released a Technical Norm with measures and actions to be taken against the coronavirus.

The Agency recommended that anyone working at points of entry into the country, such as ports, airports and borders, should wear surgical masks. And if there is any suspicious case, in addition to the mask, apron, goggles and gloves should be used.

Free Pratique

Ships flying foreign flags can only berth at Brazilian ports if they have a Free Pratique Certificate issued by Anvisa. Inspection for the purpose of issuing a Free Pratique Certificate is a procedure adopted a long time ago by Anvisa and follows the rules of the World Health Organisation (WHO).

The Sanitary inspection and Free Pratique is one of the main instruments to curb the international spread of diseases by means of foreign ships.

The Free Pratique Certificate is requested by the ship between 48 hours and 24 hours before the ship arrives at the port, allowing Anvisa to evaluate the ships operational and hygienic-sanitary conditions and the health status of crew members, based on the analysis of the information presented upon request and/or a health inspection carried out on the vessel.

The new Technical Norm states that now any vessel that called at Chinese Ports in the last 30 days, must present a Medical Logbook – which brings all records of health events on board – when requesting the issuance of a Free Certificate Pratique.

In case of suspicion that any crew member has symptoms of CORONAVIRUS, the Free Pratique will only be issued, after the agency and the epidemiological surveillance carry out inspection on the vessel and on the patient.

In the meantime, the ship is not authorised to operate and passengers or crew cannot disembark. The crew member suspected of having CORONAVIRUS should be kept in a private place, preferably in the cabin, untill an evaluation by the health authority is carried out, as defined in the local Contingency Plan.

After evaluation, it will be defined if the Crew member will be discarded as a suspect, kept on board in quarentine or removed to a hospital to be designated.If the virus is confirmed, the ship may undergo disinfection or quarantine. And if the suspicion is not confirmed, the Free Pratique will be issue.

The Maritime Health Declaration (DMS) must be filled out correctly and in a complete form for evaluation regarding the issue of Free Pratique.

As defined by the Ministry of Health, China is the country considered an area affected by 2019-nCov and, when filling out the DMS, it must be so noted.

Anvisa also recommended the use of personal protective equipment by pilots, employees of the Federal Revenue Service, the Federal Police, the Agricultural Services Surveillance (SVA) and the Brazilian Navy and other workers who are in direct contact with crew members from China, such as Port Workers, shipg agents, among others.

The Agency announced yesterday on their website that it is adopting an additional measure, verifying the origin of the crew members who recently boarded the ships. In this case, the Agency has also checked the place of embarkation to see if there is a possibility of suspected coronavirus.

Bill 23/20 was presented to the National Congress and approved on an urgent basis, since it defines the rules for confronting the new coronavirus. The text of the law provides for actions such as isolation, quarantine and closing ports, highways and airports for entering and leaving Brazil, in specific cases that endanger the health security of Brazilians.

Therefore, if the situation worsens, the Government now has a legal provision that allows temporary restriction of access to foreign ships and crew in Brazilian Ports.

Lack of dredging impacts liquid bulk operations in Santos Port

The operation of liquid bulk in the Port of Santos, in the brazilian state of São Paulo, has been hampared, following the reduction of the operational draft limit in the berths of Alemoa and Barnabé Island. Piers are interdicted, increasing the waiting/queue of vessels. At least 14 cargo ships cancelled calls at the Santos port and proceeded to other ports.

The lack of constant maintenance dredging, combined with the siltation of the channel, forced the reduction of the operational draft limit in three berths intended for operations of liquid bulk. The contract to perform the sediment removal service on the waterway ended in April, but the Companhia Docas of São Paulo (CODESP), company that runs the port, thought there was no risk of restrictions on incoming ships.

Unfortunely, in Alemoa there was a reduction of 70 centimeters in a bething point. From 10.9 meters to 10.2 meters. On Barnabé Island, the berth in which the draft limit was 10.2 meters, suffered a 1.2 meters reduction. The draft is of only 9 meters now. Also, the docking pier that allowed operations of ships withs drafts of up to 10.4 now only receives vessels with 9.5 meters below the waterline.

The berths of Alemoa and Barnabé Island concentrate the liquid bulk operations at the Port of Santos.

The Union of Maritime Navigation Agencies of the State of São Paulo (Sindamar) expressed concern. The main fear revolves around rising demurrage costs, given the longer waiting times for larger ships to berth.

For the President of the Brazilian Association of Liquid Terminals (ABTL), Carlos Kopittke, the situation is complicated and the solution should take some time. According to him, Alemoa pier 1, used by Transpetro (a subsidiary of Petrobras), is limited and only ships up to 230 meters can operate safely. In this case, the solution may take up to 10 months, as it is necessary to hire a company that specializes in the maintenance of dolphins.

Codesp rules out emergency hiring

Codesp said in a statement that the reduction of the operating draft in some berths was ordered due to the identification of depth loss at these points, attested by bathymetries performed by Codesp.

Regarding the defense of the wharfs 1 and 2 of Alemoa, “the recovery has already been contracted and in mobilization for the immediate start of the services, with 15 days to complete the first and another 15 days to complete the second”.

CODESP also announced that, next year, it should start construction of a new pier on Barnabé Island and, with the public bidding of the STS 08 area, the Port will gain two more berths for liquid bulk.

Regulatory review announced will impact Comex and Shipping

Brazilian Comex and Shipping Players know how difficult is to be in compliance with all the rules imposed as a way of “controlling” the activity.

Recently a decree was issued stablishing a revision of federal rules and regulations. The laws currently in force will be repealed, simplified and republished within 18 months.

The measure is being called, behind the scenes, “Revisaço” and aims to reduce costs with unnecessary burocracy and regulations in between 160-200 billion reais.

The review will update, simplify and consolidate the regulations. The idea is to eliminate outdated rules and simplify the regulatory landscape, ensuring greater legal certainty for entrepreneurs and investors.

On Comex, we currently have importers and exporters who must comply with regulations that are published, almost daily, by each of the various agencies involved in foreign trade.

Players are subject to heavy penalties (fine, cargo forfeitur, closure of the company, among others) if they fail to comply with all accessory obligations.

On the other hand, we have the entire Shipping chain that has the obligation to provide numerous information, since the arrival of the ship, operation, departure, port of origin, port of final destination, being required to feed SISCOMEX Cargo and Port without Paper. They are also subject to various penalties. Among them, the fine of R$ 5,000 that worries maritime agents and, although illegal is one of the great reasons for the “Brazilian Cost”!

It is obvious the importance of the public agencies regulation and that the sectors have some kind of control.

However, the great truth is that players in the industry suffer from the numerous obligations created over the years.

Therefore, the “Revisaço” demonstrates the Government’s concern with the players wishes to reduce bureaucracy and the costs of foreign trade.

The final result of the consolidation is expected to come out in 2021. After the end date, taxpayers will no longer be subjected to fines based on outdated rules.

The process of review and consolidation of the rules can be suggested by any interested party, through the Federal Executive Branch Ombudsman System.

Our team will prepare suggestions for revision of the regulation update, especially with regard to the regulations of Brazilian Federal Customs Office and the accessory obligations that shipping players are required to carry out in SISCARGA and ANTAQ’s regulatory framework for shipping and port sectors.

Thus reaffirming our mission to strive for greater legal certainty in the sector.

Cabotage gains new incentive with cost reduction

The Federal Government reduced the import tax for vessels destined for cabotage operations in Brazil. With this, the expectation is to reduce by 40% the cost to import a specific vessel for this segment. The measure is part of ‘BR do Mar’, a plan that aims to boost maritime cargo transportation along the Brazilian coast.

Today, the import tax rate for vessels is 14%. But with the plans to encourage cabotage, which should be revealed with the disclosure of the BR do Mar, the issue has been analysed by the Foreign Trade Chamber (Camex), which approved the elimination of the tax.

The measure was announced and celebrated by the Minister of Infrastructure, Tarcísio Gomes de Freitas. For him, the Government’s decision is “a huge nod to those who are willing to invest in the sector, create jobs, move the entire production chain and contribute to expand the participation of the cabotage matrix in Brazil’s transport matrix”.

For port consultant Fabrizio Pierdomenico, the measure is also welcome. “This is the first step in making cabotage an important modal. I always say that it competes directly with the road mode. So as long as it is not cheaper, faster, more efficient, more competitive with freight and road documentation, cabotage will be at a disadvantage”.

On the other hand, the consultant points out the risk of the measure having side effects. The idea, according to Pierdomenico, is that the tax exemption lasts from 12 to 24 months.

“The problem is to stop using Brazilian shipyards to manufacture these vessels. But I don’t see how not to do that in the short term”, said the expert. He points out that the measure is valid since, “if the intention is to give a supply shock in lines, it is necessary to have ship”.

Other measures

Pierdomenico believes that BR do Mar has to resolve other issues to boost cabotage. One of them is the issue of bunker oil, the fuel of navigation, considered one of the obstacles to the development of the modal. “The bunker represents a huge cost. There has to be different treatment for cabotage”, he said.

The BR do Mar may be published through a bill or a Provisional Measure (MP).The idea is that ships carrying cargo through cabotage will have a differentiated treatment, which can guarantee a reduction in bureaucracy and agility compared to long-haul shipping, which will not have a revision of standards and regulation.