Ocean carrier consolidation hits smaller terminals in Brazil

Ocean carrier consolidation hits smaller terminals in Brazil

Unprecedented consolidation of ocean carriers and the restructuring of global vessel-sharing alliances from four to three is wreaking havoc on several smaller Brazilian container terminals.

This is especially the case in Santos, which handles nearly 30 percent of Brazil’s total waterborne cargo and almost 40 percent of its containerized shipments. Smaller terminal operators at Santos, whose overall box volumes fell to 3.56 million twenty-foot-equivalent units (TEUs) in 2016 from 3.70 million a year earlier, have lost significant market share since two new terminals  — Embraport and Brasil Terminal Portuario (BTP) — opened in August 2013, and as larger, but fewer joint ventures have pooled their resources at larger, newer box terminals.

Rodrimar, Santos’s smallest container facility, has given up on handling containers, and the second smallest, Ecoporto Santos (the former Tecondi), has switched to breakbulk plus warehousing and less-than-containerload cargoes for now, although it’s still looking to attract new services with smaller vessels.

Libra Terminais’s T-35 and T-37, meanwhile, nearly went out of business until CMA CGM stepped in last month with new deep-sea services — the joint east coast of South America service to Asia with Evergreen, Cosco Shipping, and Yang Ming, and a separate service with South America to West Africa. The French carrier also has promised to invest in Libra through its Terminal Link subsidiary, according to sources close to Libra.

Sources also say Libra has reduced its container rates to under 300 reias ($95.48) per move, a 50 percent reduction since the BTP and Embraport terminals opened four years ago. Rates have averaged between 350 and 400 reias over the past year or so, depending on volumes offered by shippers.

Maersk Line and Mediterranean Shipping Co., which make up the 2M Alliance, have been congregating most of their deep-sea services at BTP, where both carriers hold a financial stake, and Hamburg Süd has stuck with Santos Brasil’s Tecon Santos facility.

The big question now for Santos watchers is where Hamburg Süd vessels go after its acquisition by Maersk is completed at the end of this year or in early 2018.

A similar question is being asked in southern Brazil because Maersk’s sister company, APM Terminals, has a container terminal in Itajai, Brazil’s second-largest container port, with more than 1.1 million TEUs in 2016. At the same time, Hamburg Süd has a 30 percent share in Porto Itapoa, a relatively new greenfield site only 70 nautical miles away, but still in the state of Santa Catarina. 

In the south (Santa Catarina and Parana, which includes TCP or Paranagua) and southeast (Santos and Rio de Janeiro) regions of Brazil, shippers have been spoiled for choice over the past three-and-a-half years, and terminal handling rates have fallen as a result — by 30 percent in the former region and 50 percent in the latter — so it’s in their interests that even the smaller, neglected box terminals survive to maintain this competitive environment.

Contact Rob Ward at rcward788@btinternet.com.