ABTP Brazil Renews Complaints that Maersk and MSC Dominate the Market

The Port Association filed a regulatory complaint ahead of the pending terminal privatization at Santos Port

Privatization of Brazilian ports
Maersk and MSC jointly operate a terminal in Santos while looking to expand their operations at the port (APM)

Published 9 Nov 2022 16:58 by

Maritime Executive

Brazilian companies have been working to block Maersk and MSC’s efforts to expand their terminal and logistics operations including further acquisitions in Brazil. In the latest move, the Association of Brazilian Port Terminals (ABTP) filed a request 10 days ago with regulators calling for an investigation into the business practices of two container shipping giants.

“We decided to request an investigation to MSC and Maersk on the suspicion that they are abusing their dominance in maritime container transport in favor of their own container terminals along the coast, raising costs and reducing options for cargo flow in Brazil,” ABTP president Jesualdo Conceição da Silva told BNamericas. The trade association, which says it represents 72 companies that operate more than 233 terminals in Brazil, accused Maersk and MSC of “anti-competitive practices” saying they favor terminals they operate for container volumes that cause costs for shippers to bypass cheaper competitors. . .

Maersk and MSC have repeatedly denied allegations that say the majority of container volumes are handled by independent carriers. Both companies answer that they have limited space and need to expand the operation of the terminal to keep up the flow of goods.

The trade association sought to focus on its legal request to investigate the impact of the business practices of two container shipping companies on the country’s economy. The request was submitted to the Administrative Economic Defense Council (CADE), a government agency that oversees and regulates competition and trade in Brazil.

In 2021, the trade association stated that Maersk and MSC combined were responsible for more than half of all container movements on the Brazilian coast. Further, through commercial agreements, they contend that the two companies control as much as three-quarters of all container movements in and out of Brazilian ports. Through their two terminal companies, Maersk and MSC currently operate seven of the 19 primary terminals in Brazil. Maersk also recently acquired the rights to terminal eight, located in the Port of Suape, as part of the privatization of Brazil’s port operations.

The allegations by ABTP are not new as the association has made them the same claim as before in its attempt to block Maersk and MSC from the privatization bid at the port of Santos. The government in the spring issued the conditions for the privatization of the STS10 terminal in Santos stating that the process will continue at the end of 2022. The APM terminal has been operating for almost a decade in Santos and the current joint venture with TIL operates the MSC Terminal Brasil Portuário located on the right bank of the Port of Santos. The current terminal can accommodate 1.5 million TEUs.

Trade organizations have previously tried to block or limit the participation of Maersk and MSC in the upcoming privatization. However, Cade ruled a few months ago that the vertical integration of ship owners and port terminals does not harm competition. ABPT threatened in July to take the matter to court.

Brazil’s recent elections could also complicate the issue. The administration of Brazilian President Jair Bolsonaro has moved forward aggressively with privatization in an effort to raise much-needed cash. Bolsonaro lost a re-election bid 10 days ago to former president Luiz Inácio Lula da Silva who is scheduled to start a third term on January 1, 2023. It is uncertain if the outgoing administration may try to advance privatization efforts before leaving office. and how the new administration will handle sales after taking office.

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