This is how Brazil began its connections with the world, the links of global scope that carry out the movement, transshipment, and cargo storage to supply, not only Brazilian, but global needs. In the year of 2023, we are seeing record-breaking annual cargo movements along the Brazilian ports, but what ports are we talking about? We’ll find out more about them in the text below!

What are the major ports in Brazil?

Brazil has around 175 cargo port facilities throughout the extensive national territory, which includes river and lake structures, such as terminals, ports and waterway facilities. Out of all these installations, 76 are located off the coastline, 52 of them are in the north, 6 in the mid-west and 18 of them are in the southern region of Brazil.

The seven largest Brazilian ports are presented below, although they’re not necessarily the ones that handle the most cargo movement:

1. Port of Santos, in São Paulo: located on the Atlantic coast, it is the largest port in Brazil. It accounts for more than 70% of the national cargo volume;
2. Paranaguá Port: located in Paraná, it is Brazil’s second largest port;
3. Port of Itajaí: located on the coast of Santa Catarina, it is the third largest port in Brazil;
4. Port of Rio Grande: Located in Rio Grande do Sul, it is considered the fourth largest port in Brazil;
5. Port of Suape: located on the coast of Pernambuco, it is the fifth largest port in Brazil;
6. Port of Vitória, in the State of Espírito Santo: it is the sixth largest port in Brazil;
7. Port of Manaus, in Manaus: located in the State of the Amazonas region, it is the seventh largest port in Brazil.

The major ports in Brazil and their main figures  

The models of ports currently represented in Brazil are formed by six different systems: 

1. Organized Ports: These are ports managed by public agents and belong to the Federal Government. They go through a bidding process, when facilities are leased to be operated by private port operators;
2. Private Terminal of Exclusive Use (TUP-E in Portuguese): They are private terminals built only to handle the terminal owner’s cargo. They get permission by a formalized adhesion contract, without any bidding or fees payments; 
3. Private Terminals of Mixed Use (TUP-M in Portuguese): They are also private terminals built to handle the terminal owner’s cargo, with third parties’ cargos subsidiary, by means of authorization according to the current legislation; 
4. Small Public Port Facilities (IP4 in Portuguese): These are facilities used to berth regional vessels that transport people and goods; 
5. Cargo Transshipments Stations (ETC in Portuguese): According to ANTAQ Resolution 2520, it is a “port facility located outside the organized port area, exclusively used for cargo transshipments operations destined to or coming from inland navigation“;
6. Private Tourism Terminals (IPTur in Portuguese): These are terminals for the disembarking and transit of crew members, luggage, passengers, and also for the supply of tourism-oriented vessels. Such terminals can only function by means of authorization. 

As you can see, each one of models above has its specific characteristics and forms of operation throughout the Brazilian market. 

The main Brazilian ports in terms of cargo volume 

When observing the cargo volume movement, the Port of Santos is first in relation to imports and exports.  In 2022, the port of Santos set a historical record of cargo movement, being 10.5% above 2021. Furthermore, in terms of containers’ volume, it reached 5 million TEU (1 TEU = 1 20-foot container) in 2022. Since its maximum capacity is 5.3 million TEUs per year, it was pretty close to reach its full capacity. Regarding the flow of ships, over the last 12 months, it totaled 5202 attractions, so it also increased up to 7.1% compared to 2021.

Let’s get to other figures, then!

Export

In exports, as mentioned above, the Port of Santos is first, as in 2022 more than US$96 billion dollars and more than 109 billion net kilograms were handled. 

The Port of Itaguaí, in Rio de Janeiro, took the second place, and third is the Port of Paranaguá, in Paraná. The Port of Rio Grande, appears in seventh place among the main ports with cargo movements in the year of 2022.

Imports 

About imports, we do not observe a very different scenario, with Santos being first, after handling more than US$77 billion in 2022. Paranaguá rises to second place, since it handled US$22 billion, followed by the port of Itajaí, in Santa Catarina, with a considerable movement for 2022.

The Port of Rio Grande appears only in tenth place concerning the imports category, although it still has a significant participation for the state of Rio Grande do Sul. 

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According to data from 2020, which was a record year, the imported FOB value exceeded the USD 427 million mark, and the trend is that this trade flow will consolidate itself as one of the best business opportunities for Brazilian importers.

If you are thinking about entering this growing market and starting your imports on your own, today’s article was made for you to be aware of everything necessary in order to run your operation in the best possible way.

What kind of registration is required from your company? 

Brazilian Radar SISCOMEX

If your company still does not import or does so sporadically, an initial point of attention is the necessary qualifications to carry out foreign trade operations in Brazil.

The Radar Registration is necessary for your company to be authorized to access the Portal Único do Comércio Exterior – Siscomex.

Siscomex is the Brazilian government platform where all imports carried out in Brazil are duly registered and analyzed by the Brazilian Federal Revenue Service (“RFB”).

It is important to highlight the stage in which some importers sometimes suffer great losses, that is the modality request in which your company will be enrolled.

Each type of Radar Registration defines the value that a company can import every six months, limit that can vary between U$ 50 thousand imported per semester, U$ 150 thousand imported per semester or in the unlimited modality that has no restrictions.

So, before submitting your license application to the RFB (better if you have a Foreign Trade advisor for that), make an estimate of the amount you expect to import.

SIPEAGRO and SIVIGI Brazilian systems

As it is a product destined for human consumption, wine import procedures are scrutinized by the Brazilian Ministry of Agriculture, Livestock and Supply – MAPA.

Among the necessary records linked to MAPA, the importer shall request from this consenting body the registration of the product via the Integrated System of Agricultural Products and Establishments (SIPEAGRO). In addition, it is necessary to register an import application in the Management Information System for the International Transit of Agricultural Products and Inputs (SIGVIG). 

Wine Supplier (exporter) requirements 

Another highlight when importing is the Brazilian normative instructions about the documents that must be required from the exporter.

In other words, there is a need for the wine supplier to adapt to Brazilian bureaucratic requirements, especially about labels and certificates of origin and analysis. 

Labels 

The legal text that establishes the wine importation requirements is very explicit in detailing the information required both on the main label and on the back label of the packages.

Here’s some of the required information:

• Name of the wine
• Grape type
• Brand
• Ingredients
• Harvest
• Batch
• Preservatives
• Expiry date
• Alcohol content
• The warnings ‘avoid excessive alcohol consumption’ and ‘prohibited for minors under 18’
• Importer’s name and registration

Certificate of Origin (“CO”)

The CO is a certificate issued by the exporter with information proving the origin of the product.

This document can be issued by the agency equivalent to MAPA in the country of origin and must follow the parameters guided by the Brazilian Normative Instructions.

Certificate of Analysis

Among the documents required, the Certificate of Analysis is the one that most generates impasses for wine exporters.

This is due to the rigidity in the regulations regarding such document.

In addition to requiring meticulous analysis of the composition, alcohol, and sugar levels, quality and chemical characteristics, Brazilian legislation requires the laboratory abroad (where the analysis is carried out) to be duly registered upon MAPA.

Only upon that registration the laboratory will be entitled to issue the Certificate of Analysis according to the Brazilian rules and regulations on the matter. 

Standard import procedures 

So far, we have assessed many of the particularities related to the importation of wines, strictly.

However, in addition to the specific details, there is also all the ordinary details that any import requires, such as taxes, documentation, and contracting.

Taxes involved

The import of wines is no different from other products with regard to the tax burden involved.

Below is the list of taxes levied on wine imports:

• Import Tax (“II”)
• Tax on Industrialized Products (“IPI”)
• Social Integration Program Contribution (“PIS”)
• Contribution to Social Security Financing (“PASEP”)
• Tax on Operations related to the Circulation of Goods and Provision of Interstate and Intermunicipal Transport and Communication Services (“ICMS”) 

Import operation documents

In addition to the certificates already mentioned above, the documentation involved in the import operation is an important part of the success of the entire customs logistics chain.

Some of the required documents:

• Commercial Invoice
• Packing List
• Import Invoice
• Import Declaration (“DUIMP”)
• Import License – (“LI” or “LPCO” in Brazil)
• Bill of Lading
• Declaration of Custom Duty (“DAT”)

Logistical care

As it becomes clear, the importation of wines requires a significant volume of bureaucratic adjustments to be observed.

These particularities also impact on the logistical movements necessary for the international purchase of cargo.

Some important aspects about the importation of wines concern the international freight hiring, the modal chose, and customs movements in Brazil. 

International freight

International freight is one of the services with the highest added value in the import operation.

Through partners specialized in this type of service, it is possible for your company to have access to the best freight options indicated for this type of product, based on information related to international negotiation.

Two important points of attention in this regard are the contracting of international insurance coverage and the chosen Incoterms® 2020. 

Mode of Transportation

Some aspects are relevant for the decision of which modal of transport to use in the importation.

The location of the exporter and his company is a key point for such decision.

Some of the main Brazilian wine suppliers are in South America, Chile, and Argentina for example.

Normally, imports from these origins are made by road, and customs clearances are carried out at Brazilian borders.

Despite this, the most used modal is the maritime transport with the wines in packages, normally in boxes carrying 12 units, or these same boxes unitized in pallets.

The modal is chosen also based on the volume of imported wine.

The air modal is the least frequent due to the high cost involved and low volume transport capacity. 

Custom movements

Wine imports are commonly inspected by Brazilian Federal Revenue Service agents placed in bonded areas.

Due to such particularity, it is usually indicated that upon arrival of the goods in Brazil, the cargo of wines is transferred to a terminal authorized by the Federal Revenue Service to move the goods and make them available for inspection, such as their respective documentation.

In a practical way, when the goods arrive at the port or airport, to avoid high storage costs in these custom primary zones, the cargo is transferred before formal nationalization.

Which means the goods are transferred to locations authorized by the RFB to carry out the movement of the goods before the due documental and physical analysis, when necessary.

Only after this inspection and subsequent authorization can all customs clearance procedures, tax collection, and transport to the importer’s address take place normally.

It is clear now that importing wines is not for amateurs, right?

The high degree of requirements to be followed makes this type of import demand very specific technical knowledge and high-risk management capacity at each stage.

That’s why it’s important to count on a company used to this type of procedure and that will make sure your entire operation is carried out in the best possible way.

Talk to one of our specialists and we will plan your import together so that you can celebrate the success of your business enjoying a fine wine. 

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As these operations are influenced by structural and legal issues in both countries of origin and destination of the cargo, there are a large number of risks involved and a very high demand for know-how.

In today’s text we will understand together some of the reasons that make freight forwarder/cargo agents the most suitable option when hiring international freight.

What is a freight forwarder?

Before understanding the relevance of this international player, it is important to know who they are and their main characteristics.

According to the definition of the highest body of Brazilian foreign trade regulation – the Brazilian Federal Revenue, a cargo agent is any person who hires and manages the logistics operation on behalf of the importer or exporter.

Far beyond the formal definition, we can understand that freight forwarders are recognized as companies that have expertise in the movement of international cargo, as well as an extensive network of logistics service providers in several countries, and that are able to maintain specific negotiations with the main logistics operators.

A curious fact is that, for the most part, freight forwarders do not have their own fleets of trucks, ships, or aircraft.

They are simply intermediaries that connect importers to the main modal options and conditions for transporting imported volumes, within legal and commercial requirements.

What are the advantages of hiring a freight forwarder?

Now that we know who these freight forwarding companies are, let’s understand why this specialized service can be so relevant.

Relationship

Regular importers in the international market recognize that for the best performance of their operations, a strategic partnership with service providers specialized in this area is necessary.

Cargo agency companies allow importers to have a closer contact with those who will be responsible for moving their products.

This is a very different reality when looking for this same type of proximity with big logistical players such as shipowners and airlines, which are practically intangible.

Through this closer relationship, importers can structure their import demands with greater predictability and always relying on specialist professionals from the logistics partner team at their disposal for eventual changes in plans.

Flexibility

Cargo agents maintain relationships and negotiations with several logistics service providers, which makes them true hubs for transport options.

In this way, unlike shipowners and airlines, cargo agents can adapt each import operation to the needs of each client, respecting, of course, all legislation in force and operational possibilities.

This flexibility provides, in many cases, operations that are much more suited to the internal conditions of the importing company, reducing unnecessary costs and bottlenecks.

Technical knowledge

As we already know, an import operation demands compliance with procedures and the presentation of documents at every stage of the logistics chain.

They are mandatory documents, deadlines, and legal procedures that only those who deeply know all this tangle of aspects can deal with the fluidity and assertiveness that is required.

In this regard, freight forwarders are the providers with the greatest international expertise to meet all the criteria related to international trade.

But that’s not all!

Financial management

In addition to the technical experience that a freight forwarder has, these actors can also be of great help in the financial management of the import operation.

As a rule, the operations carried out are duly charged through billing a few days after the completion of the shipment.

This time gap between the purchase and arrival of the goods gives importers a possibility of planning and cash flow that is of paramount importance for the financial health of the company.

In addition to this aspect, there are many operations in which the importer negotiates to share the responsibility for logistical costs with the exporter of the goods. In these cases, properly oriented cargo agents serve as intermediaries for the execution of the negotiation carried out, pushing away the concern of carrying out international transactions for the payment of fees and services that occur in the country of origin, just to mention one example.

Logistical conditions

One of the biggest difficulties faced by importers is not just the cost of international transport.

Beyond this point, getting spaces on ships and aircraft, on the dates and routes desired by the company, proves to be an arduous task.

This is not a challenge for freight forwarding companies though.

And that’s because of the high volume of cargo handled by these companies, giving them great power of influence and bargaining with logistics operators.

It is important to note that even freight forwarders are subject to global logistical bottlenecks that impact issues such as space and availability of equipment. Despite this, on a daily basis, cargo agents feel less the impact of this problem, unlike importers who try to contract freight directly with shipowners and airlines, for example.

Now, let us ask you a question.

Do you feel the need to promote improvements in the logistics of your imports?

Come talk to our team and find out how we have helped importers to get the best conditions and rates on the market.

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There are specific techniques to help companies achieve better results in international negotiations, such as market research, getting to know your partner better, planning and executing visits, giving gifts, maintaining a good relationship with the negotiator – observing its culture, without being invasive, and creating real ties that can often go beyond the professional barrier and generate a lot of business, even if the point of contact changes company or area of ​​activity.

What is the importance of International Business for Foreign Trade?

Foreign trade is made up of international business, everything that moves the trade balance of a country is linked to this matter. Professionals who relate better to their buyers and sellers deliver more relevant results than those who don’t, as the chance of receiving requests is greater when you have a good relationship.

Benefits of having a good relationship with your customers and suppliers abroad

Getting the customer to close business with your company is the best motivator you need to have and maintain a good relationship with customers and suppliers. Making sure the deals are being closed because of the relationship and not just for the other party’s convenience or for an isolated reason needs to be the fuel to build relationships.

The client being able to see you as an authority figure on some subject will make him seek your advice on any news he has on a particular subject and such position is not built overnight, it needs to be nurtured by each contact, at every opportunity.

How to negotiate with each culture?

Each culture has its own ways of doing business, even if people don’t realize it. An unanswered message, an unanswered call, an explanation given carelessly in any way, can put an end to a whole era of work and to avoid this it is essential to know at least a little about the other.

Time Zone: It is important to pay attention to and respect time zones. Although in some cultures may be normal to work overtime, respecting the limits of the other is always a good option.

Cultural traits: understanding what you do, what you watch, what you eat, whether your favorite sport is football or not, can be decisive details for a closing, as people tend to have more affinity with those who like the same things that we do.

Language: it’s impossible not to mention language because it is fundamental. It does not mean that it is mandatory to speak the other’s language, but the fact you do will certainly be a differential and will put your company ahead of others.

Country history: You don’t need to know all the country’s war heroes and presidents but having an idea of ​​who colonized the country and what disagreements there may be with nearby nations can help you avoid getting into trouble.

Religion: perhaps the most important because everyone’s religion must be respected and not attacked or disdained. Several countries have very intense believers, who take all teachings very seriously and which, at some point, may seem strange to those who are not familiar with it.

Adaptability: certainly, the most important characteristic of an international negotiator. Fitting in with the other will make it possible to do business with totally different cultures, as well as showing respect for them.

Negotiation techniques

There are ways to trade. From the simplest, like an email, to taking a last-minute flight only to shaking hands with the buyer. Each reality is different, and companies need to understand what options they have to make business happen.

E-mail: it is certainly the most used method, especially because the receiver can respond whenever it is convenient for him. No email is urgent, so don’t send four or five emails about something that needs to be resolved right away. In this case, use one of the options below.

Phone call: the one that works the most, despite the language barrier. When both actors are comfortable with the language, calling is still the most efficient way to close a deal.

Video calls: increasingly frequent after the covid-19 pandemic, video calls work like a normal phone call, except that it helps to better understand the other party’s expressions.

WhatsApp: some approve, some despise and simply can’t handle it, but the fact is that WhatsApp and similar apps are here to stay and close million-dollar deals every day.

Travel: needs to be planned in advance and most of the time involves high investment, but it is an efficient way to show the customer and supplier that your company cares about them.

Fairs: fairs and events are ways to find many suppliers or customers in one place and are an excellent choice for those who want to make the most of their trip.

Conclusion

Having a good business relationship with customers and suppliers is the role of the international business professional, which will certainly bring results in the short, medium, and long term. Connect with us! We are always looking for new friendships around the world! Let’s talk and build that connection.

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One of the factors that causes the greatest impact on the final cost result is international freight, due to the high prices and high degree of risk involved.

Among the modes of transport used, maritime freight is the most popular among foreign trade players.

In today’s text we will discover the advantages of the maritime modal and how to hire this type of transport.

Why is maritime freight the most used?

The choice of maritime modal is determined by a series of factors duly assessed.

Some points such as dimensions, gross weight, type of product, transit time, among others, make the maritime option the most suitable for international transport.

So, let’s find out now which factors make maritime freight the most suitable in most cases.

Price

A central point that determines the amounts charged by logistics operators to carry out freight is the price of fuel.

In international operations involving countries at a very long distance from each other, the only two options applicable in most cases are transport between ports or airports.

The air operations costs tend to be more expensive due to the high volume of fuel spent taking into account the volume of transported cargo.

Proportionally, a much smaller amount of fuel is spent to transport cargo in the maritime modal, making this option the least expensive for the freight contractors in most cases.

Capacity

As you may already know, maritime transport takes place mostly through container ships.

This makes the maritime modal the one that represents the largest volume of cargo handled, compared to other modes of transport.

To give you an idea, the Antonov 225 aircraft, which unfortunately was destroyed in the conflicts between Russia and Ukraine, was the largest cargo plane in the world, that was capable of transporting up to 250 tons over long distances.

A container ship, by its turn, supports an average of 230 thousand tons at its maximum capacity.

What are the means of contracting maritime freight?

The international transport market is one of the most fierce in the world economy.

Shipowners and freight forwarding companies compete daily for every cargo handled in the world.

For importers and exporters there are at least three (3) main possibilities for contracting this type of freight.

Marketplace platforms

This is undoubtedly the most recent and innovative method of contracting international maritime freight.

Thanks to the digitalization of foreign trade in general, several platforms have emerged with the aim of facilitating access for shippers to the best freight options available on the market.

In short, the cargo owner registers his demand on the platform by entering all the necessary data – route, type of goods, Incoterms, cargo data, values etc.

After submitting the demand, international freight providers registered on the marketplace are notified and search for options that meet the previously informed need.

As soon as they receive the requested conditions, each supplier sends their offer via system and waits for a response.

After the shipper receiving all offers on the deadline stipulated, he can then decide which of the offers sent best meets his objectives.

All virtually, no need for email and phone calls.

Cargo agents

The best known and most used way of contracting international maritime freight is through freight forwarding companies, that are specialized in international freight.

Normally, they do not have their own truck, ship or aircraft fleets, however, they work together with the owners of these equipment to obtain better negotiations on rates and conditions for cargo handling.

These companies are true intermediaries and have a lot of knowledge of the international logistics scenario, as well as maintain offices and strategic partners spread around the world.

Not by chance, it is very common for Brazilian freight forwarders to use the service of a freight forwarder from another country in the necessary logistical movements in the country of origin of an import, for example. And vice-versa when Brazilian agents provide operational support for loads that “belong” to another agent.

In order to hire this service, it is necessary to contact a salesperson representing the agency company, who will provide all the necessary information to comply with the required procedures.

Shipowners

Shipowners are companies that have their own fleet of ships and their own containers, so they are able to offer the best rates on the market.

The big issue is that it is necessary to move a recurring volume of cargo, of extremely expressive weight and quantity to be able to carry out a direct negotiation with these big players in international logistics.

To ensure that trips on their ships are always made at full capacity, shipowners require in their negotiations that a predefined amount of space be regularly serviced by the shipper.

This type of contracting is chosen by large industries that regularly and daily sell a vast volume of containers and, therefore, are able to negotiate without the need for intermediaries.

So, what about you? Did you enjoy knowing more about the types of freight contracts?

We provide a regular content here made especially for you who wants to know and be on top of everything that happens in foreign trade and international logistics.

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Brazil has been working on facilitating foreign trade and this makes the South American country to continually maintain a surplus in its trade balance, also thanks to the huge quantity of commodities exported every year and the various government incentives for companies to start exporting.

Importing from Brazil is an excellent alternative for companies looking to leave the Asia-Europe axis, on the one hand because of the wide variety of products, from proteins, grains, cellulose, and even fruits, but also because it is a country that holds several producers of the same item, which allows the importer not to be hostage to only one producing company.

EXPORT FLOW CHART

Before starting an import from Brazil, it is necessary to understand how exports work there. The language is Brazilian Portuguese (although many people think it’s Spanish as almost the entire South America speaks the language).

The culture is warm and welcoming, which means Brazilian people like to talk, receive people over, meet, hug. That is why it is quite common for the exporter to call many times, to meet the importer in person, to attend trade fairs, so: get ready.

Exporting in Brazil does not require government authorization most of the time, except when there is a product that cannot leave the country for reasons of force majeure, as has happened all over the world with products related to the fight against COVID-19.

There is no taxation for exporting products from Brazil, except income tax due by the selling company, which is calculated on the profit that the selling company will obtain on the net revenue generated from the sale of the product.

Search for suppliers, inspection, and negotiation

It is possible to find suppliers in Brazil even on sites like Alibaba, but they are not as present in the Brazilian market as they are in Asia. For this reason, there are associations and consortia of companies that maintain working groups to broadcast the names of companies that desire to export. Chambers of Commerce can be good venues, in addition to specific fairs and events.

It is feasible to carry out inspections in Brazilian factories and producers, although some sectors in which Brazil is a leader in exports (such as meat, for instance) already count on teams whose knowledge of world markets is vast and who attest that Brazilian products meet the requirements of most of the demanding countries, either in terms of sanitary precautions or religion.

Bureaucracies, documents

Like anywhere in the world, Brazil has its own export legislation. The requested documents are quite common, but there are some other specific ones, such as the Export Clearance, for example. Check some of them:

INVOICE and PL

An Invoice and a Packing List are required to carry out an export in Brazil. There the PL is called Romaneio de Carga.

BL, AWB

Bill of Lading and Airway Bill are required on Export operations but can be issued electronically if the destination country accepts such method. The e-BL can also be used.

DUE

DUE is the so-called Declaração Única de Exportação in Portuguese, meaning Single Export Declaration, which was implemented recently in the country and has already managed to drastically reduce the time it takes for an export to be cleared by the Brazilian Federal Revenue. It is a simple electronic document that copies the invoice – another document already issued for the international sale.

International Logistics

When we talk about exports, we immediately think about cargo. When a product is being analyzed, the next thought is the international logistics. As a gigantic country, Brazil has dozens of ports and hundreds of airports of all sizes, including the two busiest port and airport in South America.

It is necessary to negotiate well with the exporter who will pay for the freight and will be responsible for it, since a freight leaving from Manaus, north of the country, or from Santos, southeast region, and busiest port, can cost twice the difference, in addition to the risks and distance involved – since Manaus has a very precarious structure compared to Santos, so pay attention to these details.

Collect

Collection in Brazil is not a difficult challenge, it is just an expensive service. The country is full of highways and the road transport is its main mode of transport there. The truck fleet is sufficient, and it does not take long to find availability for a shipment.

International shipping

There are many alternatives for international freight leaving Brazil, both by air and by sea, in addition to road transport to South America. In the maritime modal, the scarcity of space and equipment have been constant for years, the COVID-19 pandemic has only made the situation even more chaotic.

In the air and road modal the situation is better, however, the offer of space is also limited and the most used airports, which are Guarulhos and Viracopos, constantly suffer from the lack of windows for scheduling the cargo delivery.

Delivery

Delivery in Brazil is relatively simple and there is a port or airport close to each state. States that are not on the seacoast can easily use the most common ports, as is the case of Minas Gerais, one of the largest states in Brazil in terms of GDP and which is not surrounded by ocean. Exporters in this region use Rio de Janeiro or Santos as a shipping port, which are relatively close to it.

Conclusion

Brazil is a country with a strong export trade and can be an excellent source of income for companies looking to diversify markets, escape seasonality, or even develop a lasting partnership taking advantage of one of the many trade agreements the country has to encourage export.

It is very important to have a reliable agent in Brazil to take care of all the details of your export. We can get you an international shipping quotation for your cargo. Contact us!

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Because there are many products sold and bought daily all countries in the world impose phytosanitary barriers to protect their territory from the invasion of pests, or the departure of precious goods, or simply to avoid shortages upon non-tariff barriers – as happened at the height of COVID-19 pandemic, in which countries have forbidden the export of alcohol gel and masks, for example.

Cargo agents and customs brokers are professionals who are prepared to guide importers and exporters at the time of the operation, to avoid financial problems and delays when sending or receiving an international cargo.

What are consenting bodies

Consenting bodies are institutions directly linked to the State with the objective of controlling and inspecting the entry and exit of products from the domestic territory, based on the technical standards of each segment. These departments, whose legal nature may be autarchies, act in their respective fields to regulate the quality of the material or demand its adaptation to the national market, according to each area.

Requests from importers and exporters take place via Siscomex or Portal Único. Exports are nowadays requested via LPCO (abbreviation that in Portuguese stands for Licenses, Permissions, Certificates and Other Documents) and imports via Import License, except for some products whose release already takes place via LPCO, and can be automatic or non-automatic, or post or pre-shipment.

List of consenting bodies on import operations – abbreviations in Portuguese

Brazilian National Agency of Electrical Energy – ANEEL

National Health Surveillance Agency – ANVISA

National Film Agency – ANCINE

Department of Foreign Trade Operations – DECEX

Federal Police Department – DPF

National Department of Mineral Production – DNPM

Brazilian Institute for the Environment and Renewable Natural Resources – IBAMA

National Agency of Petroleum, Natural Gas and Biofuels – ANP

Brazilian Post and Telegraph Company – ECT

National Institute of Metrology, Standardization, and Industrial Quality – INMETRO

Ministry of Agriculture, Livestock and Supply – MAPA

Ministry of Science, Technology, Innovations, and Communications – MCTIC

Superintendence of the Manaus Free Trade Zone – SUFRAMA

National Nuclear Energy Commission – CNEN

Army Command – Controlled Products Inspection Directorship – DFCP

List of consenting bodies on export operations  – abbreviations in Portuguese

Brazilian National Agency of Electrical Energy – ANEEL

National Health Surveillance Agency – ANVISA

Department of Foreign Trade Operations – DECEX

Federal Police Department – DPF

National Department of Mineral Production – DNPM

Brazilian Institute for the Environment and Renewable Natural Resources – IBAMA

National Agency of Petroleum, Natural Gas and Biofuels – ANP

Ministry of Agriculture, Livestock and Supply – MAPA

Ministry of Science, Technology, Innovations, and Communications – MCTIC

Superintendence of the Manaus Free Trade Zone – SUFRAMA

National Nuclear Energy Commission – CNEN

Army Command – Controlled Products Inspection Directorship – DFCP

Ministry of Defense – MD

Consenting bodies’ performance

The consenting bodies act, for example, directly in the Import Licenses or LPCOs, analyzing when there is the need of an inspection, or when the wood is condemned for lack of treatment or lack of inspection stamp, or when they determine the prohibition of products, or define that the imported product does not have a national similar and can be nationalized.

Some products may require the consent of several bodies simultaneously, which may grant or reject an operation according to Brazilian government parameters, and in some cases, in addition to the Import License, it may be necessary to prior register the product or the company, as for instance ANVISA and INMETRO, that requires the products to be registered before being shipped.

The consenting bodies’ role on Brazil Cost

Much has been speculated about how the consenting bodies hinder the development of Brazilian foreign trade. Some professionals understand that the sole function of some of the bodies is to bureaucratize imports and exports, while others argue that with the technology and the Portal Único implementation, the delay in releases will finally end.

The fact is that some consenting bodies still analyze each request, which in cases of post-shipment licenses can generate heavy storage costs, demurrage, and the opportunity cost, since the goods are stopped at the port or airport. Important to remember that in Foreign Trade, every daily fare of any service is quite expensive.

Conclusion

The consenting bodies are important intervening agents in Brazilian exports and imports. Companies that intend to sell or buy products from abroad must pay attention to whether they are subject to the consent of the responsible body to be nationalized or exported.

XXX is ready to advise its customers on the need for Import License or LPCO, in addition to offering logistical strategies that reduce the costs of the operation in cases of inspection or delay by the inspection authority.

Request a price quotation from one of our experts.

O post What is it and what are the consenting bodies? apareceu primeiro em Savilog.

In the past, choosing for a service provider was based on trust, recommendation, or experience, which could limit the foreign trade professional in his choice.

With the AEO certification arriving in Brazil this scenario has changed, as certified companies are verified by the Federal Revenue and undergo rigorous data verification criteria.

What is OAS?

Authorized Economic Operator, or AEO, is an international modality of certification that was adopted by the Brazilian Federal Revenue. The certified company goes through a rigorous process that verifies its ability to maintain cargo security and compliance with tax and customs aspects.

Who can be AEO

Cargo agents, transporters, importers, exporters, depositories of goods under customs control in bonded warehouses, depositories in Special Places for Clearance Exportation Dispatch (known as REDEX in Brazil), port operators and airport operators can apply for AEO certification.

Customs brokers are not entitled to be certified as AEO because of the Federal Revenue Normative Instruction no. 1834/18, which resulted from many lawsuits filed by brokers who alleged restriction of the profession exercise because of the benefits that the program would generate to some professionals.

What are the modalities?

The current modalities available for AEO are AEO Security, AEO Compliance and AEO Full, and the Compliance one is divided into two levels, according to art. 6 of Federal Revenue Normative Instruction no. 1985/20.

AEO Safety (AEO-S)

It is the modality that uses as a basis the security criteria of the logistics chain applied in the flow of foreign trade operations.

AEO Compliance (AEO-C)

It is based on compliance with tax and customs obligations criteria, and depending on the level of criteria required, AEO-C Level 1 and AEO-C Level 2 may still be granted.

AEO Full (AEO-F)

It is the highest certification stage, which includes companies that are approved in the AEO Safety and AEO Compliance Level 2 modalities simultaneously.

What are the advantages of choosing a freight forwarder with AEO certification?

Companies certified as Authorized Economic Operators are granted with a virtual verification seal on SISCOMEX website, which makes the release of their loads faster, the logistics simpler, in addition to having a direct channel of contact with the Federal Revenue that allows to clarify doubts in specific cases of obstacles in the process.

AEO importers can also start the process of releasing cargo in advance during international transport (custom clearance over water and over air) for loads with Import License granted at the time the Import Declaration is registered (provided they do not require inspection physics).

Conclusion

AEO certified freight forwarders are prepared to streamline the process according to program benefits and help importers and exporters save on warehousing costs, so consider putting AEO certification as a primary criterion when choosing your partner.

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The Russian president, Vladimir Putin, have engaged Russian troops to invade Ukraine aiming at the definitive occupation of the former Soviet Union country.

Experts in geopolitics point out that the Russian Kremlin’s desire is to resume the old project of the USSR as a nation internationally respected for its military and economic power and that he has used the fact that Ukraine had vented a possible alliance with NATO (North Atlantic Treaty Organization) as the final straw to start belligerent operations against the eastern European neighbor.

In today’s article we will detail the main aspects that were impacted on the international scene due to what is already considered the biggest war of the 21st century.

Logistics bottlenecks and freight prices

The first impact felt in the global supply chain was the stoppage of operations at ports and airports in Russia and Ukraine.

Shipowners and airlines operating in these destinations immediately canceled ongoing operations and are no longer accepting any demand for boarding to this region.

The first effect as a consequence of this stoppage is the bottlenecks in international logistics, resulting in cancellations and delays in shipments and the need to transfer all the volume that would previously be handled at these nations to other destinations.

All this change in schedule and routes impacted the flow of other cargo from the European continent and Asia mainly. This led to an increase in freight by operators to cover all the rework demanded. 

Fuel prices

Russia is the third largest oil producer in the world, a good part of the world’s fossil fuel consumers depends directly on the country that triggered this war.

With all the economic sanctions already imposed onto Russia and the impossibility of shipping the fuel sold, the market dynamics is pragmatic: lower supply, higher demand, high prices!

Oil is one of the commodities that supports a high number of economic, industrial, and commercial sectors.

The price of a barrel of oil was trading at approximately USD80.00 in January, and currently it exceeds USD100.00.

This increase impacts the entire global supply chain, affecting the price of fuels for shipowners, airlines, carriers in general.

This increase is felt at the end of the thread when all costs are passed on to the prices of the items sold to the final consumer. In addition, drivers in general suffer from shortages and exorbitant prices offered at gas stations. The lack of gasoline has even affected countries like the United Kingdom in many of their cities.

Increase in the cost of living

Based on studies shared by the International Monetary Fund (IMF), the conflict in Eastern Europe will cause long-term damage to the global economy.

The first indices recorded as a result of the conflict are (i) the slowdown in global growth and (ii) the increase in inflation.

This is mainly due to the general insecurity on the part of international investors, who feel forced to withdraw their capital from emerging economies.

Also, according to the IMF, consumers will mainly perceive the economic impact of rising food and energy prices.

Global supply chain redistribution

This is a macroeconomic factor that encompasses, in addition to the consequences of the war, the impacts of the pandemic that started in 2020.

Commodity producers realized with these two great phenomena that there is a great dependence of some specific countries on items of high importance in the international scenario.

Good examples were the PPE equipment, respirators, and medical supplies that were concentrated in Chinese suppliers during the height of the pandemic. Furthermore, recently we’ve been seeing the concentration of fertilizer supply by Russia and Ukraine, whose conflict directly impacted Brazilian agribusiness in the short term.

In response to this finding, experts in international economics point to increasingly growing movements seeking a supply redistribution of the main inputs used by industries in the world.

What is expected is that the large concentrations of commercial power in some countries will be better balanced, since this dependence on commodities tends to decrease in the same way that the exploitation of other products tends to increase. 

New world commodity order

Despite the negative consequences, great opportunities for commodity-producing countries, mainly in Latin America, emerges out of such terrible war between Russia and Ukraine.

According to data released by Bank of America (BofA), some factors together enable countries like Brazil to enter the international commodity market even more strongly.

The aspects mentioned by BofA are the increase in commodity prices, the high SELIC rate that motivates international investment, and Russia and Ukraine independence, except for the fertilizers.

This makes the South American countries boost even more exports of crude soy oil, lead ore, grains, and iron ore.  Every war has drastic humanitarian and economic consequences.

Despite the worldwide clamor for the conflict to end and for an amicable resolution between the two nations to be set, we see that the economic impacts cannot be ignored until the long-awaited peace arrives.

It is noted that there are many worrying signs, especially regarding the price increase as a result of the low supply of products and high costs.

This rise in prices is what most affects the global population, who daily feels in their pockets the consequences of the chaos caused by the war.

On the other hand, in the macroeconomic scenario, the geopolitical board is increasingly busy, with great business opportunities, mainly linked to what has been called “the new world order of commodities.”

And in this international economic game, Brazil is seen as one of those most likely to benefit from the gaps left by Russia and Ukraine.

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There are consumer markets for practically everything that is manufactured in Brazil and in the world, so it is necessary that the export manager understands that probably its buying public will be found in very different places compared to its country of origin and, as if that were not enough, the legislation and custom rules of the country of destination shall probably be different too.

Why export

Trade between nations exists because no country is self-sufficient. Brazil, for example, has a vast territory and produces several items, mostly related to food, but also primary items, which will be destined for export.

Examples are soy, rice, sugar, coffee, orange juice, beef, chicken and pork, coconut water, as well as steel, iron ore, cotton, paper, and cellulose, among many others. These are the products that keep Brazil’s trade balance always positive, because although they do not have high added value, they are sent abroad in large quantities.

Internal instabilities, seasonality, market diversification, favorable floating exchange rates, markets with high purchasing power, globalization, and brand expansion are just some of the advantages that exports offer to Brazilian companies.

Who can export?

Any company that produces something in Brazil can export, as long as it has its legal obligations in place. In addition to the companies that carry out their operations directly, there are consortia of companies to facilitate the search for customers and understanding of customs barriers.

Another facilitator is Correios (Brazilian national postal service), which offers a model for sending abroad called Exporta Fácil (which can be translated into “export easily”), whose objective is to help companies that are starting or that do not have experience in the process.

Companies that want to start with exports do not necessarily need to be enrolled in the Federal Revenue system known as RADAR. They can hire a Trading Company that is, without incurring illegalities.

What are the most wanted destinations by exporters?

Brazil is a champion of exports to countries in the Middle East and Asia, heavy consumers of Brazilian meat, and Latin America, destination for industrialized products produced by Brazilian companies, either by national industries or by subsidiaries of American and European companies that use the country as a local production hub.

To Europe, Brazil exports a large amount of fruit, and to the United States food in general, such as fish and some meats, in addition, of course, to the açaí berry, famous all over the world.

How to find international clients?

There are several ways to find a potential international client. Selling to him is another story, as from the initial prospecting to the closing itself may take a long time. Distance is a factor in delays and objections, as the product needs to be seen, trust needs to be built, warranty agreements need to be signed, payment, production and delivery dates need to be established, and many other details.

International fairs are good methods to find potential buyers and get used to their culture, which is something practically impossible to achieve in the virtual environment. At these international events, companies take samples of products and trust can be strengthened more quickly, as it is possible to be sure that the person with whom you are used to speak only by phone/internet really exists.

Sales portals such as Alibaba (the largest in the world) are also good places to find buyers, as they often verify the company, or at least some part of it, and offer an interesting sale protection program, assuring the buyer that the product will be delivered as agreed and the seller that payment will be made.

What foreign habits and traditions influence exports

Exporting to a country with totally different habits and traditions is a challenge. Often, it’s not just religious or food habits, but also changes in the calendar and even working days of the week. In fact, the calendar itself can be totally different from the western one, which is used in Brazil.

In Dubai, United Arab Emirates, the week literally starts on Sunday and ends Thursday. The weekend is made up of Friday and Saturday, so if you need to talk to the importer on a Brazilian Friday, he probably won’t be working because it’s his weekend.

At the same time, in Muslim places it is common to stop anything being done for prayer. So, it is common for the buyer to say his prayer even when he is in a meeting with you. They usually excuse themselves and leave, regardless of anything. The goods sell will also need to undergo a cultural adaptation, for example the case of chicken meat, the way the birds are slaughtered needs to follow the Muslim religion principles.

On the other hand, in Asian countries buyers tend to respect sellers more if they are the same age and gender, while in others a male buyer may refuse to talk to a female seller.

Conclusion

Each nation has its own customs and habits, which may have been developed by ancestors who lived in that region or taken by settlers. These practices pass from generation to generation and directly influence the business world.

It is important to know a little about the local culture before starting export planning to any destination, because due to such a difference the product may not be accepted, or the buyer may not like the way a company negotiates and decide not to buy.

So, did you know all these points? Leave your comments and suggestions so we can continue the conversation.

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In these cases, it is important to understand well what are the details that comprehend a freight quote, so as not to miss sending any information, and what are the specifics of that destination so that, when your company requests a price, does not get surprised with additional expenses.

What is an international freight quote?

Any import or export that takes place in Brazil can be quoted through an international freight quotation, usually made by a freight forwarder, to foresee what costs are there in an operation, even if all the cargo details are not available.

Quotations can be in BID or SPOT format, and there is no right or wrong model, each company needs to adapt the model to its needs. Quotations can be an All In or VATOS model – the first one was practically created with the advent of the Covid-19 pandemic.

BID

They are quotations in the form of a bid competition launched to the market, generally valid for over three months and it is common in companies with high volumes but without enough professionals, where it makes no sense to quote on a case-by-case basis.

SPOT

They occur in single imports or exports, normally not continuous or where company policy requires a specific quotation. It is more common for cases that are outside the routine of the foreign trade professional and quite applied to companies with low volume of processes.

All In

Quotations are presented from the beginning informing all the values ​​comprised by the proposal, which do not include extra costs or unforeseen expenses. It is widely used for door-to-door quotes.

VATOS – VALID AT TIME OF SHIPMENT

These are the cases in which the values ​​applied in the quotation will be those valid at the time of shipment. This often happens in the maritime modal, since the period between the closing of the freight and the arrival of the cargo can be around 45 days, and it is not possible to predict a cost, or when or if a cost may vary according to market conditions.

What are the points of attention?

Before anything else, it is important to know the INCOTERM of the operation, which is the negotiation defined between buyer and seller. Regardless of which it is, it is possible for the freight forwarder to operate part of the process or it as a whole or even just one of the parts of the logistics, such as road transport, for example.

In Brazil, for example, the importer cannot have the taxes collected by third parties, therefore, it is useless to send a DDP quote to Brazilian agents, as they will not be able to transfer the values. They can, however, estimate the costs for the purposes of studies and comparisons, but they will never be able to operationalize this INCOTERM.

What rates should be included in a shipping quote International?

In addition to common local fees, such as THC (Capatazia in Portuguese), BL Release, ISPS, Deconsolidation, there will still be indirect costs that are not informed, often paid by the importer, such as storage and the Siscomex fee (import system usage fee), but are not limited to these, as any detail in Brazilian operations can generate extra costs.

What information is required to request an international shipping quote?

There are essential details for an international freight quote, such as, for example, the INCOTERM, weight and measures, the number of volumes – boxes, pallets, containers -, type of product – if it needs temperature control, if it is dangerous, if has high added value –, shipment forecast, origin, destination, and modal.

There are some data that are not essential, however, if presented the quotation will be quite accurate, namely: who will pay the freight, when the quotation will be closed, what is the urgency for cargo to arrive in Brazil and if there is any restriction of country of transshipment or connection, which is quite common for some products.

What happens in cases of unquoted rates?

Many international logistics players in Brazil make careful planning regarding logistics costs since any excess value directly impacts the price of the product for the consumer. As the exchange rate variation is high, Brazilian freight forwarders do not usually accept price revisions after the shipment has been approved, as such measure may affect the relationship between importer and exporter.

For cases in which it is necessary to change values, it is more practical to consider in the initial quotation what the possible costs of each operation would be, whether they are only estimates or due.

What tariffs should be considered in an international freight quotation?

Every international freight quote must contain some basic items, necessary according to the chosen INCOTERM, and which would cause inconvenience to the importer or exporter if be missing, such as: 

FREIGHT

This is the basic cost of transport, which makes up the price of the product and will be present in any modal, regardless of who will make the payment. Even in cases where the freight is paid by the exporter and is included in the cost of the product, it must be shown on the shipping document.

THC

This is the cost of moving the cargo between the pier at the port and the vessel or from the runway to the aircraft. In Portuguese it is called Capatazia and must be mentioned in maritime cases as it composes the value of the freight to be taxed in Brazil.

BAF and FSC

Bunker Adjustment Factor is ship fuel and Fuel Surcharge Charge is aircraft fuel. They can be floating or not but need to be mentioned on the bill of lading.

PICK-UP and DELIVERY

More common in cases where INCOTERM EXW and DAP are applied, delivery and collection costs need to be present in international freight quotes for door-to-door cases.

CUSTOMS CLEARANCE

Mandatory in EXW and DDU cases, customs clearance in Brazil can only be carried out by a company authorized by the importer or exporter. It is not common for the owner of the cargo to appoint as representative a forwarder without knowing him first, so it is important to pay attention to this.

Conclusion

There are important details that need to be present in the international freight quotes, and the freight forwarder who knows all the secrets of quotation in Brazil takes the lead. Get close to a specialist freight forwarder who has mastered international transport, send your quote requests to Savilog. 

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Brazil’s relationship with the North American giant is historic, the USA was one of the first nations to recognize our country’s independence in 1824.

If your company plans to explore more of this relationship and enter one of the main markets in the world, we are sure that this article will help you providing fundamental tips for your exports in the land of Uncle Sam to be a success.

TRADE SCENARIO BETWEEN BRAZIL AND THE UNITED STATES

In order to be able to visualize more precisely the possibilities that the US market offers, let’s first “zoom out” and analyze the panorama of the trade balance between the two economies.

Trade balance data for 2021 has got Brazilian exporters excited.

Brazil broke the historic record in terms of trade volume exported to the US, reaching a level of US$31.1 billion.

This export value, compared to 2020, represent an increase of 45%. Even knowing that 2020 was an atypical year due to the pandemic, the amount exported in 21 cannot be minimized.

The main factors driving this growth were the increase in American domestic demand and the high prices of some Brazilian sectors such as steel and oil.

Among the most relevant products in terms of exported volumes are semi-finished iron and steel products, crude oil, aircraft, pig iron, unroasted coffee, and cellulose. In addition to these, some products with lower added value, but which are handled in large quantities, have experienced high adhesion from the American market, such as wood for American civil construction, for example.

WHAT ARE THE FIRST STEPS?

When starting to expand your business in the United States, if your company haven’t got professionals with know-how in this market yet, the first step would be to find specialized companies in American territory. Another important step is to hire key professionals who already have this experience.

In addition to commercial and logistics advisory companies, some organizations whose purpose is to promote Brazilian international trade can bring the help your business needs in the initial moments.

This is the case of Apex-Brasil and Invest Export Brasil, which works as a kind of international showcase for Brazilian exporters.

After structuring your team of professionals and strategic partners, a good way to prepare is to get to know some aspects of American customs legislation and the main documents required in the export operation.

Another crucial point in the initial moments of negotiation is the definition of which INCOTERM will be used, DDP operations for example involve many risks and extreme attention, which make this negotiation term one of the most expensive when formulating the final negotiated price.

MAIN PRECAUTIONS WITH LEGISLATION

A first precaution is to study the type of legal treatment given to the specific product that will be marketed. The United States has its own tax classification system called the Harmonized Tariff Schedule of the United States (HTSUS).

Depending on the classification of the exported goods in the US customs table, there will be a requirement for specific documentation and will be subject to taxes that are also specifically applicable to each case.

Due to the 9/11 attacks, the US Government has created a rule that the US Customs Authority must be notified of all cargo that will be exported to the country 24 hours before its shipment, for prior analysis and due customs treatment.

Another legal aspect to be observed is the requirement by US Customs to contract a Bond, which is a mandatory insurance for any merchandise imported into the United States.

MAIN DOCUMENTS

Within a Foreign Trade operation, several documents are required, but operations involving the United States go beyond the ordinary and the exporters need to be very careful.

The main documents are:

Commercial Invoice (CI) – This is the most important of the documents involved, it contains the information that will be considered by the Brazilian and North American customs for due conferences and legal applications.

Packing List (PL) – The so-called packing list with detailed information on the transported cargo, very important for defining the handling, packaging, and transport of the product.

Importer Security Filing (ISF) – This is the registration required by Customs and Border Protection (CBP – US) for all goods entering the United States. This record contains at least 12 information related to customs nature for the release of the cargo on American soil to be carried out. It is important to note that the ISF must be informed to CBP at least 24 hours before the departure of the shipment.

Power of Attorney (POA) – This document is highly necessary especially in DDP operations, where the exporter is responsible for all clearance fees at destination. The POA is issued by the exporter authorizing an American agent (customs broker) to represent him before the American tax authority.

Bond – This is the mandatory insurance required for legal importation into the US to be authorized. It is important to highlight that it is only possible to issue the ISF and POA upon presentation of a Bond, which can be in the Continuous Bond or Single Bond modality.

Customs Entry – Upon receiving the Arrival Notice, the customs broker in the USA submits the cargo release record, at this moment the Customs Entry is registered containing all customs and commercial data relevant to the operation.

 Entry Summary – After registering the Customs data (cargo clearance) and confirming the release, the Entry Summary is registered, which is the official document attesting that the import was authorized, it would be the equivalent to the Brazilian DUIMP (Single Import Declaration – BR).

CULTURAL ASPECTS AND OTHER IMPORTANT TIPS

The United States is one of the countries with the highest immigration rate in the world, that factor and its rich continental extension results in a very high cultural complexity.

Some tips that may help:

– Study well the specific region where you will operate – there are commercial regions where buyers tend to be more aggressive in negotiations and others where they tend to be more conservative. In addition to the commercial profile of each region of the country, the United States has different time zones, for example, which can affect the planning of possible commercial visits.

– Invest in commercial travels – the American market values ​​and invests in business generated through trade fairs, workshops. Americans appreciate physical presence when negotiating. An important tip is to pay attention to American national holidays when making your schedule, and to avoid the summer vacation periods (June, July and August) so that you won’t waste time on unproductive trips.

– Be prepared to negotiate with everyone – as already mentioned, the United States is full of immigrants, so it is very common for Brazilian exporters to do business with entrepreneurs of other nationalities.

– Be sharp – most especially on the American East Coast, around New York, the punctuality factor and advance booking are seriously appreciated by executives in the region, so be aware of the schedule.

– Seek to share responsibilities – despite having one of the largest logistical structures in the world, the service provider segment in the US constantly suffers, such as the lack of truck drivers for example. The tip is, when negotiating responsibilities within an international operation, it is desirable to avoid INCOTERMS where the exporter is responsible for the operation on American soil, DAP and DDP for example.

– Have a reliable business partner – it is common for Brazilian exporters to engage close relationships with partners that can offer all the necessary support for the best performance of operations at the destination. In this case, mainly International Cargo Agents are strategic partners that have the necessary expertise to provide the support your company needs.

Now that you are an expert on the American market, shall we export to America together?

Talk to one of our experts and find out more about our know-how in one of the biggest markets in the world.

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This type of operation grows more than 10% a year and Brazilian Federal Government expects this index to reach an incredible 30% annual growth.

This is because the “BR do Mar” project was approved in 2020, placing cabotage even more in the news as it increasingly becomes an option seriously considered by major logistics operators in Brazil.

In this article, we will get to know a little better about cabotage and the “BR do Mar” project, which promises to revolutionize the reality of cargo transport in Brazil.

But what is cabotage?

Cabotage is maritime transport carried out between ports within the same country.

The name cabotage is a tribute to the important Venetian navigator Sebastian Cabot, who in the 16th century explored the entire North America coast.

This mode of transport has the potential to provide an important positive economic impact for the country due to its handling capacity, which normally takes place in containers, the low cost, the safety of the operation, and the reduced environmental damage.

Among the main benefits of cabotage we may highlight:

• Logistical efficiency – as the country’s navigable coast is the main transport route, cabotage does not suffer as much as other modes problems such as traffic jams, the condition of roads or railways, availability of vehicles and the fuel high costs.
• The high level of security – among the available modes, it is the one subject to the lowest rate of theft, robbery, loss, and damage to the goods handled.
• Environmental efficiency – using the country’s waterways, cabotage is the modal that requires the least fossil fuels in the ton/kilometer ratio, which means that it emits less harmful gases to the environment.

But as in whatever logistical solution chosen: not everything is perfect and cabotage also faces some specific challenges that are very well understood and studied today.

The main challenges faced by cabotage operators in Brazil are the long delivery time, the limitation of available routes, and the restriction over flying foreign flags ships.

The bureaucracy for releasing the loads in the pre-shipment and post-shipment is the main cause of the slow delivery of the cargo sent. By itself, the maritime modal is already the one that naturally presents the longest transit time, with the addition of numerous supporting documents required, the length of the journey becomes even longer.

Even taking advantage of the extensive Brazilian coast and still having the possibility of using the Amazon basin, cabotage is only possible where there are adequate port structures for ships to be moored and cargo to be properly unloaded. In addition, although the longest stretch is carried out by water routes, there is still dependence on the flow of cargo using the road modal.

As it is a logistic solution that aims to benefit and use the country’s resources, the fact of restricting the cabotage practice only to Brazilian flag ships makes the technological level and the market competition lower, delaying the positive impact expected by the project for the economic development of the country.

Even so, understanding the main challenges of cabotage, we are able to perceive even more importance in the aforementioned BR do Mar Program, which seeks to bring direct solutions to such problems faced.

Formally known as the Cabotage Transport Stimulation Program, BR do Mar support its measures on four pillars whose main objectives are to stimulate competition, reduce costs and establish new routes.

The four pillars of the program are: fleet, naval industry, costs, and ports.

In the naval industry, the government mainly aims to stimulate the naval sector regarding maintenance and repair services. The main action is to enable the use of Marine Merchant Fund resources so that both foreign and Brazilian companies can enjoy the services of Brazilian shipyards.

With regard to costs, the main focus will be on reducing bureaucracy and simplifying the required procedures that burden cabotage operations.

In Brazilian ports, the BR do Mar promises to increase the operational capacity of the available terminals through new leases of port regions, flexibilization of contracts for the entry of initial loads, tenders for new port operators, authorization of private operators, not to mention the large investments in existing contracts.

Regarding fleets, the Federal Government will stimulate competitiveness as a result of promoting an increase in the available fleet by authorizing charters of foreign ships for the use of Brazilian Shipping Companies.

What is known is that cabotage is the great Brazilian bet for the balance of the country’s logistics matrix for the coming years, expecting to reach 2 million TEUs handled in 2022.

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