The increase of idleness in organized ports: understand the main reasons

IDLENESS IN ORGANIZED PORTS
6 minutes to read

The idleness of organized ports is a reality in the daily life of charterers — maritime chartering — and professionals in maritime logistics. However, the reasons behind it are not always clear. It is very important that charterers understand their causes and follow the scenario in question. In this way, they will be able to act proactively in their functions.

To further understand the subject, we interviewed Bayard Umbuzeiro Filho, businessman and president of ABTRA (Brazilian Association of Terminals and Customs Enclosures). It provides information on indicators, reasons for decreasing activities, losses, possible solutions and other data on the topic.

If you want to understand the causes behind the idleness of organized ports, follow this content!

What is considered an idle port?

In general terms, this term designates a low port movement. Both the difficulty of attracting new investments and low results in terms of efficiency are preliminary reasons for the space to receive such designation.

According to Umbuzeiro Filho, the idleness of a port “can be measured by the low attractiveness or, even, the absence of new agents interested in competing for the occupation of its areas”. Such factors often take shape due to the lack of response to the demands of trade and market flows.

This year, data on ports indicate an average rate of 56%. This information comes from a report made by TCU, the Federal Accounting Court. “While the movement of containers from the public sector was 85% in 2010, last year this share dropped to 69% of the total handled by the national port system”, points out the businessman.

Although expressive, it must be kept in mind that such data vary from one port to another. Some conditions affect them, such as:

  • reach of the hinterland;
  • location;
  • proximity to production and trade centers, etc.

Another point cited by Umbuzeiro Filho — and which directly impacts the movement, causing the place to be identified as idle — concerns the low results in terms of optimizing the use of its spaces. In other words, the functionality of the organized port can put it in a low activity scenario.

How serious is the idleness of organized ports?

It is not possible to state that the low movement is only perceived today. It has been visible for 30 years. “Since the Brazilian Government passed, in the 1990s, the port operation to the private sector”, details the specialist.

According to him, this privatization has caused successive federal governments to adopt policies that distanced organized ports from the agile and necessary pace of foreign trade flows. Bureaucracy also plays an important role in idleness.

The president of ABTRA points to the excess of legalities, which ended up reducing the rhythms of the ports: “they imposed long and bureaucratic bidding processes, rigid and complex contracts, in addition to excessive regulation and the growing interventionism in the private sector”.

In short, the excessive number of administrative procedures, among other factors, culminated in the weakening of local authorities. They have become less able to carry out the governance of port complexes. This was due to a continuous weakening, precariousness, reduced decision-making power and low autonomy in contracting essential services.

What are the reasons behind this situation?

The reasons described above speak about the idleness of organized ports in general. However, Umbuzeiro Filho presented some specific elements that contributed (and continue to do so) for it to occur. They will be explained in more detail below.

Management bottlenecks

One of the reasons cited is the distribution of positions without due technical criteria by the state agencies, although at the present time it has been significantly reduced. Much of this has to do with the State’s interference conditions in the progress of the proceedings. “There is also a regulatory and competitive asymmetry in relation to terminals of private use”, the professional adds.

Investments in the private sphere

In comparison with the condition of organized ports and the policies related to them, private spaces have invested heavily in infrastructure, technologies and labor training. These points made their performance, in terms of port operations, equivalent to European and Asian terminals, for example.

Monopolies

According to Umbuzeiro Filho, there is a monopoly in the supply of labor, which hinder the degree of efficiency in the leased terminals. It needs to be resolved in order to reduce idleness in organized ports.

What are the losses associated with low movement?

In addition to the reduction in activities arising from containerized cargo, more challenges can be cited for the future. One of them is the lesser recognition of these cargos as products of high added value (in comparison with agricultural commodities) in foreign trade.

Investments are also impacted. Umbuzeiro Filho explains: “the TCU report points out that, in the last six years, R$ 33.2 billion were invested in private use terminals (TUP). Meanwhile, auctions for leasing in organized ports totaled R$ 3.3 billion, 10% of the amount invested”.

What are the possible solutions?

There are agencies that seek to reduce idleness. Both the Ministry of Infrastructure and the SNPTA, the National Port and Waterway Secretariat, can be cited in this regard. They have been seeking for less bureaucracy and bidding processes with regard to port activities, for example.

In addition, they follow “the best international practices in the sector, in order to facilitate the investments of capital by the current lessees and the entry of new private agents”, points out the professional. Finally, it is possible to talk about the support and contribution of private companies involved in port activities.

Regardless of the factors mentioned, they work to improve long-term planning in the sector. This allows new courses of action to be created. The president of ABTRA talks about the privatization program: “(he) foresees the concession of services performed, until then, by the port authorities to the private sector”.

In addition to all the points covered, there is a need for decentralization of decisions, including also a greater openness to the participation of the private sector that operates in ports. It is also necessary to rely more and more on transparency in the indication of public positions in the sector.

Understanding the idleness of organized ports is a fundamental issue for maritime logistics professionals. Knowing the reasons behind it allows scenarios to be properly monitored and measures related to it make up the decision-making of charterers, among others involved. It is essential to stay informed!

If you want to further enrich your notions of Brazilian cargo movements, be sure to download our e-book and discover the largest port complexes in the country!

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