Brazil's Bolsonaro signs cabotage bill into law

Brazil’s President Jair Bolsonaro signed into a law a bill to boost cabotage as part of an effort to reduce the country’s high dependency on freight transportation by road and to support the port sector.  

The government aims to expand the share of cabotage in the country's cargo transportation matrix to 30% from 11%, according to the infrastructure ministry. Currently two-thirds of Brazil’s cargo is transported by truck.

"One of the great advances will be the possibility of increasing the offer and the quality of cabotage transport, stimulating competition, encouraging competitiveness and increasing the availability of the fleet dedicated to cabotage in the national territory," the ministry said in a statement.

"With more competition in the provision of the service, the costs of transporting cargo between the country's ports will tend to fall. Actions aimed at training and qualifying workers in the sector are also planned," it added. 

Known as BR do Mar (the sea highway), the bill allows companies to charter vessels for coastal shipping and permits the use of foreign-owned ships that were built outside Brazil.

The government expects the number of containers transported by cabotage to increase to 2mn TEUs this year from 1.2mn in 2019 thanks to the new law, and to boost the capacity of the maritime fleet dedicated to cabotage by 40% in the next three years.