Brazil is changing its transportation culture, says Norcoast CEO

New to the Brazilian cabotage market – navigation between ports – Norcoast started its operations in the country at the right time. This is the assessment of the company’s CEO, Gustavo Paschoa52 years old. In the executive’s view, Brazil has been changing its transportation culture and understanding that port navigation delivers better results than highways.

To the Poder360Paschoa stated that he is satisfied with the performance of the company, which has been operating in Brazil since February. The company entered the market in the wake of BR do Mar, the law to encourage cabotage sanctioned in 2022, which made it easier for companies to enter the sector. According to Paschoa, the law still lacks regulations, but it is already having positive effects on the transport mode.

“Today, Brazilians’ culture is based on highways. Shippers need to plan a little better and move away from this truck culture. I think Brazil is already undergoing this transformation.”said Paschoa. “For every 10 containers transported by truck over long distances along the Brazilian coast, 5 could already be in cabotage.”

Cabotage has a significant economic advantage over road transport. This method is, on average, 20% to 30% cheaper than shipping goods by truck. Despite competing, cabotage does not kill trucks and intermodality is an interesting scenario for companies seeking more competitive freight.

Watch the full interview (20min49s):

Despite the perception that a cultural change is underway, Paschoa stated that there are aspects that can make cabotage more attractive. For the executive, one necessary factor that needs to be reviewed is the Navy’s monopoly on training professionals for the maritime sector. Paschoa explained that the Navy’s graduation rate causes a shortage of professionals in the sector and hinders expansion prospects, as these graduates are sought after by the entire naval sector.

According to Paschoa, the government should open this market to the private sector and maintain the Navy’s monopoly only for training professionals focused on functions related to the defense of Brazilian waters.

“Today the market already has a huge shortage of seafarers. These seafarers are trained in two schools controlled by the Navy [ no Rio de Janeiro e em Belém]. This brings cost stress because everyone is competing for the few professionals”, declared.

Regarding the government’s actions to encourage maritime transport, Paschoa said he sees the initiative to grant waterways to the private sector as a positive move. The government has already selected six projects that should be put out to tender in the coming years.

“These concessions will be important because you will call on a concessionaire to take care of the infrastructure. It is not enough for the river to be navigable, you have to have signage and road regulations to manage all nautical traffic.”

Currently, Norcoast operates in a circuit of 5 ports, from North to South of the country. They are:

• Port of Paranaguá (PR);
• Port of Santos (SP);
• Port of Suape (PE);
• Port of Pecém (CE);
• Port of Manaus (AM).

To the Poder360Paschoa said that Norcoast wants to expand its activities to another port in 2024: the Port of Itajái (SC). “We have been operating for almost 6 months in 5 ports. Looking ahead, we are negotiating to be able to have a call in our rotation in Itajaí to serve the market in Santa Catarina and part of Rio Grande do Sul. We intend to start this operation this year.”