Why are ports important to the economy

Oct, 20, 2022
Why are ports important to the economy

A country’s economy largely depends on its ports since these places are responsible for the entry and exit of goods inside cargo carriers. The Online Dictionary of Portuguese defines a port as a “natural or artificial haven for ships, equipped with the necessary facilities for loading and unloading goods and passengers. Large and busy ports have appropriate structures and equipment to receive, store and reship goods. Generally, these facilities include wharves, depots, tugs, mechanical loaders, unloaders, auxiliary barges, train cars, and trucks.”

Ports can be broken down into two categories: maritime (bordering an ocean or sea) or fluvial (installed on riverbanks). As a coastal country with a significant number of navigable rivers, Brazil concentrates on many important ports for Latin America.

Port of Carracks

The first Brazilian port was known as the Port of Carracks (Porto das Naus), named after the three- or four-masted ocean-going Portuguese-style sailing ships, located in the city of São Vicente, on the coast of present-day São Paulo state.

Installed on Tupiniquins Avenue in 1532 by Martim Afonso de Sousa, close to the local suspension bridge, the Port of Carracks was the first wooden pier with customs attributions in Brazil, making it the first commercial port between ships that docked in the region.  In 1580, the sugar mill owned by Jerônimo Leitão was built in its rear area.

In 1615, the mill was destroyed by Dutch privateers commanded by the famous Joris Van Spilbergen.

The Port of Santos, located in the neighboring city, also on the south coast of São Paulo, began its activities in the early 16th century, operating with rudimentary structures until the end of the 19th century, when the Port was granted to private investors. The concession holder, Companhia Docas de Santos (CDS), built and inaugurated the first 260 meters of quay in 1892, thus creating Brazil’s first Organized Port.

Since then, the Port of Santos has gained a prominent place in the country’s economy and has become the largest port in Latin America. The port receives both container carriers and loose cargo vessels. According to Santos Port Authority, the port authority, in 2022 (January to August), 110.1 million tonnes of cargo were handled at the site, while the flow of ships in the first eight months of the year reached 3,454 vessels.

Please find below the share of Brazil’s main ports in containerized exports. The chart below was elaborated with DataLiner data.

Brazilian Ports | Exports | Jan – Aug 2022 | TEUs


Why are ports important to the economy

Source: DataLiner



In the first eight months of 2022, Brazilian container imports saw a drop in terms of volume of 8.9% compared to the same period of 2021. The arrival of goods from abroad is key to understanding the Brazilian trade balance.

See below the share of Brazilian ports in imports. The data is also from Datamar’s market intelligence platform DataLiner:

Brazilian Ports | Imports | Jan-Jul 2021 vs. Jan-Jul 2022 | TEUs

Why are ports important to the economy

Source: DataLiner

Port of Paranagua

Based in the southern state of Paraná, the Port of Paranagua is, as of 2022, the second-largest port in terms of container shipments in Brazil. It stands out mostly in the export of chicken meat. In the first eight months of 2022 alone, the Port of Paranagua was responsible for the outflow of 101,410 TEU of poultry meat.

Another maritime terminal that stands out in container logistics is Portonave, in the city of Navegantes, in the state of Santa Catarina. Portonave was first inaugurated in 2007 as the first private container terminal in the country, aiding in the flow of products coming from Brazil’s South, Southeast, and Center-West regions, in addition to other countries in South America, as well as in the internalization of cargo from all over the world.

In 2022, from January to September, Portonave saw a throughput of 487 thousand containers vis-à-vis 479 thousand over the same period in 2021.

Infrastructure, draft, and productivity

In addition to a strategic location, an adequate waterway and port infrastructure are essential to securing the competitiveness of a port. Waterway infrastructure, for example, includes access to port channels, maneuvering basins, breakwaters, and mooring berths. In turn, the equipment used in handling and storing goods, such as cranes, conveyor belts, and warehouses, is known as port superstructure.

Another point that influences port productivity is the depth of its channel; the deeper it is, the greater its capacity for receiving ships with greater drafts.

Draft is the depth at which the lowest point of a vessel’s keel is in relation to the waterline.

Knowing a vessel’s draft for each cargo condition and water density guarantees navigability safety in shallow areas. This is because every ship can float between a maximum draft when fully loaded and a minimum draft when carrying no goods.

The greater the draft of a ship is, the greater the tendency for it to be wider and, consequently, carry a greater amount of cargo. The first generations of container ships used to have a draft of 9 meters. The draft of Post Panamax Plus models stands between 14 and 15 m. That is why many ports currently invest in bedrock removal (the process of removing or destroying submerged stones or rocks, which prevent navigation at its full potential) and dredging (cleaning, de-silting, widening, clearing, removing material from the bottom of rivers, lakes, seas, bays, and channels) to increase its depth and thus receive larger ships.

It is worth clarifying that ships have a draft while ports have depth.

Port workers:

A port is a complex structure. Any failure in one of its gears compromises the entire logistics. Recently, the closure of Chinese ports due to the country’s Covid Zero policy has created widespread global logistical issues. To avoid problems like this, as well as a wide array of environmental and work issues and maintain productivity, different types of professionals are needed. Find out more about them below:

  • Pilot: professional responsible for guiding and assisting national and international navigators in accessing or departing from port areas based on factors such as vessel traffic, geographical conditions, and the weather.
  • Port engineer: role related to developing and constructing terminals on or near the coast. Through hydrodynamic studies, these workers measure the impact of waves, salinity, tides, storms, and seaquakes on port structures.
  • Port manager: works in the port organization, performing strategic, administrative, and operational functions, as well as interacting with supply chain logistics.
  • Port Technician: works in port operations such as supervision of loading, transshipment and unloading of cargo, agency of vessels, among other functions.
  • Logistics professional: develops supply chain transport, storage, and distribution strategies. They also oversee purchasing, receiving, moving, shipping, and distributing materials and products.
  • Customs Brokers: these professionals perform activities related to the importation of goods, such as analyzing and filling out documentation, calculating fees and taxes and checking products. They do so based on tax rules and pre-determined requirements.
  • Occupational safety specialists: oversee labor processes. Their function is to identify risk factors for occupational accidents, occupational diseases, among disrupting and hazardous factors.

Writing about ports is as complex as their operations. For example, regular procedures must be adapted for receiving or shipping non-standard and hazardous materials. It is also imperative to factor in the weather during each cargo operation. There are also security issues in place, such as curbing the flow of illicit substances. Global logistics keep the international economy running, and ports are essential to this process.

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