General Superintendence recommends condemnation of port service companies
The General Superintendence of the Administrative Council for Economic Defense – CADE recommended, in opinions published on 8 October 2014, the condemnation of four port operators for adopting practices with anticompetitive potential that would have affected port service users in the ports of Salvador, in the state of Bahia; Rio Grande in the state of Rio Grande do Sul; and Santos, in the state of São Paulo. The charged companies are Tecon Salvador S/A, Intermarítima Terminais Ltda., Tecon Rio Grande S/A, and Rodrimar S/A Transportes, Equipamentos Industriais e Armazéns Gerais.
The companies operate in port terminals and are responsible for loading and unloading ships. They detain strong market power in the handling and positioning of unloaded goods their terminals.
The port operators also perform a second activity, they storage goods until they are cleared for export or internalization. In this market, the companies compete with the so called independent customs warehouse, which are places outside the port’s primary zone that also offer storage services.
The investigated conducts by the General Superintendence were the following:
- Administrative Proceeding no. 08012.003824/2002-84: it was verified that between 2000 and 2006, the port operators Tecon Salvador and Intermarítima Terminais, in addition to the usual positioning rates denominated box rate, charged extra fees to unload import containers destined to the competitors customs warehouses.
- Administrative Proceeding no. 08012.005422/2003-03: it was verified that Tecon Rio Grande, between 2002 and 2010, charged in addition to the box rate, a “15-day Storage Fee” for import containers subjected to the Declaration of Customs Transit regime unloaded in less than 48 hours.
- Administrative Proceeding no. 08012.001518/2006-37: it was verified that, between March 2006 and February 2012, the operating company of the Santos port terminal, Rodrimar, charged customs warehouses an alleged “Segregation and Delivery Service” fee in addition to the box rate.
- Administrative Proceeding no. 08012.009690/2006-39: it was investigated the charge by Rodrimar, between 2004 and 2005, of an alleged cost recovery rate in reference to the implantation of the ISPS Code – a set of security rules.
All cases have the charge of determined rates by the port operators themselves for an alleged provision of additional services. CADE’s General Superintendence understood, however, that in these cases the free creation of new fees by the operators - in addition to the box rate, which already pays for the positioning services of the terminal – has potential to generate anticompetitive effects. This potential exists due to the fact that by adopting such conducts, the operators, which already own a dominant position in the terminal, may discriminate the goods stored in competing customs warehouses and may increase the costs of these competitors.
CADE already judged similar cases, for example the Administrative Proceeding no. 08012.007443/1999-17, in which the companies Terminal para Contêineres da Margem Direita – Tecondi, Libra Terminais Santos S.A. – Terminal 37, Usiminas and Santos Brasil – Tecon were condemned for imposing a “Segregation and Delivery Service” rate to customs warehouses in the port of Santos.
The four cases are now to be judged by CADE’s Tribunal, responsible for rendering a final decision. If condemned, the companies could pay a fine from 0,1% to 20% of their revenues, among other penalties foreseen in the law.
New investigation – The General Superintendence determined, also on 8 October, the opening of a new administrative proceeding to investigate the charge, by Tecon Rio Grande, of a deposit fee to be paid for imported goods or goods returning to Brazil unloaded in its terminal. With the opening of this proceeding, the company will be notified to present its defense.