Brazilian shipping companies are advocating for a five-year extension of the non-incidence of the AFRMM on certain navigation operations.
The sector argues that maintaining the exemption is important to preserve cabotage competitiveness, reduce logistics costs and support the continued expansion of maritime transport in Brazil.
Market Impact
The extension may support:
- lower freight costs for certain maritime operations
- greater predictability for cabotage operators
- increased fleet utilization and investment planning
- stronger competition between coastal shipping and road transport
However, the debate also involves the balance between reducing costs for shipping companies and preserving revenue for the Merchant Marine Fund, which supports shipbuilding and maritime infrastructure.
Legal & Contractual Implications
Market participants should monitor:
- tax treatment of maritime freight operations
- potential changes to AFRMM incidence and exemptions
- contractual pass-through of freight-related costs
- financing implications for the Merchant Marine Fund and shipbuilding projects
Photo: Canva
