Insight Focus
STS-10 and São Sebastião port concessions are set for 2026. Planned upgrades at Santos will boost container handling capacity by 50%. São Sebastião is expected to become a key hub for agricultural exports like coffee and oranges.
The auctions for STS-10 — the mega terminal of the Port of Santos — and the Port of São Sebastião, scheduled for the first half of 2026, are expected to unlock long-standing bottlenecks in Brazilian port logistics. Currently nearing saturation, Santos is set to gain four new berths along with a series of structural improvements.
The port of São Sebastião, located 140 kilometres from Santos, is poised to become a logistics hub for the shipment of products such as coffee and orange juice, shipped in containers.
The central objective of the auctions — expected in March or April of next year — is to strengthen the port infrastructure of the Southeast region, responsible for half of the country’s wealth production, and alleviate pressure on Santos. In 2024, the largest port complex in Latin America handled 180 million tonnes, a 34% jump compared to 2019 — and already very close to maximum capacity.
Source: Port of Santos
Currently, a large portion of Brazilian agricultural production is shipped through the port of Santos—simply due to a lack of options. This is the case, for example, with coffee and a range of other foods, such as orange juice and sugar.
Source: Port of Santos
Improvements to the ports of Santos and São Sebastião, located near important agricultural centres, should change this.
Investments in the Port of Santos
Under the STS-10 project, planned investments, amounting to BRL 6.4 billion (equivalent to USD 1.2 billion), should enable the construction of a 1.3-kilometre quay and the modernisation of a 622,000 square meter area, in addition to the construction of new berthing docks. With this, the port’s container handling capacity should increase by 50%, reaching around 10 million units per year, according to the Brazilian government.
The expansion of the port of Santos aims to improve its operational fluidity. The Santos terminals, responsible for almost 40% of cargo handling in Brazil, risk having their capacity exhausted in the coming years if improvements are not made.
Port of Santos
Logistical problems at the port have been frequent. At the beginning of the year, almost 60% of the vessels arriving in Santos had altered operational deadlines, causing extra storage costs and fines for exporters. In September, the rate rose to 75%.
São Sebastião Set to Receive More Agricultural Cargo
The concession for the port of São Sebastião, that foresees investments of BRL 2.5 billion (around USD 470 million), includes the construction of berths dedicated to container transport and the modernisation of an area of 426,000 square metres, among other improvements. In this way, the terminal will be able to absorb at least part of the cargo shipped from Santos.
Modernised, the port should attract mainly exporters of products such as orange juice, peanuts, meats and dairy items, normally transported by truck — often refrigerated — to the port of Santos, where they are loaded onto container ships.
Today, São Sebastião handles everything from bulk sugar to barley, and cattle. “Due to its proximity to agricultural centres, the port is set to start handling significantly more food, especially cargo transported in containers,” says Casemiro Carvalho, partner at the consulting firm 4Infra and director of logistics at the Federation of Industries of the State of São Paulo.
Source: Port of São Sebastião
For other agricultural cargoes, such as grains and sugar, that do not require refrigeration and are often transported by train to the port, Santos should remain the primary option. Railways like Rumo and VLI connect the interior of São Paulo to the Santos terminals, offering more attractive costs and efficiency than road transport.
Although there are no plans to build railways to the port of São Sebastião—accessible only by road—the terminal will have exclusive road access, that should be inaugurated in March of next year. This means that trucks will no longer need to pass through the city of São Sebastião, arriving directly at the port.
Port of São Sebastião, Publicity photo
Challenges in Structuring the Auction
Although the government plans to hold the auctions in the coming months, there are doubts about the feasibility of the schedule. The bidding model for STS-10 is yet to be defined.
The rules proposed for the auction by the National Agency for Waterway Transportation (Antaq), responsible for port regulation, have generated criticism for restricting the participation of operators already active in the port of Santos, such as Maersk and MSC. The Ministry of Ports and Airports has been pressing for a definition.
Cargo ship in the Port of Santos
“The intention is to hold the STS-10 auction first and then grant the concession for the port of São Sebastião. The logic is that companies that don’t win in Santos may be interested in São Sebastião,” says Frederico Bussinger, partner at the consulting firm Katalysis and former president of the port of São Sebastião.
The market is already heating up for the competition. COSCO and Maersk are considered natural candidates for the auctions, due to the strategic location of the ports and the strong demand for cargo handling. “All that’s left is to define the rules of the game; the companies are already ready for this challenge,” says Bussinger.
