Removing participation barriers and liberalizing national maritime transport overall is one of the many measures we need to take

This morning, Rodrigo Krell, the executive secretary of the National Commission for Evaluation and Productivity (CNEP), presented the entity’s stance on the bill to amend laws governing Merchant Marine and Navigation to the Senate’s Committee on Transport and Telecommunications. The bill seeks to enhance competition in the coastal shipping market.

While acknowledging that assessing the effectiveness of existing market restrictions falls outside CNEP’s scope, Krell emphasized the pivotal role of competition in driving maximum productivity. He stressed that any rules impeding the entry of new players or hindering the operation of existing capacity should be rigorously justified based on their benefits.

Though CNEP has not conducted a specific study on coastal shipping service quality, Krell highlighted the transformative impact of competition on productivity, rates, and service standards, particularly in fiercely competitive markets.

Krell underscored that increased competition in shipping routes and the entry of new players would result in lower rates and greater options for consumers, ultimately driving sectoral efficiency. He noted that relaxing restrictions typically leads to better utilization of infrastructure and vessels, thereby boosting productivity.

Furthermore, Krell outlined the benefits of reduced logistical and environmental costs, emphasizing that logistical efficiency is a crucial driver of competitiveness, benefitting numerous businesses with lower costs and quicker transit times.

In closing, Krell emphasized the necessity of a multifaceted approach to reinvigorating productivity, highlighting the importance of various microeconomic reforms. He viewed the proposed bill, aimed at eliminating participation barriers and liberalizing national maritime transport, as one of many necessary measures to enhance productivity.

Drawing from CNEP’s earlier recommendation in 2016 to promote competition in the national maritime transport market, Krell stressed the importance of lifting legal restrictions on foreign vessels transporting cargo between Chilean ports. This move, he argued, would foster competition, reduce costs for national cargo transportation, and ensure equitable tax treatment for foreign and national vessels.