Buying a ship from South America might seem like a great way to score a deal. The region offers attractive pricing, diverse ship types, and opportunities to tap into unique vessel markets. But behind the appealing price tags, there are several hidden costs that can catch buyers off guard. From customs fees and regulatory compliance to transport logistics and legal red tape, these unseen expenses can add hundreds of thousands — or even millions — to your bottom line. Whether you’re buying a cargo vessel, bulk carrier, fishing trawler, or passenger ferry, it’s essential to know the true cost of ownership.
** The information provided in this article is based on industry norms, real-world examples, and publicly available insights. However, specific costs, fees, and regulations may vary significantly depending on the country, ship type, shipping route, and other factors. Buyers are strongly encouraged to consult with maritime brokers, customs agents, and legal experts before making any purchasing decisions.
1️⃣ Import Duties & Taxes
💸 What it is: Importing a ship from South America requires paying import duties, tariffs, and taxes to the destination country. These fees are calculated as a percentage of the ship’s total value and can range from 10% to 30%, depending on the country of import.
🚩 Why it matters: Countries like the United States, Canada, and parts of the EU have strict import regulations for used vessels, especially if they don’t meet local compliance standards. For instance, importing a ship from Brazil to the U.S. may incur both a customs duty and fees related to environmental compliance. This can significantly increase the final cost of the vessel.
📈 Real Example: If you purchase a cargo ship for $2 million and face a 15% import duty, that’s an additional $300,000 out of your pocket. Add customs fees, port fees, and inspection costs, and you’re easily looking at a total of $350,000+ in extra costs.
💡 Pro Tip: Always request a customs duty estimate before signing a sales contract. Use import duty calculators or consult with a maritime customs broker familiar with South American ship exports. This small step can save you from a budget-breaking surprise.
2️⃣ Regulatory Compliance & Certification Costs
⚠️ What it is: Ships from South America often need to be retrofitted to meet international maritime standards like SOLAS (Safety of Life at Sea), MARPOL (Marine Pollution Regulations), and Flag State Compliance for the country where the ship will be registered. Non-compliance can result in denied port entry, fines, and even detainment of the vessel.
🚩 Why it matters: South American shipyards may build vessels according to local standards, which may not match the stricter requirements of North America, Europe, or other key regions. Upgrading waste management systems, ballast water treatment systems, and emissions controls can cost $250,000 to $1 million, depending on the age and condition of the ship.
📈 Real Example: If a bulk carrier purchased from Argentina needs a new ballast water treatment system to comply with IMO regulations, the cost of installation alone can exceed $300,000 to $500,000. This hidden cost is non-negotiable if you plan to operate the ship internationally.
💡 Pro Tip: Request a compliance certification audit before purchasing the ship. Check if the ship has certificates from classification societies like Lloyd’s Register or Bureau Veritas. If it doesn’t, factor in the cost of retrofits before purchase.
3️⃣ Maintenance & Repair Surprises
🔧 What it is: Many ships sold in South America are former working vessels from fishing, oil & gas, or commercial transport fleets. These vessels often have continuous wear and tear from heavy usage, and maintenance records aren’t always transparent. Buyers frequently discover expensive repairs needed after purchase.
🚩 Why it matters: Engine overhauls, hull repairs, and system replacements (like propulsion systems) are among the most expensive repairs. For older ships, maintenance records may be incomplete or missing, making it difficult to assess the vessel’s true condition.
📈 Real Example: The cost of an engine overhaul for a mid-sized cargo ship can range from $500,000 to $1.5 million, especially if the engine is outdated or non-compliant. Replacing damaged hull plating could cost $50,000 to $100,000. If these issues aren’t identified during pre-purchase inspections, you could be stuck with a repair bill after the fact.
💡 Pro Tip: Hire a marine surveyor for a pre-purchase inspection. Look for signs of long-term wear on engines, hull integrity, and propellers. Check for any evidence of recent “patchwork repairs” that may indicate deeper problems.
4️⃣ Delivery & Logistics Costs
🚢 What it is: Shipping a vessel from South America to its new homeport is rarely free. Delivery costs include towing, crewed delivery voyages, or transport on a semi-submersible heavy-lift vessel if the ship can’t sail on its own. Additional expenses include fuel, crew wages, canal fees, and insurance.
🚩 Why it matters: Transport costs for ships can range from $200,000 to $500,000 or more, depending on the ship’s size and route. For instance, towing a fishing vessel from Chile to the Gulf of Mexico may require multiple stopovers for refueling, adding costs. If using a heavy-lift vessel, fees are significantly higher but may be the only option for non-operational vessels.
📈 Real Example: If you buy a ship from Peru and need it delivered to Houston, Texas, a towed voyage could cost around $250,000 to $400,000, depending on weather and route distance. If it requires a Panama Canal transit, you’ll face an additional $100,000 to $200,000 in canal fees.
💡 Pro Tip: Request a quote from multiple maritime transport providers before purchase. Plan for weather windows and avoid delivery during hurricane or storm seasons, which can raise costs.
5️⃣ Bureaucracy, Corruption & Delays
🕰️ What it is: Dealing with government agencies in some South American countries can be time-consuming and unpredictable. Bureaucratic delays can stretch the purchasing process from weeks to months. In certain areas, buyers face “unofficial processing fees” to speed things up.
🚩 Why it matters: If you plan to move your ship out of Venezuela or Ecuador, delays can lead to additional port fees, demurrage (when a ship is detained at port), and financial strain on your timeline. Corruption in some areas can result in pressure to pay informal fees or bribes to expedite documentation.
📈 Real Example: A buyer attempting to move a ship out of Venezuela faced delays of over 90 days due to customs hold-ups and administrative bottlenecks. The ship incurred $50,000 in daily port fees while sitting idle at the port. “Expedite fees” were demanded to move the process along.
💡 Pro Tip: Work with a local maritime legal expert who knows the ins and outs of bureaucratic processes. Avoid “under-the-table” payments and stick with fully documented transactions to avoid legal consequences.
6️⃣ Inspection & Survey Costs
🔍 What it is: Before finalizing the purchase of a ship from South America, a thorough inspection or survey is essential. This involves hiring a marine surveyor to assess the ship’s overall condition, check for hidden defects, and provide a valuation. While this cost is optional, skipping it can lead to costly mistakes.
🚩 Why it matters: Without an inspection, you’re essentially buying a ship “as-is.” Hidden damage to the hull, propeller, rudder, or ballast tanks can go unnoticed, leading to surprise repair costs later. Additionally, if the ship’s market value is lower than the agreed purchase price, you may end up overpaying.
📈 Real Example: A buyer from Spain purchased a cargo ship from Brazil without conducting a full survey. After taking delivery, they discovered cracks in the hull, resulting in $400,000 in unexpected repair costs. A pre-purchase survey, which would have cost around $10,000 to $20,000, could have flagged these issues.
💡 Pro Tip: Hire an independent surveyor who isn’t connected to the seller. Look for certifications from reputable classification societies like Lloyd’s Register or American Bureau of Shipping (ABS).
7️⃣ Financing & Currency Fluctuations
💱 What it is: When purchasing ships from South America, you’ll likely be dealing with payments in local currencies (like Brazilian Real or Argentine Peso). Currency fluctuations can drastically affect the purchase price. Financing costs also apply if you’re taking out a loan to fund the purchase.
🚩 Why it matters: Exchange rates can change rapidly. If you negotiate the deal in Brazilian Reals (BRL) and the USD weakens, you may end up paying significantly more than anticipated. Additionally, if you’re financing the purchase, interest payments and bank fees add to your total cost.
📈 Real Example: Let’s say you agree to buy a ship for R$10 million (Brazilian Reals). At an exchange rate of 5.0 BRL/USD, the cost is $2 million USD. But if the exchange rate shifts to 4.5 BRL/USD, the cost rises to $2.22 million USD — an unplanned cost increase of $220,000.
💡 Pro Tip: Lock in the exchange rate using a currency hedging strategy with your bank. If financing the purchase, compare offers from lenders who specialize in maritime finance and can provide lower rates for ship buyers.
8️⃣ Port Fees, Canal Fees & Departure Delays
⚓ What it is: After purchasing the ship, you’ll need to pay port fees, berth fees, and canal transit fees if the ship has to pass through waterways like the Panama Canal. If your ship is delayed at port for any reason (paperwork, inspections, etc.), you’ll face extra charges.
🚩 Why it matters: Ships leaving ports in Argentina, Chile, or Venezuela often face port congestion and delays in customs clearance. This can result in extended port stays, during which port fees rack up. If your ship has to pass through the Panama Canal, you’ll also be charged canal fees based on the vessel’s size and cargo capacity.
📈 Real Example: If you purchase a ship in Argentina and it requires a Panama Canal crossing, canal fees can range from $150,000 to $450,000 for larger vessels. On top of that, every extra day at port can cost between $5,000 to $15,000 in berth fees and demurrage costs.
💡 Pro Tip: Research the departure port’s estimated port clearance time. Arrange for a smooth exit by having your paperwork, inspections, and payments ready to avoid unnecessary delays.
9️⃣ Legal Fees & Ownership Transfer Costs
⚖️ What it is: Transferring ship ownership requires a number of legal documents, including title transfers, flagging, and vessel registration. Each country has its own rules for processing these transfers, and fees apply for registration under a new country’s flag.
🚩 Why it matters: If you plan to reflag the ship (register it under a different country), you’ll face extra fees for flag state compliance. Additionally, you’ll need to pay notary fees, registration fees, and attorney fees to ensure the sale is legally binding and all titles are clean.
📈 Real Example: Flagging a vessel under Panama’s ship registry (a popular choice) can cost $15,000 to $30,000, depending on vessel type. Legal fees for attorneys handling the purchase and transfer typically range from $10,000 to $50,000, depending on the complexity of the transaction.
💡 Pro Tip: Work with a maritime attorney who has experience with ship title transfers in South America. They can ensure the title is clean, liens are cleared, and no outstanding debts are attached to the ship.
🔟 Insurance Premiums & Risk Assessments
🛡️ What it is: When you purchase a ship, you’re required to insure it, both for the voyage from South America to its homeport and for its ongoing operational use. Premiums are based on vessel age, type, route, and risk factors (like weather or piracy).
🚩 Why it matters: Insurance for “in-transit” shipping differs from operational insurance. If your ship must be towed or transported on a heavy-lift vessel, expect to pay for a separate marine cargo insurance policy. Once the ship is in service, annual premiums for hull insurance, P&I (Protection & Indemnity), and pollution liability can range from 2% to 5% of the ship’s value.
📈 Real Example: Insuring a $5 million ship for the journey from Brazil to the United States might cost $25,000 to $100,000 for marine cargo insurance, depending on the mode of transport. Once in service, the ship will also need an annual P&I insurance policy of approximately $50,000 to $100,000 per year.
💡 Pro Tip: Obtain insurance quotes from marine insurers like North of England P&I, UK P&I, and Gard. Consider “all-risk” cargo insurance for delivery voyages to protect against weather, piracy, and delays.
📝 Final Takeaways
Buying a ship from South America can seem like a great deal on paper, but hidden costs can turn a bargain into a burden. From import duties and regulatory compliance to insurance and transport logistics, the expenses you don’t see upfront could add hundreds of thousands of dollars to your total cost. Here’s a quick recap of the 10 biggest hidden costs:
1️⃣ Import Duties & Taxes — Can add 10-30% to the ship’s price.
2️⃣ Regulatory Compliance Costs — Retrofits can cost up to $1M.
3️⃣ Maintenance & Repairs — Engine overhauls can cost $500K+.
4️⃣ Delivery & Transport Costs — Towing and canal fees can total $250K-$500K.
5️⃣ Bureaucratic Delays — Extra port fees and administrative delays can cost $50K+.
6️⃣ Inspection & Survey Fees — Surveys range from $10K to $20K, but save you from larger issues.
7️⃣ Financing & Currency Fluctuations — Exchange rate swings can add $100K+ to costs.
8️⃣ Port Fees & Canal Fees — Panama Canal fees range from $150K-$450K.
9️⃣ Legal Fees & Ownership Transfer Costs — Legal fees and flagging can total $50K+.
🔟 Insurance Premiums — Delivery insurance and P&I premiums can cost $100K+ annually.
💡 Pro Tips to Avoid Costly Mistakes:
- Plan for Post-Purchase Expenses: Don’t blow your entire budget on the ship itself. Leave room for retrofits, taxes, and logistics.
- Do a Full Due Diligence Audit: Pay for surveys, compliance audits, and import tax estimates before finalizing the purchase.
- Hire Experts: Bring in maritime brokers, legal consultants, and marine surveyors who specialize in South American deals.
