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CHAPTER 9 PORT TARIFFS

INTRODUCTION
Port Tariff : Is the reward / payment payable to the
port authority for the rendering of a service.
Pricing – depends on the forces of supply & demand.
Effected by direct competition between carriers, port
authority, commodity & alternative transport (inland &
air transport).
Cost of port charges is significant in final market
price of goods.
Mostly, sea transport cost including port
expenses is between 8% to 15%.
FACTORS INFLUENCING THE LEVEL OF PORT
TARIFFS
1. Competition in its many forms
 Location of competing port
 Quality and ancillary services
 Use of discount rates, usually based in traffic volume

2. The nature of product


 For loose cargo, it will depend on type of commodity,
quantity, overall cubic measurement, value, & period of
shipments.
 Dangerous, dirty @ unobvious cargo – higher rate. On
negotiation.
FACTORS INFLUENCING THE LEVEL OF PORT
TARIFFS
3. Trade which cargo originates
 Coastal or deep sea.
 Deep sea cargo – higher tariff than coastal @ short
voyage.
 Why? Total sea freight for coastal tend to be lower in
volume.
4. Port cost
 Cost of value added service provided by port authority,
based on direct & indirect cost plus profit.
 Direct : Labor, electricity, fuel, maintenance etc.
 Indirect : Depreciation, loan interest, administration etc.
 Level of technology
FACTORS INFLUENCING THE LEVEL OF PORT
TARIFFS
5. Special facilities to handle goods
 Wide range of facilities – influence
cost and tariffs.
 Investment & maintenance cost will be reflected in dues

6. Transport mode
 May be using container, Ro-Ro or loose cargo will
determine handling arrangements.
 Development of container has quickened cargo
movement.
 Results – lower handling cost per ton compared with
loose cargo consignment.
FACTORS INFLUENCING THE LEVEL OF PORT
TARIFFS
7. Exchange rate variations
 Exchange rate which are weak can attract traffic
against those which are strong.
 Important factor in formulating tariff to
remain competitive.
8. Agreement with other port
 By countries or group of port.
 Pitch tariff at particular level to lessens competition.
 Avoid price war, which could result in uneconomic tariff
structure.
FACTORS INFLUENCING THE LEVEL OF PORT
TARIFFS
9. Statutory controls & subsidies
 State-owned port – government control level of
charges.
 State subsidies to ensure tariff remain competitive.

10. Flag discrimination


 Widely practiced worldwide.
 National flag operator have favorable
tariff than foreign vessels.
 Also favorable berth access.
 To support local business & maintain a national fleet.
FACTORS INFLUENCING THE LEVEL OF PORT
TARIFFS
11. Marketing
 Intense competition – more promotion of product &
service.
 Encourage negotiated rates, based on volume and
commitment / loyalty to port.
12. Others
 Value of goods.
 Ease of handling and storage.
 Custom requirements.
 Fragility or awkwardly shaped cargo.
SHIP DUES
 Harbor and dock dues. Applied to cover the cost
of using berth and service such as lighting the
channels, pilotage,conservation & maintenance of
berths.
 Also known as Port Dues @ Wharfage.
 Charged to ship owners or charterers. Based on
either gross or net registered tonnage of vessel.
 Also on nature of voyage – foreign going vessels
being charged at higher rate than coasters.
SHIP DUES
 Specific dues allow the ship to remain for
specified period e.g., 30 days.
 Daily charge is raised on expiry of the specified period.
 Ship dues will be charged to:
 Vessel on service calling at a port to discharge/load
cargo and/or passengers.
 Ships laid up at berth/quay (daily rate).

 Ship calling at port for shelter from a storm.


 Vessel calling at port for bunkering, replenishment
or repairs.
SHIP DUES
 Discounted rate granted to:
 Liner operators that use port regularly.
 Vessels calling only to bunker
 Vessels berthing only to change crews
 National flag ship
 Ships docking for repairs.
 Free : Vessels which call at the port for emergency
purposes, provided no cargo is discharged or
loaded, nor is water taken.
 In most major port, pilotage is compulsory. To lead
through the seaway access & in the port itself.
SHIP DUES EXAMPLE
GOODS DUES
Dues levied on cargo passing over a berth as import
or export merchandise.
Also known as cargo dues, dock rates, wharfage
rates or quay rates depending on port.
Goods dues shall apply to all goods discharged or
loaded and to any transfer of goods from ship to
ship, ship to shore and from shore to ship.
Paid by importers or exporters to the port authority
GOODS DUES
Charge by some unit of weight, volume or number
and nature of goods. (Dry bulk – RM 0.85 per ton, Cars –
RM 45 per cars)
Charges in respect of goods, including container,
general cargo, livestock etc., brought into, taken out
of or carried through a harbor by a vessel.
But not including charges in respect of work
performed, services rendered or facilities provided in
respect of goods so brought, taken or carried
TYPES OF GOODS DUE

Most general cargo (break bulk or liquid bulk) dues are


based on tonnage – vary according to commodity.
Grains (Rice, wheat, maize) : RM 5.60 per ton
Chemical : RM 8.50 per ton
Cargo dues for livestock are assessed on per head
basis.
Road haulage vehicles are calculated on laden or
unladen basis – total laden weight of vehicle & per
vehicle basis.
Palletized cargo is charged on a tonnage or per unit
basis.
TYPES OF GOODS DUE
Import/Export vehicle (cars, lorries, machinery) – Per
vehicle / machinery basis.
TYPES OF GOODS DUE

 Containerized Cargo tariffs is based on container units


and commodity (general @ dangerous) in container.
Full Container Load (FCL) Charges
Less Container Load (LCL) Charges
Empty Container (MT) Charges
Transhipment Charges
Storage Charges
Reefer Charges
Removal Charges
Shifting Charges
Over Dimensional Container (OD) Charge
TYPES OF GOODS DUE
TYPES OF GOODS DUE
TYPES OF GOODS DUE
PASSENGER DUES

 Levied by port authority on shipowner or charterer for


the passenger, motorist, car or coach passing over
the berth.
 For the facilities provided – Lounges, refreshment,
immigration, baggage facilities etc.
 Based on number of passengers / cars / coach.

 Charged to the account of shipowner.


Will be incorporated in passenger or
motorist fare.
GOODS DUES EXEMPTION

The following goods are exempt from Goods Dues:


 Luggage of travelers
 Containers, pallets and other transport bases
used to facilitate transport and not themselves
merchant goods
 Requisites andvictuals acquired for the ship´s
own use except fuel
 Coastal transport of the dock industry
MISCELLANEOUS CHARGES

1. Warehouse or transit shed rental


 Cargo in process of transhipment will be
subjected to warehouse rental (daily or weekly
basis).
 Tariff on the metreage area occupied or the tonnage
of cargo.
 Cargo handling charges to move cargo into or from
warehouse would be raised separately, based on
tonnage.
 Bonded warehouse – Goods not yet paid custom
duty. Charged separately, normally negotiated price.
MISCELLANEOUS CHARGES
2. Port equipment hire charge
 Wide range of equipment may be hired :
Pallets, fork lift, platform, rope hand truck,conveyer
etc.
 Charged on daily hire basis

3. Pilotage and tugboat charges – Based on GRT of


ships
4. Cargo palletizing service – Use of mechanical
appliances or machinery for palletizing and strapping
cargo on pallets
5. Removal of refuse from port authority premises
MISCELLANEOUS CHARGES

6. Fire service – Most port have fire fighting vessels.


Charged only when used.
7. Police, Security guards service – Charged on per
hour basis.
8. Anchorage dues – Charged on ship lying at anchor
(lay up berth). Per day and per ton.
9. Fresh water supply

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