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, 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 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 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

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 GOODS DUES

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.

Import/Export vehicle (cars, lorries, machinery) – Per vehicle / machinery basis. TYPES OF GOODS DUE

 Containerized Cargo tariffs is based on container units and commodity 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

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 and victuals 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.

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 MISCELLANEOUS CHARGES