Authors: Dr. Theo Notteboom and Dr. Athanasios Pallis

Port pricing is subject to the variety of charges and fees that ports and terminals levy on their users.

CHAPTER CONTENTS

1. Port Pricing Strategies

Pricing is an important aspect guiding the interactions between economic actors in the port industry. The port authority (usually a public entity), other public bodies (state or municipally-operated departments or enterprises), and private companies are the three economic actors that offer services and facilities in a port. Therefore, they are responsible for setting the pricing structure for the port users. The services that these actors offer include:

Infrastructural services related to the use of docks, quays, locks, port sites, anchorage, and concessions.
Services to vessels and cargo such as terminal operations, warehousing and distribution activities, mooring, lashing and securing, surveillance, tallying/marking/weighing, inland transport operations, forwarding and supply chain management, shipping agency activities, ship and cargo surveying, customs, sanitary services, veterinary inspection, waste disposal, bunkering, and water supply.
Nautical services such as pilotage, towage, and vessel traffic management.

The basic principle is that port users pay a price or tariff for the services offered to them and the facilities they use. The difference between price (charged to users) and cost (for providing the service) has a substantial impact on the profitability of both the service providers and the users and is one of the “P” components of marketing (product, price, promotion, and place).

Pricing strategies can contribute to achieving a sustainable competitive advantage. However, developing an optimal pricing strategy is complex. This is not only a strategy about setting prices and effectively implementing pricing policies. It also includes the measurement and enforcement of prices so that they are consistently applied and levied.

Port actors engaging in port pricing need to be aware of some critical foundations:

Formal contractual relationships between port actors. Not all port actors have direct contractual relationships that involve the charging of prices or tariffs. For example, container shipping lines pay terminal operators for the handling of containers at their terminals. The pricing strategy of the terminal operator is thus focused on shipping lines. Cargo owners or their representatives (such as freight forwarders or 3PLs) do not pay the container terminal operator for container handling. Instead, the shipping line leads in recovering the paid terminal handling costs from them through the freight rate and relevant surcharges, particularly Terminal Handling Charges (THC). Understanding the contractual relationships between port-related actors is a prerequisite for developing effective pricing strategies.
The interaction between the pricing strategies of different actors. The pricing strategies of different port-related actors have a mutual influence since any price change. The pricing system used and the level of fees set by one actor can affect the competitiveness of other actors and the entire port. For example, a port authority that levies high land fees to terminal concessionaires might force the latter to charge higher cargo handling fees to the shipping lines, negatively affecting the port’s attractiveness and the competitiveness of local firms.
Cost structure. Relates to the cost share of each element contributing to the provision of a port service, such as energy and labor. A cost center involves a series of activities that do not generate revenue but are essential to support management and operations. For management, it is an accounting principle used to analyze port costs and is indispensable when building up a pricing system. For operations, it can involve essential training and maintenance activities.
The benefits and added value created. If a port is operating economically, then revenue flows will equal or exceed cost flows (cost recovery principle). Pricing systems are designed to transfer the advantages gained by the recipients of the benefits, wholly or in part, to the service providers in the form of a revenue flow. It is useful to use revenue centers, such as accounting principles that allow the grouping of all revenues of the same nature. If a port actor tries to charge its customers more than the benefits offered to them, the relationship is not sustainable. However, certain indirect benefits of port services cannot be readily quantified and expressed as a financial flow, which complicates the setting of fair price levels.
Market segments and port users might have different price elasticity. Not all port actors react in the same way to price changes. Some port users are relatively captive to the port. This is either because of the lack of alternative ports or because a decision to use another port would result in high switching costs. Other users are comparatively footloose and very sensitive to changes in prices and tariffs. Furthermore, with ports embedded in supply chains, some port users attach greater value to the available capacity, reliability, and overall quality of the port services than to the price. Port service and facilities providers should understand the customer base and figure out the role port-related prices play in explaining the behavior of current and potential users.
Measure and analyze. Port actors should measure and analyze how specific pricing schemes affect the revenue/cost variation by product, customer, segment, channel, and geography. Such exercises help segment users understand how different prices can affect user segments and develop customized key performance indicators (KPIs) to facilitate the right pricing decisions. Data-driven technology supports pricing analytics.
Balance between standard pricing/tariffs and individualized pricing. Despite observed differences in price elasticity, it is often not advisable to design customized prices for each port user or cargo flow. Port actors typically try to balance tailored approaches to specific users and market segments with a simple, standardized pricing or tariff structures. Simple pricing structures rely on a limited number of charges and the use of a limited number of variables in the basis for each charge.
Balance between penalties and incentives. Pricing can be used to influence the behavior of port users. Pricing can act as a penalty to customers who do not perform well or do not follow the rules. Examples include fines to shipping lines that do not respect the waste disposal rules and the penalties for terminal operators who do not meet the pre-set throughput guarantees included in the concession agreement. Incentive pricing gives a bonus or benefit to users who meet certain thresholds in performance or compliance. The endorsement of price differentiation practices based on the environmental performance of port users and specific services is part of this approach (a good example is the Environmental Ship Index (ESI) program). Port-related actors can also apply a system whereby the collected penalties from underperformers are used to reward those who comply.

2. Pricing and Asset Utilization

There is a relation between pricing and the utilization level of resources or assets such as land, facilities, or equipment. Prices should ensure that port land and facilities are used most efficiently. When land or specific port facilities are in short supply, prices are likely to increase so that only those users who utilize the asset efficiently have a net benefit sufficient to make such a use worthwhile. When a port has ample space available, there is an incentive to lower prices to attract additional business. The dwell time charges used by container terminal operators provide a good example:

Dwell time charges are applied by container terminal operators when containers are stacked on the terminal. Container terminal operators typically provide a ‘free time’ period for containers stacked in the yard, such as for the first five days. Once a container stays longer than the free time, the cargo owner has to pay a daily dwell time charge.

Such pricing schemes give an incentive to some cargo owners to pick up their containers on time. They also enable the terminal operator to optimize land productivity, such as the number of TEUs per hectare per year. Terminal operators who face land availability issues or high throughput guarantees are more likely to impose a short free time period and high dwell time charges.

In practice, port-related prices might not always change much in case of capacity shortages. Still, the behavior of port users changes as a consequence of an increase in indirect costs caused by additional time costs for cargo and vessels or additional charges imposed by other actors in the supply chain. For example, a container shipping line may impose a congestion surcharge on cargo owners when calling at a congested port.

The objective of ensuring the most economical utilization of assets cannot always be achieved through port charges alone. The pricing system can only influence the utilization of assets as long as the demand for the services of those assets is elastic. When demand for a service is inelastic in relation to the price, other measures, generally more authoritative than pricing, have to be found and implemented.

3. Pricing and Customer Management

Many port-related studies on pricing take an economic perspective rather than a marketing and relationship management point of view. The pricing strategy appears to be dealt with in isolation and is not necessarily based on market research, linked to the different requirements of major segments, or integrated with other strategic marketing decisions. For example, pricing methods used by port authorities often do not seem to be driven by commercial considerations, even though many port authorities increasingly act as commercial undertakings.

Three pricing strategies can be used in a marketing context depending on the customer segment and type of relationship required:

Satisfaction-based pricing strategies are useful for risk-averse customers as they assist in reducing their aversion by providing more certainty in pricing structures. This can be done by offering service guarantees, using benefit-driven pricing where customers are charged only for the services used, and flat-rate pricing, decreasing uncertainty.
Efficiency pricing appeals to customers requiring the lowest available prices. The strategy requires an internal focus on streamlining operations to enable cost reductions, which are then passed on to customers.
Relationship pricing encourages the customer to develop further relationships with the port. Ports should not use this strategy with all customers, but only with those that are either profitable in the long term or have a clear growth potential. Two methods are available to achieve a relationship pricing strategy. The first is by using long-term contracts to encourage customers to move beyond a transactional approach. The second is by adopting price bundling, where multiple services are combined and offered for a single price. Price bundling is also an effective means of making comparability between services provided by ports more difficult.

4. Price Incentives for Port Customers

Price incentives are designed to promote certain desired customer behaviors. Four categories can be distinguished:

Volume incentives.
Service incentives.
Utilization incentives.
Gain-sharing incentives.

Incentives could be granted by all port-related players in an effort to attract activity to the port and should preferably meet several criteria:

Effective. They should make a difference, tangibly or perceptively.
No effect on the general price levels.
Sustainable and defendable, and not easy to copy by competitors.

To illustrate the above, the following sections will apply the four types of pricing incentives to the pricing strategies of a container terminal operator for services delivered to container shipping lines. The target audience of these types of incentives depends on the focus of the container terminal:

When transshipment volumes are high, and carrier haulage is substantial, the relative focus will be on the shipping lines because they dominate the container flows.
When the deepsea carrier decides on feeder routes, the incentives will be towards the deepsea lines. Where the feeder operator is the leading party, these lines will be discounted.
Granting discounts to shippers and forwarders creates direct commercial relations with the customers of the line and the (real) decision-makers in merchant haulage markets or markets where merchant-inspired carrier haulage is involved.
Where competitors can easily copy discounts, the terminal should ensure that additional logistic added-value is created through aligned connections, warehousing, distribution, or other logistic activities.

A. Volume incentives

A container terminal operator can implement volume incentives for shipping lines. The growth of deepsea volume is discounted by some percentage. Ideally, the customer share is taken as a measure, possibly in conjunction with volume growth objectives, although measuring this ratio is complex. Volume incentives can also relate to service strings or loops. The terminal operator can also use a discount sum or a discounted rate per container when a line or alliance introduces a new liner service or considers moving a liner service from one port or terminal to another. These volume incentives do not alter the rate structure and rate level of the already existing volumes. The average rate level only decreases when the liner service calls at the terminal. The withdrawal of a string will automatically lead to higher revenues per box.

For attracting cargo-specific volumes, an amount per container or a special dwell time arrangement can be developed to bring in a specific shipper in partnership with its preferred shipping line. A terminal operator can develop volume incentives for specific market segments. Some examples of rate incentives for feeder traffic include:

Start-up incentives. Fixed sum or an amount per container and possibly limited to a pre-defined utilization percentage of the capacity of the targeted service.
A specific discount can be applied for a particular feeder route the terminal wants to promote.
A separate rate for handling full or empty containers from a container feeder vessel.
A rebate for each container handled from a container feeder vessel.
Rebates in volume brackets (0 to 29,999 moves, 30,000 to 39,999 moves, etc.).

B. Service incentives

A container terminal operator can rely on service incentives for shipping lines. The most common service incentive is a penalty for under-performance and a bonus for over-performance. The rate incentive can be structured as a discount (a certain percentage on the handling) or as an amount per hour above the agreed or contractual berthing time.

Bonuses tend to be unsustainable because of the fact that repeating overperformance automatically develops into new, perceived service standards. Penalty systems are also challenging to implement because underperformance is often the result of both sub-optimal input and process quality of the shipping line and terminal.

Specific incentives can be generated for input variables of the shipping lines where they actually influence or even determine the service level:

Incentives to avoid late arrivals on the landside (for example, an add-up) and vessels arriving out of the schedule window.
Incentives to avoid additional administrative handling due to changes in container weights or calling vessels.

C. Utilization incentives

In a container terminal context, utilization incentives are designed to promote terminal utilization or reduce capacity demand peaks. A good example is dwell time incentives. A conventional way of applying dwell time incentives is allowing for a free number of storage days, after which a certain amount per TEU per day is charged. More sophisticated schemes differentiate by the direction of the container flow, such as for import, export, or transshipment containers. Progressive rate levels are applicable after the free period, in successive periods increasing the applied storage rates.

Other incentives to reduce peak capacity requirements include:

Pre-notification bonuses for truckers.
Bonuses for arrival outside peak periods.
Gang waiting-hours charges when vessels arrive out of the scheduled window.

Utilization incentives can aim at avoiding terminal congestion. There are essentially two types of congestion:

Congestion is mainly caused by cycles/seasonality in the traffic volumes. In peak periods, a terminal operator can consider having peak season surcharges, like those applied by shipping lines with peak season surcharges to their customers.
Structural congestion is caused by chronic underinvestment by the terminal operator. For this type of congestion, shipping lines are not eager to pay more since capacity supply lags behind demand. Shipping lines will then start to consider imposing congestion surcharges and not peak season surcharges on their customers. This is a situation that should be avoided.

D. Gain-sharing incentives

A gain-sharing program consists of a documented and agreed project plan to reduce costs at the terminal or the shipping line with the assistance of both parties. Examples include:

A change of schedule windows reducing terminal personnel in-hire.
Improving schedule window reliability.
Improving cargo distribution over the vessel, allowing for higher berth performances.
Arranging additional equipment for improving flexibility.

In the gain-sharing program, the financial effects should be determined. Cost reductions should be shared between the terminal and the line. This can be a simple 50/50 on cost reductions related to the actual cost of the improvement. Gain-sharing requires mutual trust in the relevant calculations and discussions on establishing and measuring the cost reductions.

5. Port Pricing by Port Authorities

A. General considerations

Landlord port authorities provide infrastructural and other services mainly to three groups of port users; the cargo owner, the shipowner/operator, and the concessionaires (if applicable). The typical revenues of a landlord port authority are directly linked to the benefits created for cargo owners, shipowners, and concessionaires, such as cargo dues, marine charges, and concession/land fees. The cargo dues and marine charges combined form the port dues.

In setting the prices for the port dues and land fees, port authorities might follow different objectives:

Macro-economic, such as to support the economic development of the region or maximize port employment.
Economic-logistic, such as to insert the port in supply chains in an efficient manner.
Port-centric, such as to guarantee a high utilization of port resources and assets.
Financial, such as to build up financial reserves for future investments and/or cushioning the port against unexpected falls in revenue or rises in costs.
Sustainability, such as to support green supply chain management and energy transition.

There are some general factors to consider when designing and implementing pricing systems:

The pricing structure (number of charges, type of charges, charging base) of a port should be designed to last for many years, although each port charge level may be modified as conditions change. It is a complex procedure for a port to change its pricing structure, and too frequent changes may be a source of confusion for port users. Simple pricing systems may interfere with the achievement of the pricing objectives.
The pricing system should, ideally, be cheap to build and operate. The charging base should also rely on measures or data that can be accurately determined and easily provided by the customers. For example, the traditional charging units for ships (as a basis for marine charges) are the gross tonnage (GT) or net tonnage (NT) of the vessels, as this information is readily available and supported by official ship measurement documentation.
Pricing systems should be understandable and ideally comparable between ports. In practice, there is still quite some diversity in the various pricing systems and bases for calculating port charges throughout the world, hampering comparisons and benchmarking. In some parts of the world, supranational institutions (such as the EU) or national authorities have endorsed strict rules or general guiding principles for pricing by port authorities. These include common methods of calculating charges with tariff levels left to the discretion of the local port authorities.
Port authorities should clearly explain each charge, specifying which services are included and which are excluded. Many port authorities have developed tariff books with a view to providing (public) access to the pricing system used and its components.

B. Port dues

Shipowners or operators have to pay port dues when calling at a port and staying in the port. There are different types of port dues, such as marine charges and cargo dues.

Tonnage dues or marine charges are indivisible charges calculated on the basis of the ship’s tonnage.

The basis for calculating marine charges can be the gross tonnage (GT) or net tonnage (NT) of the vessel. However, it is also possible to use other ship measurements, such as the deadweight tonnage (DWT). In order to determine the marine charges, the ship operator, the shipowner, the charterer, the master, or the authorized representative must submit the vessel’s international tonnage certificate when the vessel calls the port for the first time or when changes in the ship’s measurement occur. Payment of the marine charges entitles the vessel to stay at the port for an uninterrupted period (for example, ten or 20 days) from the day of arrival at the port. Upon expiry of that period, additional marine charges will be due. The time a vessel spends in a dry dock is usually excluded from the official port time.

The marine charges to be paid per GT or NT can vary, and discounts might apply:

The charges may vary per ship type and, occasionally, also per ship size. For example, several ports apply lower marine charges per capacity unit for container feeder vessels compared to mainline container vessels. The tariff setting for specific ship types and sizes is influenced by the level of competition exerted by competing ports for accommodating the same vessel class.
It is quite common to have different marine charges for liner ships (i.e. vessels operating in regular liner shipping services) and vessels operating in non-liner trade.
Discounts might apply to shipping lines that exceed a certain threshold in terms of the number of vessel calls (frequency-based discount), or the ship-related cargo volume handled in the port (traffic-based discount) per time period (seasonality discount).
Many ports have developed voluntary programs to promote green shipping. Within the framework of such programs, the port authority usually grants a discount on the marine charges for ships that meet certain minimum environmental standards. A good example of such a voluntary program is the Environmental Ship Index (ESI).
Reduced marine charges or discounts might apply to sea-going vessels entering the port for a short period solely for non-terminal uses such as bunkering, repair, or disinfection purposes, sea-going vessels entering the port because of perils at sea, or vessels entering the port exclusively for transit purposes when a ship passes through a port to reach another port upstream.

port_cost_components | Port Economics, Management and Policy — Port Cost Components and Total Port Pricing per TEU USD 2012

The port authority might decide to exempt some vessel types from paying marine charges. Training ships, naval ships, sea-going vessels that remain inactive at the roadstead, sea-going vessels that call into port solely for tank cleaning and/or degassing purposes, and sea-going vessels involved in operations on behalf of the port city or other local or national government agencies typically fall into this category.

Cargo dues, berthing dues, or wharfage dues are indivisible charges calculated based on the goods unloaded or loaded by the vessel in port, expressed in tons.

The calculation of the cargo dues is based on the number of loaded or unloaded tons as reported on the manifest and registry. Port authorities usually charge a different tariff depending on the type of cargo. For example, separate cargo dues per ton might be applicable for containers, non-containerized general cargo, and bulk cargo.

The total port costs for the port user are not limited to the port dues collected by the port authority. Other major cost factors linked to a port call include:

Costs associated with ship cargo handling at a terminal. The terminal operator collects these cargo handling fees, tariffs, or costs.
Costs paid by the shipping line for compulsory marine and nautical services such as pilotage, berthing, and towage (tug assistance). These costs are usually incurred when entering and leaving the port and based on vessel size. Depending on the port, these types of services are offered by the central or local government, the port authority, and one or more private companies.
Most ports also have separate charges for waste reception at port reception facilities. These can be fixed, floating, or mobile facilities that carry out the reception of waste or cargo residues, such as remnants of any cargo material on board in cargo holds or tanks). Shipping wastes include oily waste such as sludge, bilge water, and used engine oil, as well as garbage such as food waste from the crew, domestic waste, and maintenance waste from the engine room. Regulations are in place to deal with waste reception in ports. For example, in accordance with Directive 2000/59/EC of the European Parliament and of the Council of 27 November 2000 on port reception facilities, all vessels calling at a port of the European Union should deliver their waste to a port reception facility before leaving the port (unless there is sufficient storage capacity onboard) and have to pay a waste fee.

C. Port concessions/land fees

The port authority or government can set the fees and the fee structure for port land concessioned or leased to terminal operators and other companies active in the port area. On the one hand, port users demand a transparent, uniform, and stable fee system. Such stability of the fee structure is essential in view of the investment decisions of the terminal operator. On the other hand, port authorities are tempted to apply the market mechanism in setting the fees for the use of valuable port land.

The pricing system deployed by the managing body of the port for the use of port land tends to vary widely among ports. The options available include:

The managing body of the port imposes a fixed rent per year on the operator for the land surface in use, such as per square meter per year. This rent is usually determined on the basis of used footprint, infrastructure investments made by the port authority, location of the site, and activities that are performed on-site.
A lump sum to be paid annually regardless of the financial results from the operating activity plus a variable payment.
A fixed rent per year on the land area plus a percentage of the revenue earned (royalty fee).
A fixed rent for the land surface in use adjusted for an incentive/penalty system, depending on an annual throughput or activity in relation to the guaranteed volume/activity.

Concession fees can change based on a substantiated review and are typically adjusted annually in line with inflation. Payments are to be made in advance every month, quarter, or year.

Concession Fees and Financial Flows of Port Authorities and Terminal Operators | Port Economics, Management and Policy — Concession fees as part of the financial flows of port authority and terminal operator

6. Structures of Port Charges

A. Charges at Container Terminals

Several different tariffs apply at each container terminal. Terminal handling rates for the ship to shore works include different charges for:

Unloading a container, such as discharging a container from the vessel, move a container from the wharf to the container yard and subsequently loading onto a chassis.
Uploading a container, such as lifting a container from a chassis to the container yard and subsequently moving the container to the wharf and loading onto the vessel.

Depending on the port, the loading/uploading charge might differ between import and export containers. The charges vary per container size, with the 20-foot containers charged differently from 40-foot containers or high cube 40-foot containers. They also vary depending on whether the container is fully loaded or empty.

Different charges apply to transshipment services, with a cargo handling fee applying for the discharge of the transshipment container from the inbound vessel, the move of the container from the wharf to the container yard, the move of the transshipment container from the container yard to the wharf and loading onto the outbound vessel.

A surcharge is imposed for handling containers, including dangerous goods demanding extra safety measures. Further surcharges apply in the case of specific containers containing cargoes demanding extra care, such as those classified as IMO containers, including mass explosion hazards, explosives with projection hazards, or radioactive substances, which demand the use of qualified handling personnel.

Additional charges also apply:

When an empty or fully loaded container is received from the chassis and is not shipped but subsequently delivered back to the chassis.
For late container arrivals.
For the movement of a container from the container yard for inspections, such as by customs, or for health or agricultural reasons.
When an empty or fully loaded container is received, but subsequently shipped via another vessel.
For any additional container movements not stated above, extra movement charges are levied.

Onboard shifting of containers involves additional charges as well. They include distinctive categories for:

Hatch cover handling, such as opening and closing hatches and lifting of hatch covers and lids.
Container shifts, such as landing and subsequently reshipping container on the same vessel and shifting of containers from one location on the vessel to another.

Beyond terminal cargo handling fees, a container terminal user pays charges for acquiring storage rights within the port terminal area. The user is also charged for landside operations. Both fully loaded containers and empties have a certain number of days of free storage at the container yard, calculated from the date containers are stacked in the yard to the date the containers are removed from it. The size of the container and its direction, whether it is imported or exported, imply different charges. Thereafter, stacked containers carry a storage charge, which increases as the containers remain in the yard. Surcharges on storage services apply in the case of specialized container handling, such as refrigerated containers.

All transshipment containers also have a certain number of days of free storage, which are also calculated from the date containers are stacked in the yard to the date the containers are loaded. After that day, storage charges are similar to the charges for fully loaded containers. A different charge applies to landslide operations. These include dues for vehicles arriving at the terminal for picking or delivering containers and surcharges applying for landslide operations. These charges depend on the length of the vehicle stay and commonly differ between weekdays and weekends.

container_cargo_handling_charges | Port Economics, Management and Policy — Container Terminal Cargo Handling Charges

container_cargo_storage_charges | Port Economics, Management and Policy — Container Terminal Cargo Handling Charges

In addition, container terminal users pay port dues for maritime services, and potentially for the use of other utilities, with these dues defined by the managing body.

B. Cruise terminals

A variety of fees are charged regularly in cruise ports. In addition to the different tariffs applied at cruise terminals for either maritime or land-side services, fees can be levied for waste disposal and supplies. Port fees increase with the ship size and differ depending on the type of call, with the fees for a transit cruise call approximately half the port fees for a turnaround call, regardless of ship size.

A cruise passenger fee is imposed for transit as well as homeport passengers, but, in the latter case, the fee is higher. Passengers (dis)embarkation is also subject to other fees, such as the passenger security fee to use the International Ship and Port Facility Security (ISPS) Code provisions. This charge is usually a fixed rate per cruise passenger embarking, disembarking, or transiting through the cruise port. Apart from the charges mentioned above, there are also charges based on providing specific port services, such as bunkering, provision of water and electricity to the cruise ship, and cruise ship supplies. When levied, the compulsory fees include passenger fees, port dues, fees for mooring and unmooring, dockage/anchorage fees, navigation dues, tender fees, and passenger luggage storage. Other fees are applicable in some ports, including chamber of shipping/commerce fees, gangway fees, immigration fees, navigation dues, passenger luggage storage fees, shuttle bus services, tenders, and crew fees, as well as customs/clearance, and sanitary dues. Ports typically apply discount policies for cruise ships and passengers as a promotion tool for attracting cruise traffic. These discounts are based on the number of passengers per year or the number of cruise ship calls.

The ratio of cost components of port fees differs for transit and turnaround calls. The main difference is that fees for passenger luggage handling are only levied for turnaround calls. This also creates differences in the ratio of other cost components between transit and turnaround calls since passenger fees need to be paid twice for turnaround calls. For transit calls, passenger fees are, on average, substantially higher in large ports than in small ports. This difference decreases with an increase in ship size. Also, for turnaround calls, passenger fees are, on average, substantially higher in large ports than in small ports. However, for small and medium-sized ships, passenger fees are similar or higher in smaller ports.

A fee for pilotage is frequently compulsory. The percentage for which a fee for pilotage is compulsory increases slightly with the ship size. Similarly, a fee for tug/towage is compulsory in many ports and increases slightly with ship size, except for mega-ships. In some ports, the fee for tug/towage is fixed and independent of the ship size. Therefore, these cost components have a relatively more significant share in the total port fees for smaller ships than they do for larger ships. This also involves variable cost components (like passenger fees), which have a relatively smaller share in the total port fees of smaller ships than they do in larger ships.

There are differences in port fees applied in cruise ports between weekdays and weekends. Some ports levy higher costs on the weekend for cost components involving overtime labor costs.

Chapter 9.4 – Port Pricing

Authors: Dr. Theo Notteboom and Dr. Athanasios Pallis

1. Port Pricing Strategies

2. Pricing and Asset Utilization

3. Pricing and Customer Management

4. Price Incentives for Port Customers

A. Volume incentives

B. Service incentives

C. Utilization incentives

D. Gain-sharing incentives

5. Port Pricing by Port Authorities

A. General considerations

B. Port dues

C. Port concessions/land fees

6. Structures of Port Charges

A. Charges at Container Terminals

B. Cruise terminals

Related Topics

References

Authors: Dr. Theo Notteboom and Dr. Athanasios Pallis

1. Port Pricing Strategies

2. Pricing and Asset Utilization

3. Pricing and Customer Management

4. Price Incentives for Port Customers

A. Volume incentives

B. Service incentives

C. Utilization incentives

D. Gain-sharing incentives

5. Port Pricing by Port Authorities

A. General considerations

B. Port dues

C. Port concessions/land fees

6. Structures of Port Charges

A. Charges at Container Terminals

B. Cruise terminals

Related Topics

References

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