CHAPTER 9

1. CHAPTER 9 PORT TARIFFS

2. 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%.

3. FACTORS INFLUENCING THE LEVEL OF PORT TARIFFS • Competition in its many forms • Location of competing port • Quality and ancillary services • Use of discount rates, usually based in traffic volume • 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.

4. FACTORS INFLUENCING THE LEVEL OF PORT TARIFFS • 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. • 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

5. FACTORS INFLUENCING THE LEVEL OF PORT TARIFFS • Special facilities to handle goods • Wide range of facilities – influence cost and tariffs. • Investment & maintenance cost will be reflected in dues • 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.

6. FACTORS INFLUENCING THE LEVEL OF PORT TARIFFS • Exchange rate variations • Exchange rate which are weak can attract traffic against those which are strong. • Important factor in formulating tariff to remain competitive. • 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.

7. FACTORS INFLUENCING THE LEVEL OF PORT TARIFFS • Statutory controls & subsidies • State-owned port – government control level of charges. • State subsidies to ensure tariff remain competitive. • 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.

8. FACTORS INFLUENCING THE LEVEL OF PORT TARIFFS • Marketing • Intense competition – more promotion of product & service. • Encourage negotiated rates, based on volume and commitment / loyalty to port. • Others • Value of goods. • Ease of handling and storage. • Custom requirements. • Fragility or awkwardly shaped cargo.

9. 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.

10. 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.

11. 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.

12. SHIP DUES EXAMPLE

13. 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

14. 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

15. 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.

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

17. 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

18. TYPES OF GOODS DUE

19. TYPES OF GOODS DUE

20. TYPES OF GOODS DUE

21. 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.

22. 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

23. MISCELLANEOUS CHARGES • 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.

24. MISCELLANEOUS CHARGES • 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 • Pilotage and tugboat charges – Based on GRT of ships • Cargo palletizing service – Use of mechanical appliances or machinery for palletizing and strapping cargo on pallets • Removal of refuse from port authority premises

25. MISCELLANEOUS CHARGES • Fire service – Most port have fire fighting vessels. Charged only when used. • Police, Security guards service – Charged on per hour basis. • Anchorage dues – Charged on ship lying at anchor (lay up berth). Per day and per ton. • Fresh water supply