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Pricing of transhipment by port authorities

COMMENT: How can pricing structures in ports be best explained; are they based on a specific historical trajectory in each port, or based on economic logic, asks Peter de Langen.
The variety of pricing structures is huge. For instance, a substantial amount of charges are paid by shippers in South Africa, contrary to most other countries. In Singapore, virtually all revenues come from port dues and virtually none from land rents in ports or charges to shippers. The opposite is true in many US and Canadian ports; here, the majority of revenues are from land lease agreements. This suggests that ‘history’ may be an important factor.
Prices may traditionally be designed from an administrative logic, and in some cases even be perceived as a kind of tax rather than as a price for a service. In such an environment, huge differences in pricing structures can persist.
The recovery of a certain range of costs (operational and to some extent investment) may often be the most important objective. This implies pricing may not always be based on economic logic. In such cases, changing pricing structures may be attractive.
This issue is relevant for port authorities looking to price transhipment flows. The administrative logic would regard ‘a ship as a ship’ and not price ships differently based on whether the cargo they carry is transhipped in the port.
From an economic or commercial logic, it may make sense to differentiate prices with the lowest price offered to the most price sensitive market segment. In many ports, transhipment cargo (containers, but also crude oil and even dry bulk) is the most price sensitive cargo flow. Furthermore, transhipment flows generate ‘double’ port dues because they move in and out by ship.
Thus, special pricing for transhipment seems worthwhile. Indeed, various port authorities have such special prices for transhipment. As a reference, most airports also have lower prices for transit passengers.
Two questions remain: why haven’t all port authorities developed such pricing structures? And for those port authorities that have special prices for transhipment, have they ‘tweaked’ historically developed pricing structures or have they really taken a fresh look at port pricing?

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