Port charge

Port charge
See also
Accessorial charges Substandard risk Sole distributor Letter of agreement Variable overhead efficiency variance Consignment sale Stacking height Committed cost Fund supermarket

Port charge is a sum of any taxes and extra charges which occur, when a ship reaches the port. Fee may be applied to a ship itself, but also a cargo. Requiring of high levies might have an effect in decreasing the number of ships and goods arriving to the port.

Components

There are many different charges which may be components of a port charge, most common are:

• tunnage fee - charged for arriving and leaving a port, but also sailing across it and waste management, in compliance with the policy of the specific port,
• harbour fee - charged for using the berth, usually price is set for one day and increases proportionately,
• passenger fee - charged for every passenger, who comes in or out of a ship.

Methods of payment

The companies do not have to pay a port charge by themselves. There are lots of organisations located around ports which specialise in terms and conditions of every single fee. If the company needs to organise a tour through many ports, this kind of organisation might be helpful. However, there is one problem about this method, and it is related with responsibility. If the firm, as a seller, organise the whole transport by itself, and care about the cargo from its' store to the buyer's port - company knows, that everything will be paid on time, cargo will not be lost somewhere - for example in any other port, where it should never appear, but the there is a possibility, that total sum od port charges will be higher, and certainly all of procedures will take a lot of time and stress Meanwhile, it the firm will sign a contract with one of the transport companies, it will save time, but if anything bad will happen, like if the transport company omits one of charges - the whole ship is detained in the harbour, and has to pay for every day of delay. One of recommended techniques is to stay in continued contact with both buyer and transport company. And what is even more important read and sign the profitable agreement noticing facts about responsibility in case of any unforeseen circumstances.

GRP

As in every economy branch, shipping transport has some important and specific expressions. The most common one is GRP which is "Gross register tonnage". Majority of ports use this measurement unit and charge ships due to it. GRP include the whole volume of a ship, while there is also NT (Net Tonnage) which include only passangers and the cargo - usually located in shipping containers . There is a simple method to count GT of a specific ship, unfortunatelly even it has some disadvantages - it cannot be used for ships in nonstandard shapes, machine factors and types. Calculation method is:

$GT={\frac {TL*TB*TD*0,8}{2,83}}$ Where:

• TL - is a length of a shipping unit
• TB - is a maximum width of a shipping unit
• TD - is a lateral height of a shipping unit

Examples of Port charge

• Pilotage Fees: This fee is paid by a ship to a local pilot upon entering or leaving a port. The pilot is responsible for helping the ship to navigate safely through the busy waters.
• Berthing Fees: This fee is paid by a ship upon entering a port. This fee covers the cost of using the port's infrastructure and services, such as dock space, fuel, and waste disposal.
• Mooring Fees: This fee is paid by a ship for the use of mooring lines and buoys that help keep the ship in place when it is docked.
• Tugboat Fees: This fee is paid by a ship for the use of tugboats, which help to maneuver large vessels in and out of the port.
• Cargo Fees: This fee is paid by a ship for the loading and unloading of cargo. This fee covers the cost of using the port's cranes, longshoremen, and other services.
• Security Fees: This fee is paid by a ship for the use of security services provided by the port. This includes armed guards, surveillance cameras, and other measures to ensure safety and security.
• Waste Disposal Fees: This fee is paid by a ship for the disposal of waste generated by the ship while it is docked. This includes garbage, sewage, and any other hazardous materials.

Advantages of Port charge

Port charge serves an important role in the economy, as it allows for the efficient management of the port and its resources. Below are some of the advantages of port charge:

• Ensures better management of port resources. By charging fees for ships and cargo entering the port, it is possible to ensure that the port is adequately equipped to handle the influx of vessels and goods. It also encourages efficiency, as the fees will incentivize ships to arrive on time and leave quickly. This helps to reduce congestion at the port and allows for a smoother flow of traffic.
• Provides a source of revenue for the port. The fees collected from ships and cargo entering the port are a valuable source of revenue for the port. This money is used for the upkeep of the port and the maintenance of its facilities, which in turn helps to ensure that the port remains a viable business.
• Encourages trade and economic growth. By providing a source of income, the port charge helps to encourage trade and economic growth in the region. This is because ships and cargo entering the port are typically bringing goods or services into the area, which can have a positive impact on the local economy. Furthermore, the fees collected from the port can be used to invest in the port infrastructure, which can help to attract more ships and goods to the area.

Limitations of Port charge

Port charges can be a great source of revenue for a port, but there are several limitations which should be taken into consideration. These include:

• Unpredictability: It can be difficult to predict the amount of port charges that will be collected in a given period, as the number of ships and cargo that come in can fluctuate unpredictably. This can lead to a lack of budgeting or planning in terms of revenue.
• Fluctuation: The amount of port charges can often vary depending on the size of the ships, the size of the cargo, and any additional taxes or fees that must be paid. This can cause a great deal of financial volatility as the payments can change drastically from one period to the next.
• Administrative Burden: Managing and collecting port charges can be a very time-consuming and complex process, as there are often several different types of taxes and fees that must be taken into account. This can create a significant administrative burden for the port.
• Legal Issues: There are often many legal issues that must be taken into consideration when it comes to port charges, as there are often specific laws and regulations that must be adhered to in order to ensure compliance. This can create a great deal of legal complexity and can be difficult to manage.

Other approaches related to Port charge

In order to understand and address port charges, it is important to look at other approaches related to this topic. These approaches can be divided into three main categories: regulations, infrastructure, and services.

• Regulations: This approach focuses on the laws and regulations governing port charges, which can help set a fairer pricing structure that is beneficial to both ship owners and the ports. This includes improving transparency regulations and making sure that fees are applied consistently.
• Infrastructure: Infrastructure is also a key factor when it comes to port charges. Ports should invest in improving their infrastructure such as harbors, docks, and other facilities to make it easier for ships to access them and reduce the cost of port charges.
• Services: Finally, ports should consider offering additional services to ships to make them more attractive and competitive. These services could include providing fuel, food, and even medical services, which would help reduce the cost of port charges.

In conclusion, understanding and addressing port charges requires looking at approaches such as regulations, infrastructure, and services. These approaches can help ports become more competitive and set fairer pricing structures that are beneficial to both ship owners and the ports.

References

• Brodie P., (2013). Dictionary of shipping terms. "Informa Law". ISBN: 978-0-20336-201-3, 19.
• Galal E. H., (2015). Triple e- vessels: tonnage measurement and suez canals dues assessment. "Journal of Renewable Energy and Sustainable Development (RESD)". June 2015, ISSN 2356-8569, 186-188.
• Nursal R. S., (2008). Tonnage measurement for fishing vessel in Malaysia. "The degree of Bachelor of Engineering". 1-2.
• Talley W. K., (2007). Financing Port Dredging Costs: Taxes versus User Fees. "Penn State University Press". V. 46, No. 3, 53-58.

Author: Anna Wlodarczyk