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Port Pricing: Principles, Structure and Models

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Abstract

Price level and price transparency are input to shippers’ choice of supply chain and transport mode. In this paper, we analyse current port pricing structures in the light of the pricing literature and consider opportunities for improvement. We present a detailed overview of pricing criteria, who sets prices and who ultimately foots the bill for port-of-call charges, cargo-handling fees and congestion charges. Current port pricing practice is based on a rather linear structure and fails to incorporate modern pricing tools such as price differentiation or revenue management. Consequently, ports apply neither profit maximising pricing nor pricing designed to exploit available capacity more efficiently.

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  • Meersman, Hilde & Strandenes, Siri Pettersen & Van de Voorde, Eddy, 2014. "Port Pricing: Principles, Structure and Models," Discussion Paper Series in Economics 14/2014, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2014_014
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    1. Fung, Michael K. & Cheng, Leonard K. & Qiu, Larry D., 2003. "The impact of terminal handling charges on overall shipping charges: an empirical study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(8), pages 703-716, October.
    2. Meersman, Hilde & Pauwels, Tom & Van de Voorde, Eddy & Vanelslander, Thierry, 2010. "Applying SMC pricing in PPPs for the maritime sector," Research in Transportation Economics, Elsevier, vol. 30(1), pages 87-101.
    3. David Hummels, 2007. "Transportation Costs and International Trade in the Second Era of Globalization," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 131-154, Summer.
    4. Peran van Reeven, 2010. "The Effect of Competition on Economic Rents in Seaports," Journal of Transport Economics and Policy, University of Bath, vol. 44(1), pages 79-92, January.
    5. F. Suykens & E. Van De Voorde, 1998. "A quarter a century of port management in Europe: objectives and tools," Maritime Policy & Management, Taylor & Francis Journals, vol. 25(3), pages 251-261, January.
    6. Chen, Xiaoming & Zhou, Xuesong & List, George F., 2011. "Using time-varying tolls to optimize truck arrivals at ports," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 965-982.
    7. Pettersen Strandenes, Siri & Wolfstetter, Elmar, 2005. "Efficient (re-)scheduling: An auction approach," Economics Letters, Elsevier, vol. 89(2), pages 187-192, November.
    8. Strandenes Siri Pettersen, 2004. "Port Pricing Structures and Ship Efficiency," Review of Network Economics, De Gruyter, vol. 3(2), pages 1-10, June.
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    1. Nestor Goicoechea & Luis María Abadie, 2021. "Optimal Slow Steaming Speed for Container Ships under the EU Emission Trading System," Energies, MDPI, vol. 14(22), pages 1-25, November.
    2. Nicole Adler & Georg Hirte & Shravana Kumar & Hans-Martin Niemeier, 2022. "The impact of specialization, ownership, competition and regulation on efficiency: a case study of Indian seaports," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(3), pages 507-536, September.

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    More about this item

    Keywords

    Infrastructure pricing; pricing models; seaports.;
    All these keywords.

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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