Port Planning Pricing Tariff


Published on

Published in: Business, Economy & Finance
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Port Planning Pricing Tariff

  1. 1. 1. Efficient allocation of port facilities 2. Improvement of services and expansion of facilities 3. Introduction of optimal tariff policy from owner, operator, or user point of view 4. Support for development of domestic shipping 5. Encouragement of trade in specific imports or exports and/or specific ship types in the national, regional, or local interest 6. Efficient allocation of cargo within a multi port system 7. Efficient allocation of cargo between modes 8. Maximization of local, regional, and/or national income 9. Optimum financial strategy to meet financial obligations toward lenders, owners, national, local, or regional communities or combination thereof 10. Maximum total net utility 11. Income distribution 12. Cost reimbursement
  2. 2. 1. Meeting the financial costs of the port including the cost of debt servicing. 2. Attainment of a specific or maximum achievable return on the assets employed by the port. 3. Achievement of cash flows that are sustainable and minimize shortterm borrowings. 4.Reserve accumulation to meet contingency, facility maintenance, technical improvement, and capacity enhancement requirements. 5.Promotion of facility use to assure effective (balanced) utilization of port assets.
  3. 3. 1. Port operations performance 2. Port cost structure and finances 3. Port user costs and the alternatives available to port users. 4. Cost at competing ports
  4. 4. By assessment, we have: Ship owner/Operator Shipper/Receiver/Cargo Owner 1. Navigation fees 2. Tonnage taxes 3. Dockage 4. Launch hire 5. Mooring/unmooring 6. Pilotage 7. Towage 8. Water 1. Load/unloading 2. Cranage ($/hr) 3. Stevedoring ($/hr) 4. Storage 5. Wharfage/ demmurrage Function of: Ship Characteristics Cargo Characteristics 1. Tonnage taxes ($/nrt) 2. Dockage ($/ton/day) 3. Mooring/unmooring ($) 4. Pilotage ($/draft) 5. Towage ($/tug) 1. Loading/unloading ($/ton) 2. Cranage ($/hr) 3. Stevedoring ($/hr) 4. Stprage ($/ton) 5. Wharfage ($/ton)
  5. 5. 1. Economic Approach- This usually implies the use of marginal cost pricing . (assumes use of marginal cost pricing in all related transport activities). Average costs are only equal to marginal costs when the port operates near capacity, below that level of operation marginal costs are well under average costs. 2. Financial Approach- This is usually recovery of fixed and variable costs plus adequate return on investment and working capital employee, generally consistent with an average cost pricing approach. 3. Impact Pricing Approach- This is usually based on the impact on: a. A regional- national development b. An existing level and distribution of economic activity c. A national economic policy including a policy toward redistribution of wealth d Some financial resources of government and ability to provide subsidies of alternatively to reinvest profits e. An impact of services on users and others and the resulting value of service to users 4. Incentive Pricing.- This usually base on the tariff requirements that will attract users. who are capable of efficiently using port resources. It is generally designed to encourage efficient use of r sources, technological improvement, and increased productivity, and often designed to assure marginal ability to pay at accrued benefit pricing.
  6. 6. 1. 2. 3. 4. 5. The formulation of goals The development of pricing strategies The accounting for the costs to the port of providing resources and services. The determination of the productivity of port resources in performing different activities. The estimation of costs to port users and the effects of competition on the demand for port services.
  7. 7. Formulation of goals Preparation of strategies Performance analysis by activity Forecast demand Cost analysis by activity Revision of tariff items Related to fixed costs Financial analysis Revision of tariff items Related to variable costs Analysis of costs To port users Comparative tariff analysis Marketing analysis Revision of demand forecast Revision of tariffs Developed tariff formulation process
  8. 8.  They demand on port ownership, port control. port development, the role of the port, and more. The most common port investment objective is probably “economic efficiency”, which can be expressed or measured in terms of the following1.Discounted net national, regional, or local benefits such as income generated by particular port investment alternatives. 2.Transportation cost savings, and the resulting impact on transportation costs of trade and services. 3.Indirect economic benefits including secondary and multiplied effects. 4. Impact on direct and indirect employment or unemployment 5. Impact on local, regional, or national economic growth.
  9. 9. Equity objectives are usually much harder to measure than economic efficiency because it is often difficult to define regions or classes and to measure equity. Another objective of increasing importance can be defined as the environment quality objective, which is usually measured in terms of the percent change in environmental quality parameters such as: 1. Air, water, noise (etc.) pollution 2. Aesthetics 3. Impact on recreational opportunities 4. Safety (employees, users, community) 5. Transportation 6. Flexibility to respond to changing requirements 7. Growth 8. Community acceptance
  10. 10. 1. Minimizing ship turnaround tune in port 2. Maximization of port facility and resource utilization 3. Maximization of port throughput in terms of ship and cargo traffic 4. Minimization of port costs per unit throughput or per unit time 5. Maximization of port surplus (profit) 6. Minimization of port investment risk 7. Maximization of port employment 8. Minimum impact of regional (national) trade competitiveness
  11. 11.  Statement of investment objective  Definition of measure of investment success  Description or modeling of investment alternatives  Investment analysis model  Investment evaluation model
  12. 12. 1. Standard benefit/cost analysis including internal rate of return or net present value methods in which financial and economic benefits and costs of the investment are compared. 2. General consumer surplus or consumer utility analysis in which we assume, that the public has a diminishing marginal utility for benefits arising from investment in projects. Consumer surplus is defined here as the difference between the amount the public is willing to pay and actual cost. 3.Maximization of the expected value of utility of an alternative investment chosen from among a choice of investments.
  13. 13. 1. A set of available alternative investments decisions. 2. The status and possible actions of competing ports. 3.Empirical and subjective data from observation estimates subjective - judgments, surveys, and the like. 4.Performance of alternatives in terms of capacity, service, revenues, costs, benefits, or outcomes resulting from selections from among the alternatives. 5.Sets of decision strategies including constraints or limits or limits in both range, number of decisions, and sequence of decisions. 6.Objectives or criteria for effective decision making, as either a quantifiable criterion such as maximum profit or benefit or maximum utility. The objective may also be conditional or it may itself contain uncertainty
  14. 14. 1. Competitive 2. Adversity and other factors relating to opposition 3. Technological 4. Human relation 5. Political and regulatory 6. Market 7. National and international relations 8. Resource availability
  15. 15. 1. Function Variables such as:  Port functions  Port capabilities  Port jurisdiction  Port service and labor agreements 2. Structural Variables such as: .  Departments  Services provided 3. Environmental Variables such as: External.  Local, national, and internal regulation including rate regulation  Community requirements  Agency and other ruling Internal  Union contracts  Service agreements
  16. 16. 4. Competition Variables such as:  Competing ports and services  Competing rates and capacities 5. Market Variables such as:  Economic development  Export competitiveness 6. Macro environmental Variables such as:  Macroeconomic conditions  Social trends  Political trends  Legal developments 7. Resource Variables such as:  Staff availability and training  Staff relations  Budget  Credit lines  Data bank  Decision quality
  17. 17.  Port ownership – public or private  Port’s current and future development and investment     strategy Size of the investment required Expected return from port capital investment and the debt capacity the port can carry. Expected growth rate in port demand and associated uncertainty and risk. Costs and benefits, terms and provision of available financing methods and their relative effect on the degree of control of port management over its operations.
  18. 18. 1. 2. 3. 4. 5. 6. 7. 8. Internal rate of return (IRR) Net present value (NPV) Pay back period (PP) Accounting rate of return (ARR) Capital recovery factor (CRF) Minimum average annual coat (AAC) Present Worth (PW) Equated interest rate of return (EIRR)