Port pricing : principles, structure and models

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.