Influential factors in seaport infrastructure pricing
Creators: name: Bandara, YMS
Publisher: name: University Of Tasmania
Year: 2023

description: This study concentrates on the pricing of seaport infrastructure which includes port charges on the use of access channels and berth facilities. A closer examination of published port tariffs reveals that the port entry and berth use-related port tariffs, often referred to as channel dues and berth occupancy charges, are differentiated based on vessel volume (Gross Tonnage, Gross Registered Tonnage and Length Over All), ship type (container ship, general cargo ship, tanker) and traffic type (foreign-going vessels and coastal vessels). These two charges are one of the main revenue sources for a port authority; however knowledge of the design and imposition of these charges is currently opaque, but nevertheless very useful to port users. This thesis explores the determinants of port infrastructure charges that underpin port pricing policies in world ports. The main objectives of the study are: (a) Identify and conduct an econometric analysis of the effect of various factors on seaport infrastructure charges. (b) To assess the applicability of competing pricing models (pricing approaches) currently used by seaports in different countries and regions in the world. (c) To assess the determinants of port infrastructure tariff design and practices in world seaports and discuss their implications for port management. This thesis brings to notice that, despite the discussion on port pricing theories such as cost-based, market based and cost-benefit theories, the empirical research on this topic remains very limited. Thus, with identified research gaps such as the determination of the level of knowledge that port authorities have in tariff design and their applicability, the thesis investigates the underlying factors influential to the design and practice of port infrastructure tariffs using both quantitative and qualitative research approaches. First, the determinants of port infrastructure charges are studied empirically using data from 159 ports worldwide by employing the ordinary least square and simultaneous equation system method with channel dues and berth occupancy charges as the dependent variables. The result indicates that the pricing of seaport infrastructure is primarily cost-based but other factors are also relevant to the port pricing models currently used by seaports. Among those factors in particular, demand and the type of port management and governance model have been found to significantly impact the level of port infrastructure charges. Second, to complement and triangulate some of the results found in the quantitative model, this thesis examines the primary data collected through an online survey of 67 international seaports to focus on the practical processes and strategic issues in infrastructure tariff design and practice. The questionnaire was sent to higher level seaport managers working in the areas of port tariffs. The contact details of port managers were obtained from the official port websites of respective port organisations. SPSS and AMOS statistical software were employed to analyse the data. Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used to identify the factors influential to the selection of infrastructure tariff models, the tariff level and the tariff revision process. The results showed that the influential factors in infrastructure tariff design are: a) demand, b) knowledge of pricing theories, c) pricing objectives, d) port cost considerations, and e) dynamics of port and shipping sectors (competition and ship size). Further, an analysis into the factors influential in infrastructure tariff practices of seaports suggested that tariff policies, transparency in tariff setting, tariff regulation and stakeholder participation in tariff affairs are highly significant. Third, the content analysis of two open-ended questions included in the questionnaire to seaport authorities revealed that tariff revision practices vary substantially across ports and regions in the world. Some ports revise tariffs regularly while others seldom do so. Furthermore tariff revision procedures and the parties involved in the process also vary across ports; some ports have highly bureaucratic procedures for tariff revision and others determine their tariff revision decisions independently. Many seaport authorities are not aware of all the basic pricing approaches and their applications, and expressed a wish to receive training and support in tariff design and revision. Based on the results of the quantitative and qualitative analysis, the implications for port management and governments are discussed and, given the exploratory nature of the study, the implications for future research and its limitations are also presented.