Agenda

UNDERSTANDING PRICING: THE STRATEGIC ELEMENTS

• Objectives of Port Pricing (user and port perspectives)
• Types of Port Administrative Structures
• Port Management Models, its impact on service providers. on Port
• Pricing
• ROI and conflict with other port objectives
• Difficulties of accurately measuring Port costs

PORT PRICING: WHAT USERS AND OPERATORS NEED TO KNOW

• Port Pricing Constraints
• Port Pricing Concepts and Strategies
• User perception of port pricing and the conflicts of interest with port
• objectives
• Port Dues vs Port Charges:
  • What would shipping agents and/or shippers or consignees pay
• and what services are derived from these dues and tariffs
  • Published vs Negotiated Prices
• Monopoly and Oligopoly Pricing
• Regulatory Strategies to Control Pricing

PRICING TECHNIQUES IN PORT MARKETING

• How Ports Calculate Pricing
  • Economic approach pricing: marginal and average cost pricing
  • Cost based pricing
  • Monopoly and Oligopoly Pricing
• Incentive/Disincentive based Pricing for Efficiency and Effectiveness
  • Incentive Pricing for Term Contracts
  • Discriminatory Pricing
  • Multi-tariff Pricing;
  • Traffic Congestion/Slot Auction Pricing
  • Operational performance-based pricing
• Port Tariff Benchmarking to determine competitiveness of the Port

Class Exercise:

Computation of marine charges at some regional ports, analysing the competitiveness of the ports illustrated and followed by a discussion on port competitiveness, issues in port pricing etc.

Class Discussion:

Port price benchmarking is a difficult process. A discussion will be conducted on what how ports deal with this.

UNDERSTANDING PORT COSTS AND HOW IT IMPACTS PORT USERS

• Nature of Port Costs
• Types of Port Costs: Specific, General, Fixed, Variable
• Calculation of Port Costs: issues involved
• Difficulties Associated with Port Cost Allocation: Specific, General and
• Shared Facilities
• Factors affecting Cost per Tonne/TEU Computation
• Examining measures to reduce or minimize Cost: Energy, IT, Design of
• Infrastructure, Use of Automation and illustration of actual impact

Class Exercise: Participants will use their own test data. They will be provided with the guidelines on what data to provide for this exercise. This exercise will test participants application of what has been learnt under the modules of Pricing and Cost.

PORT UTILISATION AND PRICING Effective and efficient performance of the port affects port facilities utilization, operating efficiency, effectiveness of services provision and the cost of port operations. This ultimately affects Port pricing and its competitiveness. We will look at

• Choice of quay and yard equipment
• Calculation of stack area
• Calculation of dwell times
• Calculation of ships turnaround time
• Operational port performance and its impact on port capacity/efficiency
• Other procedural arrangements impacting port lessees and/operator

Class Exercise:

Exercises and illustrations how these critical areas impact on port capacity. Participants will be required to propose pricing strategies that can be applied to improve port efficiency.

ISSUES WITH PORT PRICING AND GROWTH MANAGEMENT

• Examining differences between Dedicated vs Common user berth
• terms and pricing for port services and areas of concern with
• dedicated berths
• Overview of current market trends impacting Ports and their future
• development
• Types of Growth: Internal and External
• Growing the slew of Port Services by Port Operator and/or in
• collaboration with port users
• Factors to consider in Planning for Internal and External Expansion
• Capacity Planning Management
• Can the current capacity be used?
• Do you require new facilities?
• Traffic forecasting:
  • How do you forecast future cargo growth?
  • Methodologies involved
• Which methodology to use to ensure a greater accuracy in forecasting?
• How do you mitigate the risks in adopting future cargo forecast?
• How do you go about planning for the future?
• Planning for long-term port demand and requirements
• Challenges you will face
• Support on investment decisions
• Means of Financing Port Expansion