How to obtain discounts and rebates on port call costs

15% of voyage expenses can be taken up by port call related costs, therefore having reliable numbers and knowing how these costs are derived is extremely important for decision making.

The cost of calling at a port needs to be as accurate as possible for the chartering team to calculate voyage expenses.

How much costs can change depends on different variables which, if carefully assessed, support the risk analysis in taking cargo or not.

Port tariffs

Port tariffs can be complicated, and calculating them can be a time-consuming process.

Rarely will a port have a single source of information. Generally, it is a combination of port authority tariffs, various terminal-specific tariffs, and local supplier costs. In many areas, each service is operated independently of the port authority.

Towage is one of the largest port costs and suppliers often have different tug types, can use different rate structures, and have multiple surcharges.

It is extremely important that these costs are reviewed at a terminal or berth level, as there can be significant variation in costs between different terminals within a port. Then, there are the variances in tariff structures.

Tariff structures

Most ports operate one of four linear cost profiles for vessels – increasing costs proportionally in relation to the time spent at the port.

Alternatively, a port may increase costs significantly after a fixed period, or choose a more gradual approach to tariffs; increasing costs in steps (based on varying timescales).

Additionally, many ports offer rebates or discounts in return for regular calls.

In the tramp segment, it can be challenging to benefit from these due to the unpredictable nature of the trade, as well as the lack of visibility of the available discounts. However, if you anticipate repeated voyages, it can be a significant benefit to realise these discounts.

Increasingly we have seen more environmental discounts become available, which can be based on the vessel emissions, fuel type or speed.

Some are self-certified, and some are paid-for services with annual fees. However, not all port authorities participate, and those that do usually apply the discounts in different ways.

Often the discount is paid out retroactively and only upon a written request. As such, it is important to be informed of the applicable discounts and the process to claim them.

DA-Desk checks 1,800 rules, including applicable discounts and rebates for our customers

DA-Desk has over 2 million port calls as a reference, (adding 200k new per year) so we have visibility over the real costs. Coupled with our proprietary DA Validation Engine, which checks more than 1,800 rules, including all applicable discounts and rebates, we support our customers to get the accurate data they need and do not miss out on these achievable discounts. Read more on our dedicated DA management page.

Author:

Mark Franklin
Commercial Director, DA-Desk