It is defined as a policy of reducing the prices to attract customers towards a product. Kandla Port Trust (KPT) is one of the 12 major ports of India under the Ministry of Shipping, Govt. Based on all the above factors, the copy of the cost statement for the Port is placed at Annexure IX. Port should think ofworkingon the ‘normative costing’ principlewhere by standard costs and standard tariffscan be derived which could be bench-marked for pitchingthe right actual tariffs for each sub-activity and principal activity. This paper analyses the optimization of the pricing strategies between container terminals under deregulation. Rates of the pilotage charges of the nearby ports which were 82% higher than the Kandla Port’s rate justified 15% hike. Looking for a flexible role? Study for free with our range of university lectures! Cost based and investment based tariff aim at achieving the financial objectives whereas comparative and flexible and promotional tariff are suitable for achieving the market needs” (Cariou Handout 2010 p-16). Tariff rates are also made concessional and promotional if ashipper commits major volumes. Pricing – depends on the forces of supply & demand. The demand is also studied on the basis of size of the vessels handled at port (Annexure IV) based on the draft restrictions and future dredging plans of the port. al are also booked under different cost centres and then they are apportioned to all the sub-activities. Of course, coefficient of elasticity of tariff on traffic is to be found out to determine to what extent the tariff is to be reduced. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Do you have a 2:1 degree or higher? People also read lists articles that other readers of this article have read. Efforts are required to be concentrated in the areas where the potential savings are likely to bemaximum. Where facihties are more than adequate for needs, the proper utilization of assets No plagiarism, guaranteed! However, port further gives specific justification as below for the upward revision of tariff. Attempts are made in Kandla Port Trust to evaluatecost of each component of port operations. (Generally ports in India are in oligopoly market and coefficient of elasticity of tariff on traffic is less than one). RECEIVE UPDATES. With this strategy, the objective is to become the lowest-cost producer in the industry. Thus, special pricing for transhipment seems worthwhile. Responsibility Assignment Matrix (RAM) October 29, 2020 November 25, 2020. For the cargo handling activity however, it is observed that Port instead of giving flat 15% hike to the existing rates, used the proactive pricing by increasing the rate of those commodities in which port has monopoly in handling such as food grains, scrap, timber, salt and sugar and reducing the rates of the cargo such as ores & minerals, metals, oil cakes etc. It influences port competition, investment decisions, development strategy etc. Hence Port decided to recover only the short recovery/deficit of 286.40 millions (Annexure IX p-17). PORT TARIFFS 2. December 29, 2020 December 29, 2020. Developing ‘satellite’ ports at new location with slimstrength of man-power and cost-effective systems can also be thought of by the port. Let us start the Malaysia Airlines Marketing Mix & Strategy: Chapter I-Definitions; Chapter II- Vessel related charges; Chapter III- Cargo related charges & Chapter IV – miscellaneous charges. For new product, the pricing strategy will be based on a penetration price policy looking to establish long-term growth and return through building the brand. A courtside ticket for an LA Lakers game might be $750 – … Such is the viewpoint of a sampling of stakeholders approached by Port Strategy specifically in response to a recent comment of AP Moeller Maersk group chief executive Soren Skou on the subject. INTRODUCTION Port Tariff : is the reward / payment payable to the port authority for the rendering of a service. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Implement Port Pricing Strategies and learn about the situation applications of such strategies; Understand Cost Elements in Port Operations, and their constraints in the allocation of costs and port costing models; Learn about port dues and charges, who they are applied to and the purpose of various tariffs; Learn about various port administrative structures and their impact on your port pricing design … (Annexure III) These projections are made after taking into consideration the various factors such as trend of cargo handled during previous years, capacity increase, economic growth, traffic handled by the nearby competiting ports, market survey based on the indications given by the port users, reports of the various associations such as Agricultural Product Export Development Authority (APEDA), Timber Association, Indian Farmers Fertilizer Co-Operative Ltd. (IFFCO), Oil Coordination Committee’s report (OCC), reports from the important importers and exporters, Expert opinions, governments policies etc. 304.30 millions p.a. moderate concentration of competition with the Index of 0.09868. and ‘Port and Dock facilities Activity’ comprise sub-activities such as Cranes, berth hire, port dues, pilotage, water supply, dry docking, dredging, flotilla etc. Leave this field empty if you're human: B. The latest port reform was to improve the port tariff formation mechanism by speeding up the implementation of detailed list and public notice on port pricing. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Operating cost includes labour cost, material cost, maintenance cost, fuel cost and other expenditure such as management and administration, insurance, security. for speedy handling of the cargo. As your company’s presence in an export market matures, you may revise pricing strategies for existing and new services. 5.1.1 Port classification in the Hamburg-Le Havre range 59 5.1.2 Defining Competitive Strategy 60 5.2 Building the Competitive Strategy for the port of Hamburg 61 5.2.1 The Competitive Strategy for Hamburg 61 5.2.1.1 The Focus Strategy 61 5.2.1.2 The Overall Cost Strategy 62 5.3 Building the Competitive Strategy for the Bremerhaven 63 The Herfindahl Index (H) calculated comes out 1 and clearly shows the monopoly pattern of these ports. In terms of pricing strategy, the uniform pricing strategy generates higher green social welfare when both inland transportation cost and pollution are relatively low, or both are significantly high. Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine. Generally firms pursue only one of the above generic strategies. Article Purchase Porter's Generic Strategies with examples 1. The review will assess the function and performance of the current port system and recommend reforms to ensure that Victorian ports are well positioned to meet future needs. However, congestion pricing (for the priority berthing and ousting priority for berthing) and the other strategies such as comparative tariff and flexible and promotional tariff has also been adopted for certain commodities to attract the cargo. Economic Regulation; NPA Tariff Applications; Benchmarking and Research; Port Tariff Incentive Programme PTIP; Tariff Methodology; Tariff Strategy; Pricing Strategy. Indeed, various port authorities have such special prices for transhipment. Traffic projections are one of the influential factors in deciding the tariff structure. By closing this message, you are consenting to our use of cookies. Michael Porter has argued that a firms strengths ultimately fall into one of two headings: cost advantage and differentiation. There is also an acute competition faced by KPT from the Port of Mundra, a private port which is in the vicinity and handled almost 40 million tons of cargo during 2009-2010. Promotional Pricing: Promotional pricing refers to a pricing strategy that helps in promoting the product. A not-for-profit can use a Cost Leadership strategy to minimize the cost of getting donations and achieving more for its income, while one pursuing a Differentiation strategy will be committed to the very best outcomes, even if the volume of work it does, as a result, is smaller. Free resources to assist you with your university studies! Capital Employed comprises Net Fixed Assets (Gross Block minus Depreciation minus Works in Progress) plus Working Capital. 3099067 This paper presents the current pricing system of Kandla Port Trust and its impact on the traffic, intense competition, financial gains etc. Comparison of tariff is important particularly so when the port compete for the same hinterland. is a psychological pricing strategy in which goods or services are given either an odd number or an even number to match the product’s image. When port pollution is considered and has a relatively large impact, the integration of the two ports improves green social welfare for the region. Cost statement also shows future projections. ‘Caro handling Activity’ comprise sub-activities such as cargo handling, warehousing and storage, mobile cranes etc. Also there are 187 minor ports under the control of various State Maritime Boards. *You can also browse our support articles here >. Port faces severe competition from nearby State owned 20 minor ports and private ports which handled 205.98 millions metric tons during 2009-10. A comprehensive pricing strategy is comprised of many layers creating a foundation for price setting that minimises erosion and maximises profits over time. Port tariff 1. Info: 2752 words (11 pages) Essay These studies have all concluded that the port adopts appropriate cooperative pricing strategy in competition, which is conducive to the improvement of total profits. Pricing Strategies – Psychological . The merger (integrated port) can select either the price discrimination or uniform pricing strategy after integration. For expenditure projection, latest expenditure is adjusted to the Wholesale Price Index for All Commodities announced by the Ministry of Finance, Govt. Effected by direct competition between carriers, port authority, commodity & alternative transport (inland & air transport). Storage pricing strategies for import container terminals under stochastic conditions. An independent review into Victorian ports has commenced and is being led by Independent Reviewer Mark Curry, engaged by Freight Victoria. Herfindahl Index (H) for these ports shows pattern of equality in the market share i.e. To this operating cost, as stated above, the cost such as retirement benefits/ex-gratia payment, writing off losses etc. “Pricing is a managerial task that involves establishing pricing objectives, identifying the factors governing the price, ascertaining their relevance and significance, determining the product value in monetary terms and formulation of price policies and the strategies, implementing them and controlling them for the best results”. Our services cost such as Cargo handling, warehousing and storage, mobile cranes etc adding services ‘... Our AI driven recommendation engine Total operating cost by 23.68 % etc the Index of 0.09868 (. 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