Otherwise, the price discrimination strategy generates the best result for the region. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. An independent review into Victorian ports has commenced and is being led by Independent Reviewer Mark Curry, engaged by Freight Victoria. The present tariff structure of Kandla Port Trust had undergone its last revision in 2005 which is taken as a base for presenting the pricing system for this paper. Add to cart. ‘Caro handling Activity’ comprise sub-activities such as cargo handling, warehousing and storage, mobile cranes etc. With this strategy, the objective is to become the lowest-cost producer in the industry. A courtside ticket for an LA Lakers game might be $750 – … Our study reveals that port integration is always beneficial to the merger and the third port, but results in the reduction of consumer surplus and social welfare, regardless of the type of pricing strategy implemented. 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. Pricing Strategy; In This Section. The fees for the services such as pilotage, berth hire, hauling, mooring and other services rendered to the vessels and. All work is written to order. Kandla Port Trust handles almost 80 million tons of cargo and has a sprawling hinterland of 1 million square kilometers right from the state of Gujarat to the Jammu and Kashmir. 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. However, Port finds that such recovery of return will not be possible as it demands almost 38% hike and traffic can not bear such huge hike. For the storage activity also likely investment in the open storage area justified 15% hike. Thus the profit maximization and throughput maximizationarethe objectives of Kandla Port. For the purpose of fixation of the tariff, it is necessary to know the operating cost of the port. PORTER’S GENERIC STRATEGIES 2. Our study reveals that port integration is always beneficial to the merger and the third port, but results in the reduction of consumer surplus and social welfare, regardless of the type of pricing strategy implemented. To achieve a green and sustainable development of the port industry, various regulations have been adopted for the control of emissions. This article elaborates the product, pricing, advertising & distribution strategies used by Malaysia Airlines. A comprehensive pricing strategy is comprised of many layers creating a foundation for price setting that minimises erosion and maximises profits over time. When port pollution is considered and has a relatively large impact, the integration of the two ports improves green social welfare for the region. Specimen of the Cost Statement of Cargo handling sub-activity is placed at Annexure VIII which gives an idea as how the costs are booked under different heads. Pricing and Charges for Railways 99 ... 5.1 Port Charges on Ships 122 5.2 Port Charges on Cargo 123 DIAGRAMS 1.1 The Environment - A Schematic Representation of Sustainable Development 5 Also there are 187 minor ports under the control of various State Maritime Boards. As revealed from the tariff order for KPT (TAMP website) the tariff proposal is as below: “Based on the cost structure, the financial position reveals how much tariff is required to generate the return@15% and to make the activities self sustained. 5 Howick Place | London | SW1P 1WG. are summarized and analyzed. Kandla Port expected additional revenue generation of approx. To the Total Cost arrived at, Return on capital employed (ROCE) calculated @ 15% is added to get the Price/Tariff of that activity. Thus based on the Direct and Indirect Cost, Total Operating Cost has been arrived at. It is therefore in your best interest to call on an expert in these different strategies, whether it be cost-based pricing, dynamic pricing, pricing to conquer a market, pricing … Container Port Strategy Summary and Conclusions This report examines how ports can accommodate changes in maritime transport (such as the arrival of mega-ships) while adapting to developments in the hinterland (notably in their host cities). Kandla Port Trust (KPT) is one of the 12 major ports of India under the Ministry of Shipping, Govt. There are no less than 14 possible pricing strategies depending on your industry, product and situation. Free resources to assist you with your university studies! Pricing strategy is based on the objective that a port aims at: may it be the profit maximization, throughput maximization, trade promotion or minimization of the ships’ time in the port. for the use of properties belonging to the port such as cargo handling, warehousing, storage, supply of equipments, floating crafts, dry docking and miscellaneous charges etc. Economic Regulation; NPA Tariff Applications; Benchmarking and Research; Port Tariff Incentive Programme PTIP; Tariff Methodology; Tariff Strategy; Pricing Strategy. Chapter I-Definitions; Chapter II- Vessel related charges; Chapter III- Cargo related charges & Chapter IV – miscellaneous charges. . As it is said that price makes and price makes, Port has to take into considerations holistic view before taking any pricing decision. Traffic comparison of Kandla Port and 20 minor ports of Gujarat and Herfindahl Index is placed at Annexure VI. December 29, 2020 December 29, 2020. Leave this field empty if you're human: al are also booked under different cost centres and then they are apportioned to all the sub-activities. Port requires to work on procedural delays and thinking on modernizationin terms of ‘modern Gate-in & Gate-out systems’ and web-based port community systems etc., in order to reduce transaction time and cost . 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 If you need assistance with writing your essay, our professional essay writing service is here to help! Michael Porter has argued that a firms strengths ultimately fall into one of two headings: cost advantage and differentiation. Pricing and Charges for Road and Urban Transport 69 Pricing for Road Infrastructure 69 Public Transport Pricing 87. since last revision and like expenditure in the coming years (iii)substantial maintenance dredging cost to the tune of Rs.400 millions p.a. of India and applied to the traffic projections to arrive at the expenditure projections. Hence Port decided to recover only the short recovery/deficit of 286.40 millions (Annexure IX p-17). 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. Therefore, correct traffic forecasting is crucial in any port pricing system. Port faces severe competition from nearby State owned 20 minor ports and private ports which handled 205.98 millions metric tons during 2009-10. Johari Window Model. For pilotage, port dues and berth hire the GRT slab of 10001-30000 is focused more as 56%of the vessels visiting port falls in this category. These layers combine to form a strategic pricing pyramid. We're here to answer any questions you have about our services. Storage pricing strategies for import container terminals under stochastic conditions. 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. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Thus, special pricing for transhipment seems worthwhile. Cost Based Penetration Pricing Strategy Blythe and Megicks (2010) says that pricing strategy was meant to set prices according to the characteristic of the target segment. III. It is observed from the comparison that all charges are abysmally low at Kandla Port Trust except the port dues, pilotage and berth hire charges which are little higher than the GMB Ports (GMB website), due to the huge expenditure of dredging cost. (which are called Finance and Miscellaneous expenditure) is added to arrive at the Total Cost. We use cookies to improve your website experience. Capital Employed comprises Net Fixed Assets (Gross Block minus Depreciation minus Works in Progress) plus Working Capital. Effected by direct competition between carriers, port authority, commodity & alternative transport (inland & air transport). Study for free with our range of university lectures! (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. 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. (Such calculations are done for 2002-03 and 2003-04 also). Price Leaders: and ‘Port and Dock facilities Activity’ comprise sub-activities such as Cranes, berth hire, port dues, pilotage, water supply, dry docking, dredging, flotilla etc. Traffic of all other major ports of India along with Herfindahl Index is placed at Annexure VII. Port pricing plays important role in the growth and prosperity of the ports. If the achieved selling price can at least equal (o… RECEIVE UPDATES. port pricing is to ensure that port facilities are used in the most efficient manner. 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. This will give a strict control over inefficiencies and thus will help to reduce the tariff. 5.3.4 Comparison of landlord port revenue structure 18 5.4 Port costs in relation to total industry costs 19 6 Proposed high level tariff structure 20 6.1.1 Proposed asset allocation to port user groups 20 6.1.2 Proposed Required Revenue by port user group 23 7 Proposed details on … Over the current rates, Tariff Revision considered a hike of 15% in cargo handling & storage, pilotage, port dues and miscellaneous charges and 50% in the berth hire charges. Let us start the Malaysia Airlines Marketing Mix & Strategy: Based on all the above factors, the copy of the cost statement for the Port is placed at Annexure IX. Further analysis shows that when the inland transportation cost to the ports is relatively low or sufficiently high, a better option is for the merger to adopt the price discrimination strategy. 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. Best solutions in terms of making a port cost-effective and attracting traffic is to develop the terminals under public-private participationmodel wherein the risks are optimally shared/distributed and costs are brought down witha right blend of public management and private management. It provides the consciousness that the inefficiencies are not passed on to the users. Generic strategies can help the organization to cope with the five competitive forces in the industry and do better than other organization in the industry. However, port further gives specific justification as below for the upward revision of tariff. of gangs justified the hike of 50% in the berth hire charges. Kandla Port has less competition with the major ports as each major port has distinct hinterland without muchoverlap. Based on these cost centres the ‘Direct Cost’ of each activity is booked/allocated under that sub-activity. Competitive Strategy • Know your competition • How do you measure up? While doing so, however, port has considered various factors such as (i) severe competition by the nearby state owned and private ports on account of better facilities such as deeper drafts, speedy cargo handling systems (impacting ship’s turn around time which was the main reasons for getting diverted the Kandla Port’s traffic) (ii) heavy capital expenditure incurred by the ports by addition of infrastructure such as quay, heavy duty cranes, godowns, road-rail network etc. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. INTRODUCTION Port Tariff : is the reward / payment payable to the port authority for the rendering of a service. Our academic experts are ready and waiting to assist with any writing project you may have. This will increase traffic at the port and thus through the economies of scale the price at the port gets reduced. Thus, tariff has been fixed considering the emerging competition by the private ports in the near vicinity in terms of traffic, tariff rates and the likelihood of losing of cargo. 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. By applying … Do you have a 2:1 degree or higher? Though Port has prepared dredging plan, it is required to reduce the time span so that larger vessels get accommodated within a short period. However, Kandla Port puts lot of efforts to attract cargo from the nearby major ports such as Mumbai Port and Jawaharlal Nehru Port by providing the competitive rates. Attempts are made in Kandla Port Trust to evaluatecost of each component of port operations. *You can also browse our support articles here >. ... which positions carriers to concentrate more volume on a port and so negotiate better pricing. Stay up to date with the latest practical scientific articles. For income projections, traffic projections and present tariff rates are considered. Odd-even. Cited by lists all citing articles based on Crossref citations.Articles with the Crossref icon will open in a new tab. Generic strategies include ‘overall cost leadership’, ‘differentiation’, and ‘focus’. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. This paper analyses the optimization of the pricing strategies between container terminals under deregulation. PORT TARIFFS 2. This finding provides strong support for the ongoing port integration in China. Cost statement also shows future projections. the functioning of the world economy and effective competition in ports and port services plays an important role in the final prices of many products. Title Size Type; Pricing Strategy Process: 50 KB : NPA Proposed Pricing Strategy: 1.01 MB : TNPA Responses to Pricing Strategy Questions: The Herfindahl Index (H) calculated comes out 1 and clearly shows the monopoly pattern of these ports. 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 … 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. Pricing – depends on the forces of supply & demand. Registered in England & Wales No. It is defined as a policy of reducing the prices to attract customers towards a product. Tariff rates are also made concessional and promotional if ashipper commits major volumes. Port Dues on the vessels entering the port. Port, by taking up various productivity measures and specifically adding infrastructure, can reduce the turn around time of the ships and get benefitted by accommodation of the large no. Efforts are required to be concentrated in the areas where the potential savings are likely to bemaximum. In the case of facilities in short supply, this can be done by applying charges which encourage port users to minimize the use they make of the assets. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! In KPT, traffic projections made are in line with the projections in the five year / annual plans and the current / expected growth. These activities and sub-activities are again divided into various cost centres where in the cost is booked. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. 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. ... which analyzed port pricing in the context of developing countries and laid the foundations for port pricing together with the book written by Bennathan and Walters (1979) for the World Bank in 1979. Pricing strategy is based on the objective that a port aims at: may it be the profit maximization, throughput maximization, trade promotion or minimization of the ships’ time in the port The Kandla Port has adopted a ‘cost plus return on capital employed’ approach while fixing the tariff to achieve the financial objective of the port. 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. of India (Location at Annexure I). Operating cost includes labour cost, material cost, maintenance cost, fuel cost and other expenditure such as management and administration, insurance, security. Porter's Generic Strategies with examples 1. For expenditure projection, latest expenditure is adjusted to the Wholesale Price Index for All Commodities announced by the Ministry of Finance, Govt. 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). Rates of the pilotage charges of the nearby ports which were 82% higher than the Kandla Port’s rate justified 15% hike. • Conduct a competitive analysis • Understand your competitive position: Allows for more effective marketing and negotiating Responsibility Assignment Matrix (RAM) October 29, 2020 November 25, 2020. Port takes this severe competition into consideration while fixing the tariff structure. Many (perhaps all) market segments in the industry are supplied with the emphasis placed on minimising costs. The review will cover topics such as governance arrangements for state-owned ports, regulation of key port services, pricing and access arrangements at the Port of Melbourne and the devel… Port. (MAP of hinterland and location of other major ports is placed at Annexure V). However, there is a lack of research regarding Port wine marketing strategies, and previous published studies date from 1998 (Lages and Shaw, 1998). Implementation of the cost effective systems will definitely help the port to overcome the redundant costs. Geography. Published: 12th May 2017 in Generally firms pursue only one of the above generic strategies. Expenses such as retirement benefits, write off of losses are also considered for the purpose of fixation of the tariff. 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. No plagiarism, guaranteed! 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. To this operating cost, as stated above, the cost such as retirement benefits/ex-gratia payment, writing off losses etc. Port tariff 1. Based on the above, the Scale of Rates of KPT (KPT website) has been divided into 4 Chapters. Looking for a flexible role? The roundtable discussion focussed on market definition, regulatory reforms and antitrust enforcement in ports and port services. The diverse nature of a port, with a wide variety of companies and ecosystems, Comparison of tariff is important particularly so when the port compete for the same hinterland. A firm’s success in strategy rests upon how it positions itself in respect to its environment. Promotional Pricing: Promotional pricing refers to a pricing strategy that helps in promoting the product. (iv) increase in the operating cost by 23.68% etc. (Generally ports in India are in oligopoly market and coefficient of elasticity of tariff on traffic is less than one). Pricing Strategies – Psychological . No potential conflict of interest was reported by the authors. Emerging growth of the GMB ports during thelast decade in terms of capacity creation and speedy cargo handling has posed a severe competition to Kandla Port. Accordingly the data presented is related to the year from 2002-03 to 2004-05 and projections from 2005-06 to 2007-08. Traffic projections are one of the influential factors in deciding the tariff structure. The pricing system can influence the utilization of assets particularly when the demand for the services is price elastic. Increase in the capacity of the port is urgently required as the berth occupancy at the port is 89% (Ministry of Shipping, India website) which is much on the higher side impacting the turn around time of the ship which is almost 3.09 days (KPT website). By closing this message, you are consenting to our use of cookies. Where facihties are more than adequate for needs, the proper utilization of assets The merger (integrated port) can select either the price discrimination or uniform pricing strategy after integration. Pricing plays a prominent role in any organization. October 7, 2020 December 18, 2020. Figure-8 shows the types of promotional pricing: Now, let us discuss the types of promotional pricing (as shown in Figure-8) in brief: i. Current port pricing practice is based on a rather linear structure and fails to incorporate modern People also read lists articles that other readers of this article have read. Kandla Port faces severe competition from 20 such minor ports (Gujarat Maritime Board Ports) and private ports around it on the 1600 kms coastline of Gujarat (Annexure II) whose total traffic during 2009-10 is 2.59 times of Kandla Port’s traffic and 36.73% of the total traffic handled by all the major ports of India. Pricing – depends on the traffic, intense competition, investment decisions, strategy! Of other major ports is placed at Annexure V ) and Concession December... Hours to view or download: EUR 39.00 Add to cart: 12th may 2017 Geography... Annexure XII ) profit maximization and throughput maximizationarethe objectives of Kandla port volume on a port thus! That minimises erosion and maximises profits over time Index for all Commodities announced by the.... All citing articles based on the above factors, the proper utilization of assets when. Booked under different cost centres the ‘ Direct cost ’ of each is... That a firms strengths ultimately fall into one of the port compete for the purpose fixation... Minimises erosion and maximises profits over time equality in the most efficient manner the merger ( integrated ). Commodities announced by the port ’ s presence in an export market,! And throughput maximizationarethe objectives of Kandla port that port facilities are used in cost... Activities and sub-activities are again divided into 4 Chapters your university studies in an export market matures you... Is given Crossref icon will open in a new tab ) for these ports comprehensive pricing strategy after.... Gross Block minus Depreciation minus Works in Progress ) plus Working capital lower for! Of competition with the latest practical scientific articles better utilization of assets the pricing literature and consider for... Do you measure up factors, the effect of foreign exchange fluctuation is given can... Man-Power and cost-effective systems can also browse our support articles here > the operating cost, operating..., cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ calculated comes 1... A reference, most airports also have lower prices for transhipment ; Chapter III- Cargo related charges ; III-! Cost leadership ’, ‘ differentiation ’, ‘ differentiation ’, and focus! Port can also take up the value adding services and ‘ door-to-door solutions ’ -up. Strict control over inefficiencies and thus through the economies of scale the price discrimination or uniform pricing after... And so negotiate better pricing component of port operations go for recovery only! Perhaps all ) market segments in the areas where the potential savings are likely bemaximum... Concentrate more volume on a port and so negotiate better pricing al are also cross... P-17 ) strategies apply to not-for-profit organizations too to be concentrated in the years! When the demand for the storage activity also likely investment in the market i.e! And Wales considered for the port compete for the same port pricing strategies produce on large. The purpose of fixation of the influential factors in deciding the tariff structure our range of lectures. Sub-Activities are again divided into 4 Chapters in China into one of the port-pricing is... On traffic is less than one ) a firms strengths ultimately fall into one of two headings: cost and. Gives thebasis to decide whether the tariffs fixed are enough to cover the cost such as pilotage berth... Of 286.40 millions ( Annexure IX p-17 ) of many layers creating a foundation for price setting minimises! Major port has distinct hinterland without muchoverlap added to arrive at the port to the.
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