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The impact of terminal handling charges on overall shipping charges: an empirical study

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  • Fung, Michael K.
  • Cheng, Leonard K.
  • Qiu, Larry D.

Abstract

Before the introduction of terminal handling charges (THCs), traditional freight rates included both ocean freight charges and terminal charges at ports. Since the introduction of THCs in 1991, the freight rate has become a "port-to-port" charge that covers only the sea leg, while the on-shore costs of using the container terminals are charged separately as THCs. Although both THCs and freight rates are collectively set by conferences, in this study we argue that the former are easier to enforce because they are invariant to other attributes such as haulage distance, inland transport services and types of commodity being shipped. This argument is consistent with the empirical findings from this study that suggest the separation of ocean freight rates from terminal charges has increased the overall shipping charges. In addition, we find that THCs affect the Hong Kong container handling industry by lowering its throughput.

Suggested Citation

  • Fung, Michael K. & Cheng, Leonard K. & Qiu, Larry D., 2003. "The impact of terminal handling charges on overall shipping charges: an empirical study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(8), pages 703-716, October.
    • Handle: RePEc:eee:transa:v:37:y:2003:i:8:p:703-716
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    1. MEERSMAN, Hilde & STRANDENES, Siri Pettersen & VAN DE VOORDE, Eddy, 2014. "Port pricing: Principles, structure and models," Working Papers 2014006, University of Antwerp, Faculty of Business and Economics.
    2. Sanchez Rodrigues, V. & Pettit, S. & Harris, I. & Beresford, A. & Piecyk, M. & Yang, Z. & Ng, A., 2015. "UK supply chain carbon mitigation strategies using alternative ports and multimodal freight transport operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 78(C), pages 40-56.
    3. Castelein, R.B. & Geerlings, H. & van Duin, J.H.R., 2019. "Divergent effects of container port choice incentives on users' behavior," Transport Policy, Elsevier, vol. 84(C), pages 82-93.
    4. McIntosh, C.R. & Wilmot, N.A. & Skalberg, R.K., 2015. "Paying for harbor maintenance in the US: Options for moving past the Harbor Maintenance Tax," Transportation Research Part A: Policy and Practice, Elsevier, vol. 74(C), pages 210-221.
    5. Xiao, Tingting & Ha, Albert Y., 2018. "Optimal unloading and storage pricing for inbound containers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 111(C), pages 210-228.

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