THE IMPACT OF TERMINAL HANDLING CHARGES ON OVERALL SHIPPING CHARGES: AN EMPIRICAL STUDY

Freight rates traditionally included both ocean freight charges and terminal charges at ports. Since the introduction of terminal handling charges in 1991, however, the freight rate only covers the port-to-port charge, while the on-shore costs of using the container terminals are charged as separate terminal handling charges (THCs). This paper investigates the impact of THCs on the container handling industry of Hong Kong and tests the hypothesis that dividing the freight rate into two components enables the shipping lines to increase their overall shipping charges. Although both THCs and freight rates are collectively set by conferences, this study argues that THCs are easier to enforce because they are invariant to other attributes such as haulage distance, inland transport services and types of commodity being shipped. Empirical findings from this study do suggest the separation of ocean freight rates from terminal charges has increased the price of shipping a container. THCs also appear to decrease the throughput of the Hong Kong container handling industry. The introduction of THCs has cost shippers, but profits have increased for the shipping lines. This increase can be attributed to a general increase in the shipping lines' market power and the exercise of this power in the form of collectively set THCs.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/09658564
• Corporate Authors:

  Elsevier

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  Kidlington, Oxford  United Kingdom  OX5 1GB
• Authors:
  • Fung, M K
  • Cheng, L K
  • Qiu, L D
• Publication Date: 2003-10

Language

• English

Media Info

• Features: Appendices; Figures; References; Tables;
• Pagination: p. 703-716
• Serial:
  • Transportation Research Part A: Policy and Practice
  • Volume: 37
  • Issue Number: 8
  • Publisher: Elsevier
  • ISSN: 0965-8564
  • Serial URL: http://www.sciencedirect.com/science/journal/09658564

Subject/Index Terms

• TRT Terms: Container handling; Empirical methods; Freight handling; Freight terminals; Freight traffic; Market dominance; Ocean shipping; Profits; Rate making; Rates; Shipping conferences
• Uncontrolled Terms: Freight rates; Shipping lines; Terminal handling charges
• Geographic Terms: Hong Kong (China)
• Subject Areas: Finance; Freight Transportation; Marine Transportation; Terminals and Facilities;

Filing Info

• Accession Number: 00960816
• Record Type: Publication
• Files: TRIS
• Created Date: Jul 27 2003 12:00AM