2.7 Illustration of revenue sources for port enterprises

FIGURE 2.7

Illustration of revenue sources for port enterprises

Payer Shipping company or agent

Fees and charges Pilotage fee Tug service fee Supplying and pollution treatment fee Berthing charges

Port facilities Tug Water, oil, gas supply facilities

Docks, floats, anchorages Port operation lump-sum fee

Handling, transportation, rainproof equipment, and so on Cargo owner or agent

Warehouse usage fee Port facility security fee Harbor dues on cargo

Warehouses and storage yards Breakwaters, waterways, anchorages

Payment receiver Pilotage service provider

Tug service provider Suppliers of water, oil, and gas for ships Port operators

Source: Original analysis conducted for this report by PricewaterhouseCoopers (PwC). Provider of basic or general port infrastructure

At the outset of China’s opening to the world, the government (through the Ministry of Communications) cited macroeconomic strategy as the justification for setting port charges at certain levels. As foreign investment in and operation of ports became more prevalent, especially in the operation of container terminals, government control over port tariffs was relaxed somewhat. As decentralization progressed, local governments adjusted port charges to optimize cost recovery and price competitiveness, eyeing the practices of other ports.

Since 2015, the MoT has continued to promote the market-oriented reform of port charges and merged redundant items to form a simplified list of charges. According to “Port Charges and Charges Measures” port charges are now categorized as (1) government-determined, (2) government-guided, or (3) enterprise-determined (Ministry of Transport and National Development and Reform Commission 2015).

In 2019, a notice on the revision of port charges reduced some government charges (including cargo port charges, security fees, and pilotage fees), consolidated certain charges, and required pricing policies to be enforced and regulated (Ministry of Transport and National Development and Reform Commission 2019). Most important in the first category are port construction fees; designed as a dedicated source of funding for coastal public port facilities, IWT infrastructure and inland ports are now used as a tool for macroeconomic policy (box 2.4).

In 2020, the port construction fee was removed, and the fee to compensate for ship pollution was cut in half. The same year, all government-determined port charges were reduced by 20 percent from March 1 to June 30 as a way to stimulate trade following the initial downturn at the start of the COVID-19 (coronavirus) pandemic. These fee modifications were later extended to the end of 2020.