1. Efficient allocation of port facilities

2. Improvement of services and expansion of facilities

3. Introduction of optimal tariff policy from owner, operator, or user point of

view

4. Support for development of domestic shipping

5. Encouragement of trade in specific imports or exports and/or specific

ship types in the national, regional, or local interest

6. Efficient allocation of cargo within a multi port system

7. Efficient allocation of cargo between modes

8. Maximization of local, regional, and/or national income

9. Optimum financial strategy to meet financial obligations toward lenders,

owners, national, local, or regional communities or combination thereof

10. Maximum total net utility

11. Income distribution

12. Cost reimbursement

1. Meeting the financial costs of the port including the cost of debt

servicing.

2. Attainment of a specific or maximum achievable return on the assets

employed by the port.

3. Achievement of cash flows that are sustainable and minimize short-

term borrowings.

4.Reserve accumulation to meet contingency, facility maintenance,

technical improvement, and capacity enhancement requirements.

5.Promotion of facility use to assure effective (balanced) utilization of

port assets.

1. Port operations performance

2. Port cost structure and finances

3. Port user costs and the alternatives available to port users.

4. Cost at competing ports

By assessment, we have:

Ship owner/Operator

Shipper/Receiver/Cargo Owner

1. Navigation fees

2. Tonnage taxes

3. Dockage

4. Launch hire

5. Mooring/unmooring

6. Pilotage

7. Towage

8. Water

1. Load/unloading

2. Cranage ($/hr)

3. Stevedoring ($/hr)

4. Storage

5. Wharfage/ demmurrage

Function of:

Ship Characteristics

Cargo Characteristics

1. Tonnage taxes ($/nrt)

2. Dockage ($/ton/day)

3. Mooring/unmooring ($)

4. Pilotage ($/draft)

5. Towage ($/tug)

1. Loading/unloading ($/ton)

2. Cranage ($/hr)

3. Stevedoring ($/hr)

4. Stprage ($/ton)

5. Wharfage ($/ton)

1. Economic Approach- This usually implies the use of marginal cost pricing . (assumes use

of marginal cost pricing in all related transport activities). Average costs are only equal to

marginal costs when the port operates near capacity, below that level of operation

marginal costs are well under average costs.

2. Financial Approach- This is usually recovery of fixed and variable costs plus adequate

return on investment and working capital employee, generally consistent with an average

cost pricing approach.

3. Impact Pricing Approach- This is usually based on the impact on:

a. A regional- national development

b. An existing level and distribution of economic activity

c. A national economic policy including a policy toward redistribution of wealth

d Some financial resources of government and ability to provide subsidies of alternatively

to reinvest profits

e. An impact of services on users and others and the resulting value of service to users

4. Incentive Pricing.- This usually base on the tariff requirements that will attract users. who

are capable of efficiently using port resources. It is generally designed to encourage

efficient use of r sources, technological improvement, and increased productivity, and

often designed to assure marginal ability to pay at accrued benefit pricing.

1. The formulation of goals

2. The development of pricing strategies

3. The accounting for the costs to the port of

providing resources and services.

4. The determination of the productivity of port

resources in performing different activities.

5. The estimation of costs to port users and the

effects of competition on the demand for port

services.

Formulation of goals

Preparation of strategies

Forecast

demand

Revision of tariff items

Related to fixed costs

Financial analysis

Comparative

tariff analysis

Revision of tariffs

Revision of tariff items

Related to variable costs

Performance analysis

by activity

Cost analysis

by activity

Analysis of costs

To port users

Marketing

analysis

Revision of demand forecast

Developed tariff formulation process

They demand on port ownership, port control. port development,

the role of the port, and more. The most common port investment

objective is probably “economic efficiency”, which can be

expressed or measured in terms of the following-

1.Discounted net national, regional, or local benefits such as income

generated by particular port investment alternatives.

2.Transportation cost savings, and the resulting impact on

transportation costs of trade and services.

3.Indirect economic benefits including secondary and multiplied

effects.

4. Impact on direct and indirect employment or unemployment

5. Impact on local, regional, or national economic growth.

Equity objectives are usually much harder to measure than economic

efficiency because it is often difficult to define regions or classes and to

measure equity.

Another objective of increasing importance can be defined as the

environment quality objective, which is usually measured in terms of the

percent change in environmental quality parameters such as:

1. Air, water, noise (etc.) pollution

2. Aesthetics

3. Impact on recreational opportunities

4. Safety (employees, users, community)

5. Transportation

6. Flexibility to respond to changing requirements

7. Growth

8. Community acceptance

1. Minimizing ship turnaround tune in port

2. Maximization of port facility and resource utilization

3. Maximization of port throughput in terms of ship and cargo traffic

4. Minimization of port costs per unit throughput or per unit time

5. Maximization of port surplus (profit)

6. Minimization of port investment risk

7. Maximization of port employment

8. Minimum impact of regional (national) trade competitiveness

Statement of investment objective

Definition of measure of investment success

Description or modeling of investment alternatives

Investment analysis model

Investment evaluation model

1. Standard benefit/cost analysis including internal rate of

return or net present value methods in which financial and

economic benefits and costs of the investment are

compared.

2. General consumer surplus or consumer utility analysis in

which we assume, that the public has a diminishing

marginal utility for benefits arising from investment in

projects. Consumer surplus is defined here as the

difference between the amount the public is willing to pay

and actual cost.

3.Maximization of the expected value of utility of an

alternative investment chosen from among a choice of

investments.

1. A set of available alternative investments decisions.

2. The status and possible actions of competing ports.

3.Empirical and subjective data from observation estimates subjective - judgments, surveys, and the like.

4.Performance of alternatives in terms of capacity, service, revenues, costs,

benefits, or outcomes resulting from selections from among the alternatives.

5.Sets of decision strategies including constraints or limits or limits in both range, number of decisions, and sequence of decisions.

6.Objectives or criteria for effective decision making, as either a quantifiable criterion such as maximum profit or benefit or maximum utility. The objective may also be conditional or it may itself contain uncertainty

1. Competitive

2. Adversity and other factors relating to opposition

3. Technological

4. Human relation

5. Political and regulatory

6. Market

7. National and international relations

8. Resource availability

1. Function Variables

such as:

Port functions

Port capabilities

Port jurisdiction

Port service and labor

agreements

2. Structural Variables

such as: .

Departments

Services provided

3. Environmental Variables

such as:

External.

Local, national, and

internal regulation

including rate regulation

Community requirements

Agency and other ruling

Internal

Union contracts

Service agreements

4. Competition Variables

such as:

Competing ports and

services

Competing rates and

capacities

5. Market Variables

such as:

Economic development

Export competitiveness

6. Macro environmental

Variables

such as:

Macroeconomic conditions

Social trends

Political trends

Legal developments

7. Resource Variables

such as:

Staff availability and training

Staff relations

Budget

Credit lines

Data bank

Decision quality

Port ownership – public or private

Port’s current and future development and investment strategy

Size of the investment required

Expected return from port capital investment and the debt capacity the port can carry.

Expected growth rate in port demand and associated uncertainty and risk.

Costs and benefits, terms and provision of available financing methods and their relative effect on the degree of control of port management over its operations.

1. Internal rate of return (IRR)

2. Net present value (NPV)

3. Pay back period (PP)

4. Accounting rate of return (ARR)

5. Capital recovery factor (CRF)

6. Minimum average annual coat (AAC)

7. Present Worth (PW)

8. Equated interest rate of return (EIRR)