The Chinese government is prohibiting some port service charges and reducing the costs of others in an attempt to galvanize container shipping as the as the country’s container volume growth slows due to reduced global demand.
China's Ministry of Transport and National Development and Reform Commission on Tuesday released a notice prohibiting port operators from imposing fees for services other than pilotage, towage, berthing, oil boom, feeders, special trimming, waste disposal, water, bunker, and power supply. Extra charges levied for night and national holiday pilotage and towage services will be reduced by 45 percent, while port security charges for 20-foot and 40-foot containers will be reduced to $1.61 and $2.42 per container, respectively, the notice added.
The new measure is expected to cut costs incurred by shipping companies and although the move may reduce port operators' revenue and profit in the initial stages, reduced charges should spur growth in shipping and gradually bring in more revenue for ports, said analyst Wang Hai of Ship.sh, a Chinese shipping media organization.
The top 20 ports in China grew at an average of 3 percent year-over-year in the first five months of the year, however, in the last two months that growth has slowed to just over 1 percent. The ports handled 75.5 million containers in that time.
As global demand has fallen, Drewry recently lowered its expectations for the rate of growth of China’s port throughput from 5.8 percent to 4.9 percent.
