An Assessment of Port Pricing Policy and Its Impacts on Transit Trade; A Case Study of the Port of Tema, Ghana

Abstract

This paper provides an assessment of port pricing policy at the port of Tema, and it impact on transit trade. To better assess the port pricing system, port pricing components like cargo handling charges, vehicle handling charges, and storage charges were examine using the regression method. Information was gathered from authorities like Ghana Port and Harbour Authority (G.P.H.A), Ghana Shippers Authority (G.S.A), Ghana Maritime Authority (G.M.A), and shipping companies like Mediterranean Shipping Company (MSC) and terminal operators like Meridian Port services (MPS) as well as from transit shippers from Burkina Faso, Niger, and Mali. This can further be divided into Port Users and service providers. Well-structured questionnaires were sampled using simple random sampling system. Literature review materials were categorized into two sections A and B; section “A” deals with port pricing policy, approaches and objectives of port pricing as well as charges levied at the port of Tema. While section “B” is on port pricing policy and Transit Trade in Ghana. Looking at the main objective of this work which is to access Port Pricing and review its impacts on Transit Trade, it was revealed that Port Pricing, that’s the three-main component of port pricing which are; storage, cargo handling and vehicle handling charges used in this study has no significant relationship with Transit trade at the Port of Tema according to the regression method used. Hence unofficial tariffs and other factors such as implementation of axle load regulations, bureaucracy of customs clearance system, the unauthorized detention of vehicles in transit and the extortion of money from drivers and the high number of unauthorized police check points for transit vehicles slow down trade and thereby increasing the cost of doing business since it affects freight rates. It was found out that G.P.H.A has been given the powers by the government of Ghana to set charges at the port of Tema which is accepted by all and even charges levied by terminal operators are approved by G.P.H.A. In determining these charges, a combination of cost approach is used with the help of market forces of demand and supply called the market approach with the aim at contributing to port productivity. Port pricing largely depend on the type of port organization and this can trigger greater economic growth and development. From the interview conducted it was noticed that the government of Ghana through its stakeholders is trying to put in some measures to solve some of these problems like the port expansion project which is ongoing, the removal of the axle load policy, development of an inland port at Boankra, and the building of a cordial relationship between the government of Ghana and the government of the LLC’s and many others. Recommendation were made from this research on the view that all major stakeholders at the port should be consulted during tariffs review and be aware of the changes that occurs in the port in pricing so as to achieve the same objectives with the Port Authority. Recommendation were also made on how to encourage Transit Trade by reducing the turnaround time at the port, increasing storage facilities for transit goods and revitalization of the railway network as well as ensuring that the pricing method of the port is designed in such a way that will achieved the long term (future) objectives and not only the short term (present) pricing objectives at the Port of Tema.