Wharfage refers to the charges that are applied when we use the wharf to load or unload the cargo. Wharfage charges are collected by the port
authorities to use their facilities and services in the ports. The port authority enjoys some flow of revenue through these charges.
There are three important considerations which are important in wharfage pricing policies:
- the flow of costs,
- the flow of benefits and
- the flow of revenue.
The revenue that is generated by the user’s benefits finance the operation of the port. The port authority cannot charge more than acceptable market value. If they try to charge cargo owners unreasonable amounts compared to the benefits that are offered by them, then the flow of cargo will dry up either by the ceasing of the trade or traders will switch to using other means of transportations. If port operators try to charge too much to the ships then they may not call.
Wharfage can be calculated in terms of revenue tonnes loaded or unloaded.
Here are some of the sample wharfage rates for carriers
- Port of Boston:- It will cost around 50 USD
- Port of Houston:- It will cost around 70 USD
- Port of New Orleans:- It will cost around 75 USD
Who pays for wharfage charges?
Wharfage charges are paid by customers who are interested to import or want to get goods by the means of sea transportation, the agent
settles the terminal charges before the departure of the goods from its side so that there is no problem after the goods arrive. Technically speaking, these are different from terminal charges and container handling charges for. Wharfage charges only covers the fees levied on the vessel operator for allowing the passage of cargo through it. Hence, it does not include other port operations costs like loading, unloading, demurrage, detention, sorting, labelling or storing.
After the goods reached their destination, they can usually be kept at the port for 5 to 6 days without any additional cost. This can be different when different
agencies are interested in the goods. When the deadline for removing the cargo exceeds, an additional charge may be applied before goods can be released.
The largest income of the ports in the world is from wharfare charges.
- Port of Shanghai: This is the biggest and the busiest port in the world. This port handles about 25.7 per cent of China’s
international trade volume. It has the daily cargo value of more than 1.6 billion USD.
- Port of Singapore: This is the second largest publicly owned seaport it has the cargo throughput value of more than 594 million tons
How to check correct wharfage charges
Wharfage charges are fixed by the authorities. They are not negotiable, however we do have to check that charges are being billed correctly. This can be done by going to the port authority’s website to view published rates. If the information is not available on the site, traders can request for the original bill from the agent.