Port charges could be an ASEAN asset – but they need to be transparent, say experts

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When the president of shipping line Silversea told a Sydney audience it was more profitable to berth his luxury liner Silver Wind in Asia, he sparked a debate that has reverberated around the region.

Steve Odell is believed to have been referring to a $25 per passenger charge Sydney Port imposed earlier this year.

Now ASEAN Cruise News can reveal figures which bear out his claim.

According to a comparison table compiled by CHART Management Consultants last year [see below], substantial security, navigation and towage charges make Sydney tower over ports in Singapore, Indonesia and China.

Sydney is more than double the costs in Singapore, which is one of the lowest ports to berth in for ships of 1,950 passengers and above.

Chart 3

Mr Odell says it is more financially viable to operate cruises out of destinations such as Indonesia and Myanmar. “There’s the economics of running a cruise line and a program and we feel that over the next two years we will make more money by operating from Asia not Australia,” he said.

His views are shared by Royal Caribbean regional vice president Gavin Smith, who complained that Sydney was “too expensive’’ when his group was forced to pay the $25 per passenger increase in addition to the $100,000 charged for using the Overseas Passenger Terminal.

Port charges are an important piece in the jigsaw of attracting cruise lines to our region, and the lack of a consistent policy towards passenger vessels has long been a sore point among shipping lines.

Asia may look cheaper than places like Australia – now holding the title of the world’s fastest growing cruise region. But because it is so difficult to make comparisons, the region may be loosing a key advantage.

According to experts who spoke to ASEAN Cruise News, no one country has a single way of calculating the cost of berthing and servicing vessels, and many in the region now concede something must be done.

The issue will form part of this month’s Cruise Shipping Asia Pacific conference.

Leading authorities including ship agency Wallem Group managing director Dickson Chin, Worldwide Cruise Terminals Managing director Jeff Bent, CHART Management Consultants principal Ted Blamey, Princess Cruises vice president shore operations Bruce Krumrine, SEA Tours Co director Krai Panyarachun and Intercruises Shoreside & Port Services Isaac Vidales will talk about port charges, pilotage, fuel, water, berthing and other provisioning costs.

The lack of transparency and has made it difficult to analyse actual costs, Mr Blamey told ASEAN Cruise News ahead of the debate.

His company has studied and advised on port costs across the Asia-Pacific region, and combined the table we carry with this story – but even he concedes comparisons are extremely difficult.

“Wide variations occur in what is actually charged for, on what tariffs are based, in the number of entities to be paid, in the relative weight of each component and in the overall costs.

“For example, one port may base its port charges on overall length of the ship, another on gross tonnage, most calculate on time alongside while others on passenger count – and some have minimums.

Even the way individual stops are charged in a country can change.

“You need to assess whether the charges are per call, or once per cruise at first port of entry.

“Port service fees such as pilotage, tugs, baggage, garbage discharge vary widely too. It is a complex web,’’ he warned.

Kobe Port in Japan, for instances, charge US$34,000 just for the use of boarding bridges.

Mr Bent agreed that it is a complex issue.

“Total port charges are more than just the terminal charges. Cruise lines have to look at the total costs for a port including navigation fees, pilotage, tugs etc.

“I am also going to discuss the challenges to port infrastructure in Asia as cruise lines get bigger,’’ Mr Bent said.

But are Southeast Asian cruise terminals cheaper than Sydney?

Not necessarily, said Mr Blamey, because from studies conducted on the cruise industry in the Asian region showed that port fees and charges in Asia are high.

Myanmar’s Ministry of Tourism and Hotels said in a masterplan published in June last year that the extent the country can grow its cruise market is currently limited by, among other things, expensive port charges.

Mr Blamey says the problem is that port regimes have been designed for commercial shipping and not for tourism.

“We have proposed for one client country an incentive based on fee structure to encourage more cruise ship visits, recognising the actual costs of services delivered. It makes sense for both the cruise lines and the ports,’’ he said.

The reason: there is a tourism dollar bonus in disembarking passengers that is not the same for a container ship – and this is the message many cruise operators are trying to pass on to port authorities.