FIRST WORD BY THE GENERAL MANAGER

Very often when transport-related charges - such as the terminal handling charges, demurrage fees, forwarding charges - are increased by various parties involved in the transport pipeline, there is a general tendency by many to assume that the port charges have gone up. 

Such erroneous assumptions often stems, unfortunately, from the lack of transparency in the total charges presented to those at the beginning, or at the end of the pipleline, namely, the consignee or the shipper.

Port Klang has often suffered such unwelcome comments and criticism. For instance, when, the terminal handling charges (THCs) imposed by shipping lines are increased, criticisms are leveled at the port, and not the shipping line. The port, or the terminal operator merely collects the demurrage charges on behalf of the shipping line but stands accused of increasing the charges!

There are also instances when forwarding charges or the EDI charges under the Port Klang Community System are increased, it is again the port which is blamed for raising charges.

Much as it may be difficult to believe, Port Klang Authority has not raised its tariff for nearly a quarter of a century!

I am very sure there is no precedent like this in any part of the world. 

Consider this against the background that in the last quarter of a century the port has recorded remarkable improvement in the service levels - ships turning around faster than before, cargoes delivered swiftly than ever - and yet the charges have not gone up. This is despite the fact that the several elements, or factors that constitute the structure of port pricing have indeed gone up.

In fact, taking into account the inflation factor over the past two decades the real value of port charges (in constant prices) would have fallen drastically. The burden of port charges, as a component of total transportation cost, is actually lower than it was two decades ago.

Thus when PKA recently received the approval of the Ministry of Transport to revise the port tariff (effective 1 October, 2000) one can hardly say the increase has brought about a higher burden of cost. 

PKA has basically sought to recover the yield in the tariff that has been eroded by inflation although there is a strong case for implementing a port tariff based on a new pricing structure that takes into account the vast improvements and the revalued assets.

The inflation factor notwithstanding, we fully subscribe to the cardinal principle of free market mechanism that the charges are structured not only what the market can bear but the charges are reflective of the dramatic improvements and efficiencies in service levels recorded by Port Klang.

The revised rate also imposes a greater burden of responsibility on the part of PKA and the terminal users to justify that the revised charges commensurate with a higher level of service. We are confident of delivery higher quality and level of service as borne out by the accolades and recognition of excellence accorded to Port Klang by various agencies and port users more recently.

Best Wishes,


Datin O C Phang