Shifting fee increase to burden exports

Oct 05, 2000
Jorgen Johansson

Today it costs between $319.2 and $617.2 to switch from one terminal to another.

"Shifting fees are common in all ports in the world, but it's usually not this expensive," Luns said. "In some ports there's a limited number of terminals one can shift between."

Luns said that as of Jan. 1 next year, half of the already existing canal fee will be added to the terminal shifting fee, and that this could affect the smaller terminals in the Riga port.

"The cargo will be concentrated to the bigger terminals," Luns said. "The smaller terminals will, to my mind, have to be more specialized in export to specific destinations." However, Luns had one more theory to offer regarding the small terminals, and what could happen if they were to close down.

"If the small terminals are closed down, the bigger ones can raise their prices," Luns said. "I believe that in the very end prices will go up on timber products exported from Latvia."

Luns said he had heard rumors that the shipping companies are talking about taking their business elsewhere in Latvia, for instance Liepaja or Ventspils.

"But then again, we're talking about a very small part of the total transports," Luns said. "Moving cargo across the country to Ventspils will still add more costs to the final price."

A large ship, carrying some 4,000 tons, picking up cargo in the port will dock at some eight to 12 different terminals before it's completely full. This means, with the new prices, a fee of $9,628.32 to $14,442.48 just for moving the vessel a few kilometers.

Lars-Erik Andersson, managing director at Wilhelmsen Terminal Ltd., said shippers will hopefully cut down the number of loadings in the port to fewer terminals.

"I don't believe I have seen anything like this anywhere in the world," Andersson said. "There's a lot of disturbances in the port right now."

Luns said the owner of the ship will be the one to pay the extra shifting fee, however, one should remember that in the end it is the consumer who has to pay, because the owner will want to make up for the loss.

"Normally, $600 per shifting is a common price in the major European ports," Luns said.

Janis Vanags, head of Riga Port Authority's economics department, refused to answer any questions whatsoever on this subject, saying he was tired of hearing the same questions over and over.

The Wilhelmsen Terminal Ltd.'s spokesman, Lars-George Hedlund, said some terminals will win and others will lose after the Riga Port Authority's new prices will be in force.

"We will probably come out as winners, because we have a terminal that shipping companies appreciate," Hedlund said. "I think the Port Authority is doing this because there is no order in the port right now. There are boats going back and forth across the port and they all need tugging."

Luns said Riga's Port Authority has to send its suggestions for changes in the port before Riga City Council for approval.

Harald Apogs, project manager in Riga's Port Authority's foreign affairs department, denied this.

"We are not under the municipality. We are not a profitable organization," Apogs said. "We only exist because of fees we charge the vessels."

Still, Apogs refused to say what will happen to the terminal shifting fee, instead he asked for understanding. "You must understand that Vanags is under a lot of pressure," he said.

Apogs did say, however, that the timber companies ought to organize their business interests in Riga's port.

"If they are loading up to 4,000 or 5,000 cubic meters in many different terminals, someone will have to pay for this," Apogs said. "They need to reorganize their businesses here. It's not that we don't want them here."

Apogs then took out a chart stating that Riga's Port Authority pays for 65 percent of the port's berth constructions and renovations. The rest is paid by private enterprises. The authority also pays for all the dredging in the port area.

On a map of Riga's port, Apogs showed where the authority plans to have timber terminals and where to have terminals dealing with chemicals.

A timber industry source said this is a way for Riga's Port Authority to gain control over what kind of cargo goes where in the harbor.

The Riga City Council did not manage to produce a single person willing to comment on any of the activities going on in the city port.

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