Port employs discount package deals to lure more cargo
By Victor Cruz
With an eye on capturing more international trade and staying competitive with other East Coast shipping terminal services, the Port of Miami is expanding its use of business cost incentives.
Two high-volume shippers, Compañía Suda-Americana de Vapores and Columbus Line, that use the port but do not dock there permanently, have already benefited from discount rates for pushing large cargo volumes through Miami.
"The lines approached us and said, 'help us to keep our costs down and encourage us to bring more business to your port.' Then we said, if you bring more cargo we'll give you incentives," said Khalid Salahuddin, deputy port director.
Now any high volume shipper or group of smaller lines that unite under a single banner through a vessel-sharing agreement, can get lower charges if they can move more than 100,000 tons of cargo through the port.
"We're just streamlining the incentive-agreement process and making incentives available to more providers," said Charles Towsley port director.
For annual cargo that runs between 100,001-250,000 tons, lines pay out only 80% of the published charge for dockage and wharfage, he said, while for tonnage exceeding 250,000 lines pay only 70% of the list price, which is 19 cents a ton.
Port wharfage charges - which represent costs for handling cargo within the port - are determined variably, depending on the article, with some merchandise charged by the ton and others, such as automobiles and trucks, charged by the item.
Three more lines of 41 calling at the port's communal terminal have the muscle to move the required tonnage for the discount: Americana Ships, APL and the Mediterranean Shipping Co.
More lines are showing interest.
"Others like P&O Nedlloyd are growing and could apply," said Diane Camacho, assistant port director of finance administration services.
The Grand Alliance, which represents four lines of which Nedlloyd and Americana are two, that participate in a vessel-sharing agreement, is a strong contender for the discount, port officials said.
They said they dismiss potential losses for the port in the first years of the incentives, citing the anticipated increase of cargo through Miami.
"We are forecasting a net gain of upward of $1 million for the port budget in fiscal year 2002," Ms. Camacho said.
To get the discounts, the port counts tonnage accumulated since Oct. 1, 2000.