1. Introduction
Maritime transport is vital to global trade, with over 80 per cent of global trade being carried by sea. Ports play an important role in this system, acting as interfaces between maritime transport and other modes of transportation. They also support important supply chain services, such as customs processing, container depots, and other logistics functions [
1]. Unlike shipping, ports are closely linked to their location and the state or country in which they are located. The state plays a significant role in keeping ports sustainable by setting up a supportive regulatory framework. In addition, the state also has certain responsibilities, such as the management of public waterways and the fairways connecting ports [
2,
3].
The state charges fairway fees to ensure maritime safety. Depending on the country, this can mean managing and maintaining public fairways, navigational signs and structures, and information systems, as well as providing icebreaking services. As a rule, all costs of maritime transport incurred to the state are covered by a special due, the fairway fee, collected from the fairway user, the vessel, e.g. the shipowner [
4]. In reality, this is not always the case. Fairway fees have long been calculated based on a vessel's size and, in northern regions, its ice class. Ships with higher ice classes can navigate icy waters without icebreaker assistance and receive lower tariff rates [
5].
The state may also implement policies to achieve certain objectives [
6], e.g. climate goals. In the case of fairway fees, the state can encourage shipowners to use more environmentally friendly vessels by introducing environmental performance indicators as a component of the fee. However, the state's role is not limited to this. In the event of abrupt changes in market conditions, the state can support shipping companies by reducing fairway fees, as seen in Estonia's response during the COVID-19 pandemic [
5,
7]
A pricing strategy of fairway fees can focus on one or many objectives. Strategic pricing objectives can include profit maximization, throughput maximization, job creation, fostering economic activity, supporting regional development, reducing vessel turnaround time in ports, and promoting trade [
8]. These objectives, while beneficial, may also conflict with each other, adding a layer of complexity to the maritime industry. Pricing systems should be transparent, durable, cost-effective, easy to operate, and straightforward to understand, with the ideal goal of comparability across ports [
1].
This article compares various port and fairway fee strategies. It analyses port and fairway fees on vessels in seven major Baltic Sea ports of four countries: Estonia, Finland, Latvia, and Sweden. The selected ports are Tallinn and Sillamäe in Estonia, Riga and Ventspils in Latvia, Helsinki and HaminaKotka in Finland and Stockholm in Sweden. We examine how well the general principles of port pricing are applied in real-world port strategies. Charges for stevedoring operations, bunkering and other stock replenishment are not covered by this article.
The research questions are:
What are the port and fairway fees in the case countries with selected vessels?
How are the port and fairway fees structured in the case countries?
Is there a general structure of the port and fairway fees used by the countries?
This paper is organized as follows: The second chapter discusses the principles of port pricing, followed by the principles of fairway fees and charges levied on ships. The third chapter presents the structure of port fees in the ports under review, shows which vessels were used for the calculation of port fees and the port fees by type of vessel. The final chapter analyses and discusses the results of the study and gives ideas for further research.
4. Discussion
There is no uniform policy in various countries on how the port fees are collected. Different countries have developed their own systems, with different ports collecting port charges with the same name. In addition, some fees can be collected on governmental level, while others on port level. Usually, on a governmental level, fees are set and collected by public institutions. Other fees are usually set by the port authority or company that is providing the specific service. However, these other collected fees can be set by law as well. As is done in Latvia, where the “Law on Ports” states which fees port authorities may charge [
47]. There may not even be a uniform approach within a single country. For example, Estonian ports collect fees for the same purpose with different names and calculation criteria. The latter is especially the case for Estonia's smaller ports, which are not covered in this article.
Comparing port fees between ports in different countries is complex. Ports use different principles and criteria for different ships and different goods. If previously the fees were differentiated mainly according to ship types, goods, and certain characteristics of the ship (e.g. ice-class), then due to greater attention to environmental protection, the differentiation of port fees according to the environmental indicators of ships is starting to be more and more widely used. This diversity of criteria in port fees calculations supports Meersman's [
48] argument that port prices involve a complex set of decisions, including discounts, adjustments, and rebates.
Comparing port fees for specific ships and goods provides insights into fee structures but not operational cost differences between ports, as these depend on turnover and investment needs. Ports with lower volumes may deprioritize certain segments, which is reflected in their fee structures. Port fees should be assessed across segments, as competitive dynamics vary.
For cruise vessels, ports like Helsinki, Stockholm, Tallinn, and Riga often serve the same Baltic Sea roundtrips. Ro-ro and container ports primarily handle import-export flows, limiting competition. However, ro-ro vessels may compete with ro-pax vessels for certain flows. In the Baltic container market, cargo destined for one country may be unloaded in another and transported overland, as seen with containers destined for Estonia being offloaded in Riga or Klaipeda.
Bulkers and tankers previously faced intense competition for east-west transit flows (e.g., Estonia, Latvia, Russia, Lithuania) driven by global demand for dry and liquid bulk. These segments provided additional revenue but posed higher environmental risks. Due to the Russian war and sanctions, these cargo flows have largely ceased.
Port and fairway fees follow a general pattern: Latvian ports have the lowest fees, while Finnish and Swedish ports are more expensive than Estonian ports. Similarly, fairway fees are highest in Finland and Sweden and lowest in Latvia. Discounts vary significantly: Swedish ports offer minimal reductions, while Tallinn provides notable discounts for cruise ships. Helsinki and Stockholm do not discount repeat cruise visits. Cruise vessels are subject to fairway fees in Helsinki and Tallinn, but since they typically operate in summer, ice-class fees are avoided. Stockholm’s high fairway fees are partly due to the low environmental category of some cruise vessels.
Fairway fee calculations differ by country. Finland and Sweden base fees on net tonnage (NT), while Estonia and Latvia use gross tonnage (GT). Ice-class significantly impacts fees in Finland and Estonia, with high ice-class vessels benefiting from lower rates. For example, in Finland, fees for 1A Super ice-class vessels are 9.32 times lower than for lower classes, compared to a 1.25-fold difference in Estonia.
Sweden uses an environmentally driven fee system, offering up to €10,000 in vessel-based discounts in 2022. In 2023, updated principles tied readiness fees to environmental categories, allowing reductions of up to 90%. These environmental incentives demonstrate a clear push toward greener shipping practices (
Figure 6).
Our study highlights that fairway fees, regulated and collected by countries, are a key component of port pricing and serve as a policy implementation tool. In Sweden, fairway charges are based on a vessel's environmental performance, allowing more environmentally friendly ships with similar operational characteristics to pay significantly lower fees. In contrast, Estonia adjusted its fairway charges during the COVID-19 pandemic, initially exempting vessels from these fees and subsequently reducing them incrementally by 50%, 37.5%, and 15% [
51].
Port fees are typically justified based on costs, but various pricing strategies are employed. Infrastructure investments, such as fairways, are not directly allocatable to individual users, as the required investment and maintenance remain constant regardless of usage levels. For liner shipping, calculating the cost per voyage becomes complex with an increasing number of voyages.
Ports adjust discounts based on the specific characteristics of the routes, including voyage duration, frequency, passenger and vehicle volumes, and other factors. For instance, a passenger ferry making frequent use of fairways does not proportionally increase fairway maintenance costs. Consequently, discounts for higher numbers of visits are justified. These discounts not only reduce pressure on ferry ticket prices but also encourage greater utilization of ferry services.
Notteboom et al. [
1] emphasized that stable pricing development requires a stable environment. In cases of prolonged disruptions, such as significant changes in cargo flows or vessel traffic, a review of pricing strategies for certain cargo groups or service segments may become necessary. When pricing is cost-based, adverse long-term events that reduce traffic should justify adjustments, including increasing fees for other user groups.
Our study found no single unified strategy for port fees, nor a consistent structure for port and fairway fees across the studied countries. Port authority fees are primarily value-based, with tariff rates varying by vessel type or cargo (e.g., vessel fees, compulsory waste management fees). In contrast, specific services such as mooring and pilotage are typically cost-based. Notably, before the COVID-19 pandemic and the imposition of Russian sanctions, there was intense competition among regional ports to attract bulker and tanker trade.
Fairway fees, although named differently in each country, are designed to ensure maritime safety and are generally cost-based. However, long-term stability in fee structures can be affected by changes in vessel traffic volumes, potentially leading to cost imbalances. Fairway fees also serve as tools for state policy implementation. For example, Sweden incorporates environmental components into fairway fee calculations to incentivize the use of environmentally friendly vessels, demonstrating a long-term policy approach that aligns with sustainability goals.
Other countries have also adjusted fairway fees in response to economic and environmental challenges. Estonia's significant discounts during the COVID-19 pandemic represent a short-term policy adjustment aimed at maintaining shipping activity. Similarly, Finland halved fairway fees in 2015 to offset increased shipping costs from mandatory sulfur emission reductions. While this reduction has been extended several times, it is expected to end by late 2024, potentially making Finnish fairway fees the highest in our comparison [
52].
These examples highlight the role of fairway fee policies in balancing economic stability with environmental objectives. The integration of sustainability-driven incentives, such as Sweden’s differentiated fees, provides a model for encouraging cleaner maritime transport. Moving forward, harmonized approaches to fairway fee structures that reward sustainable shipping practices could enhance both economic resilience and environmental responsibility in the Baltic Sea region.
This study focused on Baltic Sea ports, offering insights into regional port pricing strategies. For future research, we recommend expanding the analysis to include ports in other regions and vessel types. For instance, comparing pricing strategies for large deep-sea container vessels would provide valuable insights. In addition, a case study on deep-sea container ports could reveal how international ports design and justify their port and fairway fees within a broader global context.