Congestion cost and pricing of seaports

Wharf facilities which are constructed and administered by public authorities of seaports are regarded as social overhead capital. Since the services that they furnish are not brought to the market, the optimum distribution of services from the viewpoint of social benefits is difficult to quantify. Specifically, ships arriving at a port inevitably bring about external diseconomies resulting from congestion in a port. Evidently, it is important to decrease or eliminate such external diseconomies. In this study, a port with public wharfs which handles general cargoes is treated; and the congestion at a port is analyzed both from economic and engineering points of view. Furthermore, preliminary examinations are made of the method for determining the optimum degree of usage of the wharf facilities, and the method for realizing the optimum degree by means of an adequate pricing system.