Chile: Port congestion and efficient rationing in cargo transfer operations

Abstract

No pricing system is likely to be able to do away with congestion in port cargo transfer operations at peak times, since port use is determined not so much by seasonal factors as, first and foremost, by the simultaneous arrival of vessels, which results in rationing. This article shows that rationing, to be efficient, needs to go by the value of the cargo transferred rather than following a first-come-first-served rule. It demonstrates that efficient rationing gives priority to containerized cargo, followed by break bulk cargo, with bulk cargo in last place. These findings are applied to cargo transfer at the San Antonio Terminal Internacional franchised port in Chile.