The additional costs associated with the return of empty containers direct to stevedore terminals are being scrutinised by container transport operators in Melbourne with a view implementing measures to recover these costs in the marketplace.
The policies of many major Shipping Lines dictating direct empty container de-hire to stevedore terminals in Australia rather than to designated Empty Container Parks (ECPs), and some stevedore empty container truck receival and processing practices, are causing these additional logistics costs.
Major foreign container Shipping Lines who are now regularly dictating direct empty return to terminals across Australia include OOCL, ANL (CMA-CGM), Hamburg Süd and COSCO. From today (1st February 2018), the largest container Shipping Line serving Australia, Maersk Line, also commenced its container terminal return policy – see: HERE.
In comparison with other Australian ports, in the Port of Melbourne some stevedore practices in receiving direct empty de-hires can be characterised as extremely “transport unfriendly”.
In the Port of Melbourne, the additional costs are caused when there is:
- A lack of available container slots for the return of the empties to the designated stevedore terminal (day shift & night shift);
- The need to stage empty containers through transport yards due to the lack of available terminal slots, including the costs of additional container lifts and yard storage;
- Additional truck kilometres travelled;
- No ability to backload full import containers (i.e. not being able to achieve two-way truck running by returning empties in conjunction with import container pick-ups) due to the operational practices and vehicle booking system restrictions of the stevedore;
- Longer Truck Turnaround Times (TTT) at the stevedore terminal in comparison to ECPs;
- No show & wrong time zone penalties imposed by the stevedore on transport operators for empty returns when no such penalty regime applies at traditional ECPs;
- Additional administration costs, including in some instances the costs of administering the production of a Pre-Receival Advice (PRA) message for container receipt into the terminal; and
- The greater chance of Container Detention charges being levied by Shipping Lines for the late return of the empty containers due to the operational delays.
Consequently, container transport operators in Melbourne can no longer commercially absorb the additional costs. CTAA strongly believes that there is a need for genuine cost recovery to ensure business viability.
CTAA stresses that not all of these inefficiencies apply to all stevedore terminals in Melbourne, and we thank those terminals who do work closely with transport operators to ensure timely empty container de-hire slot availability, the ability to backload (i.e. take in empties when the truck is manifested to pick up import containers), and have acceptable truck turnaround times.
Transport operators need to ensure that the true additional costs of the direct wharf de-hire policies of the Shipping Lines, and the operational practices of their stevedore providers which can exacerbate the additional costs, are transparent to shippers (importers / freight forwarders).
Ultimately, shippers will need to have commercial conversations with Shipping Lines and choose Shipping Line services that minimise these additional landside logistics costs.
Further update…
Direct Empty Container Dehire to Wharf
Forwarders expect cost increases of up to $200
Last week, CTAA announced that additional costs associated with the return of empty containers direct to stevedore terminals were being scrutinised by container transport operators in Melbourne with a view implementing measures to recover those costs in the marketplace.
Transport operators in Brisbane and Fremantle are considering similar cost recovery mechanisms.
Today, the Daily Commercial News (DCN) reports the Customs Brokers and Forwarders Council of Australia (CBFCA) acknowledging that costs could increase “between $80 and $200 per container to existing transport and delivery costs“.
As stated last week, container transport operators cannot commercially absorb these additional costs. CTAA strongly believes that there is a need for genuine cost recovery to ensure business viability.
Transport operators need to ensure that the true additional costs of the direct wharf de-hire policies of the Shipping Lines, and the operational practices of their stevedore providers that exacerbate the additional costs, are transparent to shippers (importers / freight forwarders).
It will be up to shippers to seek corresponding reductions in the Terminal Handling Charges (THCs) levied by Shipping Lines to balance any cost shifting from the Lines to the landside operators.
Further updates to follow in next newsletter