Empty Container Management and Fee Increases  – The Latest

The following is an update on the empty container management issues facing Australia; an issue that is quickly threatening to turn into a crisis. With thanks Container Transport Alliance Australia (CTAA) for their detailed update, an abridged version is below:

Empty container management is a vital component of the efficiency of any container port.  However, it’s facing many challenges at the moment; access pricing is skyrocketing, and the cost of managing empty containers through the supply chain is increasing.

Landside logistics operators bear the initial brunt of these cost increases, and ultimately they impact on import and export supply chain competitiveness.

Fees Continue to Increase

Recently, there has been a plethora of announcements in Melbourne, Sydney, Brisbane, Adelaide and Fremantle of significant increases in Empty Container Park (ECP) Notification Fees paid by road transport operators for truck arrival notification slots.

Trucks must have a notification slot to either de-hire an empty import container or pick up an empty export container from an ECP.  Otherwise, the truck will not be serviced.

A list of the recent announcements (as at 17 August), which can be downloaded HERE.

Prior to January 2019, ECP Notification Fees ranged between $11.00 (+GST) to around $20.00 (+GST) depending on the port and the ECP.  Taking into account the latest increases being implemented in early September, in less than two years, ECP Notification Fees will have increased in the range of 268% to 590%, with the highest fee now being $65.00 per Notification.

Some increased fees (but not all) have been accompanied by announcements of additional capacity, increased opening times, investments in new empty handling equipment, and some flexibility in truck arrival times around the booked time zone without financial penalty.  (Capacity issues are discussed in greater detail below).

Pseudo Infrastructure Fees:

Along with the significant increases in Notification Fees over the last eighteen months has been aggressive contract negotiations by shipping lines with Empty Container Park (ECP) providers in all ports.

CTAA estimates that prior to the beginning of 2019, ECP revenue generated from shipping lines for empty container services was circa $120.00 per container.  Today, ECP shipping line revenue is estimated to be closer to $80 per container.  In addition, the increased volumes of Direct Return of Empties (DRE) to stevedore terminals have impacted on traditional ECP revenue.

As stevedores apply ever-increasing and unregulated terminal access fees (infrastructure charges) to make up for lost revenue from shipping line contracts, now a sizable element of ECP Fees can be characterised as infrastructure/access charges so that ECPs remain competitive in shipping line contract negotiations.

ECP Capacity

Empty Container Park (ECP) capacity constraints have been most keenly felt in Sydney (Port Botany).
The congestion levels are obvious – see: HERE

Costs Hit Transport

Congestion at Empty Container Parks (ECPs), at stevedore terminals for Direct Return of Empties (DRE), and constant re-direction of empties between one facility and another have significant cost implications for container transport operators:

  • A lack of available container slots for the return of empties;
  • The need to stage empty containers through transport yards, including the costs of additional container lifts and yard storage;
  • Additional truck kilometres travelled – made worse by constant re-directions;
  • Longer Truck Turnaround Times (TTT), leading to the danger of the truck missing its subsequent time slot in another part of the supply chain and incurring penalties there;
  • Added risks of No Show fees and other penalty regimes;
  • Time delays which threaten the ability of transport operators to ensure that import empty containers are de-hired within container detention free times, and subsequent invoices from shipping lines to importers for container detention.
  • Added administration costs.

Improvements in empty container management efficiencies are more important than ever before, particularly given the significant increases in ECP Notification Fees, which become a cost burden for all in the landside container logistics chain. We encourage partners to be aware and work together to find a viable, sustainable solution for all parties.

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