Port Surcharges and Container Crisis Deepens

Australian freight and trade operations continue to head towards a crisis point as our industry finds itself not only paying the price of Covid-19 but facing an unacceptable backlog of surcharges and delays. The latest news from the Mediterranean Shipping Company together with the ANL, CMA and CGM is the announcement of another new temporary charge—passing the cost onto those who are unable to go anywhere else.

In response, the Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (ASPA) have decried the new charges, urging the government to intervene—not only to mitigate the negative impact on customs and forwarding but also to support the thousands of honest and hardworking Australian businesses that rely on efficient and realistic importing and exporting practices.

An abridged version of the FTA’s release can be found below:

MSC REJECT INDUSTRY’S CONCERNS

In response to yesterday’s Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) submission, the following two-sentence response was received from the Mediterranean Shipping Company (MSC) displaying a total disregard for customers’ needs:

“MSC has announced to customers that it is introducing a temporary charge to compensate for costs related to the widely-reported congestion and productivity situation at the port of Sydney. We thank our customers for their understanding and patience in relation to this and we hope that the port situation will soon return to normal.”

ANL, CMA AND CGM FOLLOW THE LEADER

Overnight, ANL CMA CGM released advice that they too have followed MSC’s lead and are also introducing their own ‘Emergency Port Congestion Surcharge (PCS)’ of USD 285 TEU effective 17 September 2020 for cargo from/to Sydney—applicable until further notice.  (US trade lanes to commence from 10 October 2020 – delay due to the US Federal Maritime Commission regulation that prescribes a minimum 30 day notice period for variation in surcharges).

ADDITIONAL OPERATIONAL PAIN AND COSTS

Add into the mix the disastrous situation of full empty container parks, re-directions, staging and transport costs. Incredibly, shipping lines continue to refuse to implement blanket extension container detention periods despite being at a loss themselves on what to do with the surplus containers that they have failed to evacuate.

So what’s their solution? Hit our exporters and importers with another massive unregulated surcharge—why not, no one in government seems to care…perhaps we can gain their attention again later today once they sort out what they are going to do with koalas!

FTA / APSA RESPONSE

The following are our initial steps in what will be an escalated campaign:

  • FTA / APSA have made initial contact with ANL CMA CGM this morning expressing disappointment in following the MSC lead (formal correspondence to follow) – like MSC, the introduction of the surcharge has been made without any industry engagement and with totally inadequate lead times;
  • FTA / APSA have escalated the situation to the Australian Competition and Consumer Commission (ACCC) to investigate any breach of competition law;
  • FTA / APSA will seek a ‘fast-tracking’ of the Proposed Class Exemption for Ocean Liner Shipping – as outlined in the FTA / APSA submission, a need exists for the ACCC to oversee shipping competition reform recognising its track record of strong compliance enforcement (particularly noting last year’s criminal cartel prosecution against a major shipping line for price fixing in relation to an unregistered agreement, resulting in an order by the Federal Court to pay a fine of $34.5 million).

CRISIS MEETING 

Finally, as members of the Ministerial led ‘NSW Freight & Logistics Advisory Council (FLAC)’, FTA / APSA have called for the next meeting (scheduled for Tuesday 29 September 2020) to be brought forward and to act as essential crisis meeting—preliminary advice from the council’s chair is that this request will be met with a likely meeting early next week.

HOW YOU CAN HELP

We encourage members (and clients of service providers) to come forward who are willing to go public on the impacts of the port operating environment on their businesses.

At ACF we continue to not only be one of the leading freight forwarding solutions in Australia, but we’re also committed to providing our customers will critical trade, freight and cargo updates. Keep checking in for the latest news.