The policy of shipping lines directing empty containers to be de-hired to wharf terminals and at-wharf receival facilities continues to increase. These policies will deliver significant cost savings to all shipping lines utilising these practices, however, their application has resulted in additional costs for container transport operators that should be recovered in the commercial marketplace.
Major foreign container shipping lines are now regularly dictating direct empty return to terminals across Australia include OOCL, ANL (CMA-CGM), Hamburg Süd and COSCO. Practices of the shipping lines and their container terminal stevedores differs in each Australian capital city port, but nonetheless create additional business costs for container transporters.
“While the cost drivers may vary slightly from shipping line to shipping line, port to port, and even stevedore to stevedore, the impact to container transporters is the same: a hit to an expense line in their P/L. That is not sustainable for any business,” observed CTAA director Neil Chambers.
CTAA companies have identified a number of situations where the significant additional operational costs are incurred, including:
- Empty container staging via yard: de-hiring directions to wharf facilities invariably require transport operators to ‘stage’ empty containers via their transport yard so that they can line up available time slots with their vehicles undertaking wharf work. The container lifts and administration involved in this staging activity is a significant cost burden for transporters as is the additional cartage leg required.
- Inability to backload: in some ports, stevedores work closely with transport operators to align import delivery slots with empty container de-hiring direct to wharf. However, in other ports and at some at-wharf return facilities that are separate from the container terminals, there is no ability to align the return of empty containers with import delivery slots. This results in an inefficient cost structure for transporters where backloads cannot be performed and therefore they must run trucks empty one way.
- Lack of flexibility in de-hiring location: in many instances when an alternative de-hiring location is requested for operational reasons, this is not forthcoming from shipping lines despite recent public announcements to the contrary.
Many empty container Pparks (ECP) that handle containers for nominated shipping lines are instructed not to receive containers that have been directed for wharf de-hiring. This lack of flexibility in de-hiring location adds to truck kilometres travelled and restricts the ability to achieve truck utilisation efficiencies.
- Empty container redirections with little notice: at the discretion of shipping lines and/or container stevedore terminal operators, empty containers destined for wharf de-hiring are redirected to other return locations. These sudden operational changes cause planning difficulties for transport operators who must readjust their fleet and job allocations at short notice, resulting in additional administrative costs, additional truck kilometres travelled, and potential de-hiring delays.
- Financial penalties imposed by stevedores: empty containers de-hired directly to the terminals are not booked using Containerchain but rather are booked through 1-Stop. As such, the current stevedore charging regimes mean that transporters run the risk of being penalised for no-show or wrong time-zone penalties imposed by stevedores, even related to the direct de-hiring of empty containers. These penalty regimes do not exist to the same extent at traditional ECP.
- Container detention delays: the added timing delays that can be caused by the need to de-hire empty containers to wharf may mean that the container detention time restrictions imposed by shipping lines may be breached.”
A new shipping line initiative to designed reduce their costs is, what the industry has dubbed, ‘empty return to ship’.
Mr Chambers explained: “As an example, Maersk is requiring some empty containers to be treated as export containers that must be delivered to terminals for designated ships and discharge ports. This involves the corresponding need for the transport operator to compete with full exports to book an export slot, and for transporters or their import / forwarder clients to complete an export Pre-Receival Advice (PRA) through 1-Stop Connections.”
“CTAA believes that the additional costs associated with this shipping line direction, including the costs of the completion and lodgement of the PRA, should be recovered by transporters in the commercial marketplace.”
CTAA has advised container transport operators to continue to ensure their true additional costs are clearly articulated to shippers (importers / freight forwarders).
CTAA believes it is up to shippers to seek corresponding reductions in the terminal handling charges (THC) levied by Shipping Lines to balance any cost shifting from the lines to the landside operators.