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Container transport body in Sydney costs warning

CTAA seeks solution to rising costs with rest of logistics chain

 

The commercial practices of shipping lines and the performance of some empty container parks (ECPs) in Sydney are causing significant cost increases in empty container management, according to advocacy group Container Transport Alliance Australia (CTAA).

CTAA director Neil Chambers warns that the “additional costs are causing major difficulties for container transport operators in Sydney, and need to be remedied soon”.

Its concerns are matched by those of the Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA), which describes delays as being “extensive” and “ongoing”.

CTAA sees the focus of immediate attention as being delays and a lack of operational capacity at DP World Logistics Australia Parks 1 & 2 in Botany Road, Port Botany.

Large volumes of empty container de-hires are being directed to this facility by shipping lines, including to meet rail demand for empty export containers.

“We are aware that DPW Logistics is recruiting, inducting and training more forklift and operational staff, but this will take several weeks to occur,” Chambers says.

“A facility of its size should be achieving at least 30 container moves per half-hour truck arrival window.

“However, their current operational capacity constraints mean that they are only achieving around 10 to 15 moves regularly.”

In an echo of burdens container haulage firms in the city faced at the start of the decade, transport operators are having to stage more and more empty containers through their own yards before being able to gain suitable slots for de-hire.

This is said to add significant costs to the transport task through:

  • added truck travel to and from yards, then separate later trips to / from the ECP
  • container lift off and on costs
  • added administration in managing time delays, fleet allocation, de-hire notification processing, and container detention avoidance management .

Chambers observes that “transport operators have become ‘satellite’ container logistics staging facilities, even for empties.

“Without this, the container logistics chain in Sydney would be dysfunctional. But, this comes at a cost with commercial consequences.”

Empty redirections, limited alternatives

Building on the pressures applied by intense competition for available truck arrival slots are the number of empty container “redirections” made by shipping lines and a lack of alternative de-hire options.

The CTAA charges that Sydney is the “redirection capital of Australia”, with an average of 85 redirection notices per month – double the number in Melbourne.

“This occurs because shipping lines want empties returned to specific places, including to railhead facilities for export use and direct de-hire to the wharf.” Chambers says.

“This saves the shipping lines their own costs of handling empties through traditional empty container parks and being responsible for the cost of repositioning the boxes themselves.”

“The difficulties for transport operators arise because little notice of these redirections occurs, meaning that transport operational planning has become a lot harder, and futile truck trips can occur when containers are rejected from their original de-hire location if the redirection notice is missed or is sent at the last minute.”

Some shipping lines also don’t allow any alternative de-hire options, which can restrict truck utilisation efficiencies, add to truck kilometres travelled, and contribute to facility congestion and truck queuing, he adds.

Lack of EDI flow of data

An increase in the flow of electronic data between shipping lines, their ECP service providers and the technology platforms such as Containerchain would greatly assist with information visibility in the container logistics chain, and would help to reduce landside costs, CTAA notes.

It says only 61 per cent of Sydney empty container movements have corresponding EDI data loaded into the technology platforms, compared with more than 90 per cent in Fremantle and 80 per cent in Melbourne for example.


 

Read about other transport tensions around Australian ports here


When electronic data interchange (EDI) information is lacking, allocators must process container de-hire electronic information manually, truck drivers must be supplied with paper or electronic versions of the delivery order, and ECP gate staff must process trucks and drivers manually.

“There are two major shipping lines that simply don’t provide any electronic information about empty containers — OOCL and Evergreen,” Chambers says.

“Several others provide the information less than 40 per cent of the time — Cosco (Five Star Shipping), Ocean Network Express (ONE) and Hyundai Merchant Marine.

“We’d like to see a commitment from these shipping lines, and the others, to try to increase the EDI exchange of data on empty container de-hire instructions in Sydney towards 100 per cent.”

Container detention liability

The current delays and inefficiencies in Sydney mean that there is more risk of the import container detention policies of the shipping lines being breached.

“Transport operators need to reinforce their business rules with customers about adequate notice of containers being ready for empty return — normally two working days — and should not accept any container detention claims caused by delays outside of their direct control.

Importers and forwarders should be proactive in seeking an extension of time from shipping lines for the return of empty containers when delays threaten a breach.”

Talks between the parties are expected to continue.

Shippers’ view

FTA/APSA focus is more towards ECP shortcomings but also sees container shipping lines as “doing little to facilitate an effective logistics process”.

“There currently seems to be little commercial incentive for shipping lines to change instructions and commercial terms with ECPs as they also collect additional revenue from detention fees incurred as a result of the late return of empty containers,” the FTA’s Paul Zalai states.

“In order to manage the task, many transport companies are being forced to become staging hubs for empties due to the above.

“This results in additional handling of containers and extra truck trips whenever a container cannot be taken directly from the unpack location to the ECP.”

 

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