ECPs to take action on productivity

Date: 21.09.2010

Stakeholders reach agreement on reducing congestion and improving productivity in empty container parks

By Anna Game-Lopata | September 21, 2010

A meeting in Melbourne has given rise to agreement between port stakeholders to take action to reduce congestion and increase productivity in Empty Container Parks (ECPs).

Supply-chain players who comprise the Empty Container Park Operations Group met last week at the Port of Melbourne to examine issues and progress action plans for ECPs going forward.

Shipping Australia Limited (SAL), which had four representatives at the meeting is a member of the group.

The group also includes the Victorian Transport Association (VTA), the Custom Brokers and Forwarders Council of Australia, and each of the park operators, with the Port of Melbourne Corporation (PoMC).

Shipping Australia CEO Llew Russell says the meeting aimed to ascertain where ECPs are at in terms of facilitating operational improvements, transparency and developing a more flexible vehicle booking system.

"In our view the meeting achieved that purpose as a first step," Russell says. "ECPs have been a ‘forgotten link’ in the supply chain until quite recently.

"We’ve concentrated on productivity at the wharf, the intermodal terminals and road and rail terminals but we haven’t put enough emphasis on empty parks which constitute a vital part of the supply chain," he says.

"I think the general conclusion at the meeting was that the parks are keen to conform with chain of responsibility and fatigue laws, and they’re very willing to talk about extending or changing hours of operation to meet demand," Russell says.

According to Russell, one of the current problems is that ECPs do not have a clear picture of their demand at any given time.

"From hour to hour trucks turn up, the parks service them as best they can," he says. "When they have a large volume of trucks the parks can’t service them because they simply don’t have enough resources."

"We need to develop a system that addresses that problem."

According to Russell the contentious issue is not so much that of extending operating hours but how will it work in practice and who will pay.

"Extending operating hours, with the same volumes and operational arrangements isn’t going to achieve much except greater costs. It won’t achieve greater productivity," he says.

"We need a more flexible vehicle booking system, which is not to say we need one based on existing container terminal booking systems."

"We’ve never said we should take that model and apply it to empty container parks," Russell says.

"What we have said is that we should seriously look at a way to regulate the arrival of trucks at empty container park to improve the supply chain."

Russell says action will be taken on extending hours.

"There has been general agreement that parks will try to ensure operating hours are 6am to 6pm as a minimum," he says.

"While there is still a lot more work to be done in terms of the detail around this, there is an action plan to progress the issue before the next meeting," Russell says.

"What we'd like to see with empty container parks is more short term flexibility, so bookings can be changed within a few hours if necessary."

Russel argues the issue of demand and a more transparent booking system is tied up with ECPs utilising technology to achieve real time communication and information flow with the trucking industry.

"The more notice we can give to the trucking industry in terms of demand at the parks the better," he says.

"An internet based system will tell a truck that the parks are flat out all day today, but there’s a free window tomorrow at nine o’clock," Russell says.

"If someone is delayed or if there’s a sudden change there should be an opportunity to move bookings within a reasonable period.

"An approach where information is available on a website and provides the opportunity for the trucking industry to change its plans will be more workable for everyone."

"This kind of transparency and information exchange within the operation of ECPs will be essential to reducing congestion and is something that hasn’t happened to date.

"It will facilitate better operation of the parks to have a view of demand and it will help the trucking industry know they’ll be able to be serviced in a reasonable amount of time. "

According to Russell, most ECPs have contracted the Maximus ContainerChain solution, which will provide a park management system with visibility between the parks and other port operations.

"We hope to have the solution in place as soon as possible, and by next year at the very latest," Russell says.

"Shipping Australia hopes to engage in discussions about how to bring implementation forward in time for peak season which is beginning now.

"We’ll have a lot of imports starting to come in and with those we’ll see an increase in volumes through the ECPs.

"We’ve got the immediate problem of how to deal with it and I don’t think some of the
initiatives we’ve been discussing will be in place in time. However anything that can be done to bring them
forward will help."

Russell says the issue of who pays is a matter to be considered later and further negotiated with container parks taking a range of factors into consideration.

He points to the infrastructure levy already established by the ECPs which is currently being paid by shipping companies for every import container.

"The levy is being charged by the ECPs and paid by shipping lines as part of their operational improvement program," Russell says.

"What shipping lines want to know is where that revenue is going and what improvements are being made.

"Whether the infrastructure levy should be increased or whether there should be another type of charging mechanism is an issue for individual members to discuss with the parks."

Russell would not be drawn into a discussion about whether shipping line customers should be charged a levy saying this is strictly a matter for individual members.

"Shipping lines have an exemption from the Trade Practices Act to discuss rates and prices collectively to meet the requirements of Australia’s importers and exporters," Russell says. "But it only applies to intermodal terminals and does not extend to empty container parks."

Russell says his own view is that other kinds of funding opportunities for the development of ECP infrastructure should also be explored, given the importance of the parks to the supply chain.

"Fox example we’re looking into the possibility of increasing the revenues of qualified ECPs by getting them into the container depot business," Russell says.

"This means having full containers and a number of other services," Russell says. "It might require investment, possibly from state and federal sources, to make the changes in different materials handling equipment and so on, but may well have major supply chain advantages."

While Russell says there is currently no set date for the next meeting he says the Empty Container Park Operations Group intends to meet on a regular basis.

"There is a view that we need to get on with it and progress these initiatives as soon as possible from a practical point of view,"
he says. "As soon as we get some of the action items progressed there will be another meeting."