Sunday 21st Oct, 2018

INDUSTRY OPINION: Shipping line sets a benchmark in container detention policy

Photo: Ian Ackerman
Photo: Ian Ackerman

MAERSK Line are issuing extra import and export container demurrage and detention free days in recognition of the limited working hours during the upcoming year end public holiday period – will other shipping lines follow?

This is encouraging news for the international trade sector.

It leads us to the question about what is the primary purpose of container detention fees. Up until now it has appeared to be a valuable revenue stream for shipping lines in a challenging and highly competitive market. An incredibly frustrating issue to communicate to shippers and what appears to be a generally unfair commercial practice, is that many shipping lines start the detention clock from vessel discharge, as opposed to container availability.

Shipping lines will continue to argue that penalties apply for the late return of containers to nominated empty container parks as a discipline on importers and intermediary service providers to ensure that shipping lines have timely access to all equipment.

While some empty container parks are increasingly extending opening hours, we are still to see full utilisation of week-end services. Why don’t shipping lines contract and fund empty container parks to open longer? Why do many of those empty container parks that do open week-ends resort to charging higher week-end booking fees? A cynic may argue that this would cost shipping lines more and may jeopardise the quantum of their container detention revenue if it was too easy to return containers.

The result is that transport operators are increasingly faced with the predicament of “staging” container returns to empty container parks with double-handling costs and increased truck movements. In most instances, costs are being passed on to shippers.

Now let’s throw public holidays into the mix.

It is our understanding that for most shipping lines detention policies remain hard and fast without extended time periods to return empty containers to allow for the fact that most empty container parks are closed during the upcoming Christmas and New Year period.

We expect that most shipping lines will say that they will consider situations on a “case-by-case” situation. We urge industry to liaise early with shipping lines should there be a likely impact of a delay in container return beyond contracted free time availability. We also suggest that you copy in Freight & Trade Alliance (CC into any correspondence so that we can monitor operational impacts and work towards fair operational outcomes.

Ultimately, the best way to achieve ongoing reforms is through commercial pressures. In an environment whereby shipping lines may look to offer more reasonable container detention policies, importers and freight forwarders will increasingly look at these alternatives.

We look forward to other shipping lines following the Maersk lead and would be delighted to showcase their services as a part of a new paradigm in servicing industry needs.

Paul Zalai is director at Freight & Trade Alliance (FTA) and an advocate of the freight and trade sectors.

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