AN “insidious” consequence of the current shipping capacity squeeze is the potential for rising container detention costs on import and export equipment, Container Transport Alliance Australia (CTAA) has warned.
In a statement, CTAA said it understands major containerised forwarders and importers are being forced into the spot market to secure container import space on vessels rather than longer term contract conditions.
This includes accepting container detention terms and conditions which shorten the available “free days” before empty containers must be returned to the location designated by the shipping lines.
CTAA director Neil Chambers said, “Straight off the bat, this puts pressure on the importer and their transport provider to get the container picked up, unstuffed of cargo, and the empty returned in a clean condition to a nominated empty container park or to a stevedore terminal as a direct wharf return.
“Some major importers have had more generous agreements with shipping lines on container detention free days. However, as we have observed in the current shipping capacity squeeze, this is changing. The shock this will have on the landside logistics sector will be enormous as the volume of containers being handled will lead to more logistics delays and rising detention fee invoices,” Mr Chambers said.
“Landside logistics providers also continue to question how shipping lines can apply container detention fees when their designated return location is not open or is so congested that a return slot cannot be obtained in a timely fashion. This includes instances where some empty container parks are not open on weekends or public holidays despite those days being counted in the shipping lines’ detention free day conditions.”
Mr Chambers said empty container redirections ordered by shipping lines and empty container parks or container terminals add to landside delays.
“Redirections add to de-hire delays as transport fleet allocators and controllers need to ditch plans to transport the empty to the original designated de-hire location and secure a slot at the alternative location,” he said.
“Container transport operators are telling CTAA that the dwell time of import empty containers languishing in transport yards prior to being successfully de-hired is now between 1.6 to over three days and could get worse again like last year’s peak. That’s a lot considering that the container detention free time allowed by shipping lines is 10 days or less overall from time of container discharge.”
Mr Chambers said exporters are not immune from container detention fees. Exporters normally receive around 15 free days from collection of the export empty until its receival into the stevedore terminal for export loading onto a vessel.
“CTAA has received information of several instances where shipping lines have rolled export bookings (changed export bookings to subsequent vessels), yet have still automatically generated export container detention invoices payable by the exporter for holding onto the allocated export containers too long,” he said.
“Clearly in those circumstances it isn’t the fault of the exporter and their transport provider that the export containers have taken longer to move through the export logistics chain to final stevedore terminal receival. However, the administration time and cost alone in disputing these erroneous detention fee claims with shipping lines is debilitating.”
Mr Chambers said CTAA does not dispute that shipping lines have the right to impose container detention fees if shippers hold onto container equipment too long.
“Empty containers are the shipping lines’ assets, and of course shipping lines have the right to maximise the use of their containers to generate ocean freight revenues and to minimise their empty container stock levels commensurate with shipping demand,” he said.
“However, CTAA supports calls from forwarder and shipper representative bodies, notably Freight and Trade Alliance and the Australian Peak Shippers Association, for the federal government-led review of container shipping lines practices to and from Australia and the establishment of a federal regulator akin to the US Federal Maritime Commission, which is currently conducting regulatory activities into shipping lines’ container detention and demurrage practices.”