WE HAVE seen the increasing pattern of service providers, in particular container terminal operators and empty container parks, starting to charge (not to mention increasing them regularly) costs such as infrastructure levies and additional operational fees on transport operators.
Some of these organisations are now heading down the track of trying to separate quayside and landside costs so they can validate their reason for imposing these costs. Further the imposition of these costs on the transport operator begins a chain of handling through various parties before the costs actually gets to the importer / exporter and all these various parties add on administration fees which substantially increases the final cost to the importer.
Shipping lines –
should the contractor pay all costs under their agreements.
One has to ask why these fees are being levied against a transport operator when as we understand there are agreements, eg; liner service agreement with CTOs that engage the CTO/ECP to load/unload a vessel and deliver or receive cargo for same on behalf of the shipping line. If that is the case then the costs on managing that arrangement should fall to the shipping Line and they then in turn charge the holder of the bill of lading, importer or exporter, for that service.
Not only does that seem to meet the terms of an agreement between those parties but also minimises the possibility of extra admin costs being incurred through the charging of transport companies, and subsequent parties, being passed onto the importer / exporter.
So one has to ask are shipping lines driving the prices they are prepared to pay the CTOs and ECPs so low that they, the CTOs and ECPs, in turn have to find other avenues to manage overheads. If so, is that morally / legally correct.
Redirections – a shipping line benefit
Recent activities by shipping lines in making last minute changes (redirections) to where empty containers are to be delivered are also now incurring extra costs by transport operators.
- Extra mileage (especially an issue in larger geographical areas;
- Extra lifts at transport company yard;
- Additional management of vehicles and workloads;
- Loss of equipment to service import/export containers.
These are then passed on to their clients, especially in the larger ports where there is a wider geographical impact, when they have to hold over / re book at the new depot / face slot cancellation fees etc due to last minute changes.
Detention or relief
Again one needs to ask why these late changes, redirections, are being made and one obvious answer is “to suit the shipping line”. If that is the case why then does the transport company, and subsequent parties, have to pay these extra costs especially when some of these extra costs are “container detention fees” being paid directly back to the shipping line due to the late change and therefore the inability of the transport operator to return the empty within the allowable, usually seven days, free period set by that same shipping line.
The detention free period has reduced over the years, now mostly seven days, and is very much a variable between lines.
- Some periods start when vessel departs;
- Some start when last container is off;
- Some start when first day of availability is declared; and
- Most all include Saturday, Sunday and public holidays.
The increased BMSB biosecurity intervention also has an effect due to the inability of the inspection services to keep up with the increased demand for inspection bookings as the BMSB measures require.
Industry has experienced significant delays at unpack depots and fumigation service stations due to the increased intervention resulting in up to 20 days to clear cargo and return the empty container to the nominated empty park.
On the other hand, while the ABF Container Examination Facility intervention is minimal when containers are on legitimate border hold it can take longer to obtain clearance further limiting the opportunity for the return of empty containers.
Trying to obtain relief / extension of the period with shipping lines is not the easiest of tasks to perform as again in most cases the rules / guidelines they operate under are mostly applied by their owners overseas and on a global basis regardless of the operating conditions in each country.
Whilst the Customs Brokers and Forwarders Council of Australia Inc. (CBFCA) does not see that transport operators should incur these extra costs for shipping line inefficiencies / late decisions and then have issues trying to reclaim from their client’s we have had discussions with senior management at Container Chain (CC) to find a process that will assist transport companies / members in validating these extra costs / charges.
The solution however will require the Shipping lines to take some responsibility for their actions and make these changes within certain timeframes.
As the CBFCA understands the initial advice to the ECPs for dehire is also at that time entered into CC however the redirections, due to the very late notice are not, and it is not uncommon for a transport operator to arrive at the dehire depot on the delivery order only to be told the dehire has changed and then he has to manage the extra work involved in making a new booking and possibly holding the container overnight.
The CBFCA in discussion with CC has been advised that the CC would be prepared to enter these re directions into the system to allow visibility to the transport operators but that to do this and for it to be effective for all the advice of the redirection would need to be received by the ECP / CC within 24 hrs.
This would allow the system to be updated and notice provided to the transport operator of the change and allow them to manage the correct de-hire point for their containers. It would also allow the transport operators or CC to take a snapshot of when the change came in and that would be evidence to the importer of the need for extra handling / changes.
In conclusion the CBFCA has and will continue to raise these issues not only with the parties mentioned above but also in meetings with port administrators, government administrations, service provider associations and the ACCC.
The shipping lines need to accept that their interest in the efficient handling of the cargo for their clients does not just centre on the ocean voyage. It includes the receiving / delivery and return of the containers.
We are not suggesting that businesses operate at a loss. Rather, what we are suggesting is that fees and the cost of doing business should be manageable by those who contract the work out and then charged to their clients. In that way costs can be controlled and not increased through unnecessary multiple administration fees being applied at various levels.