Why Import Container Costs Keep Rising
The cost for import containers keep adding up as container transport operators are slowly being crippled by the increased prices. Reduced empty container park capacities, large quantities of container handling, and a high level of container re-directions are all contributing to the increase of handling costs in empty containers. The empty container situation in Sydney has worsened over the last few months and it’s gotten to the point where container transport operators cannot handle the additional costs.
A rough estimate of around $90-$200 per container are being carried by transport operators when managing empty containers. Depending on the additional handling and potential delays, the costs can be much higher. In here we’ll be discussing several key factors that contribute to the increased empty container costs in Sydney.
Added costs of staging empty containers through transport yards
At some key empty container parks (ECP) in Sydney, the prices for available truck arrival slots as well as the gate capacity come at a premium cost. The price is further increased when the ECP’s working hours do not operate regularly, especially during the weekends. This means that the majority of empty containers are staged via transport yards which yields additional cost through:
- Added yard planning and administration.
- Staging of containers (lift-on and lift-off)
- Increased truck mileage and one-way truck travelling with minimal backloading opportunities.
In most cases, transport operators cannot book enough truck arrival slots at designated ECPs on time. This can cause de-hire delays and the risk of attracting container detention fees from shipping lines are increased due to late return.
Redirection of empty containers without prior notice
One of the main contributors to the increased empty container management costs are the sheer volume of empty container redirections without prior notice. The redirections are ordered at the shipping line’s own discretion like for example Port Botany, which receives a high number of redirections on a daily basis. With around 30 redirections every day, Port Botany has become known as the ‘redirection capital’ of Australia. In comparison to Melbourne, the numbers are more than double which is why the prices keep increasing for empty containers.
Empty containers that are designated to one ECP are suddenly redirected to another, forcing transport operators to adjust on the fly and cause significant planning difficulties. These redirections happen because the shipping lines want the empty containers sent to another ECP for their next usage. By doing this, they’ll be able to meet rail export demands instead of the shipping line taking responsibility for the costs of repositioning empty containers in another date. The lack of prior notice cripples those within the containment logistics chain due to increased import container handling and transportation costs.
To make things worse, the lack of operational notice means that trucks with an ECP arrival notification are being turned down because of a last-minute redirection. This results in unnecessary truck mileage, wasted truck trips, de-hire time delays, and a bunch of different problems. Without sufficient redirection notice, container transport operators are burdened. Legitimate truck bookings at ECPs should be honoured and redirection should be reduced in order to properly address these issues and reduce empty container costs.
Shipping lines and ECP providers should allocate a 24-hour redirection notice and provide an accurate end date for the redirection of the empty containers. Shipping lines should also provide electronic data to their ECP providers so that allocators won’t have to manage and monitor redirection notices in a manual manner.
Unfeasible claims and container detention timeframes
Apart from the delays in effectively managing empty container import de-hires, shipping lines also do not provide an incentive to extend container detention timeframes to the importers. These time restrictions have a higher chance of being exceeded due to the increased delays and inefficiencies. Most transport operators require a sufficient business-day notification for import containers that are in line for empty de-hire.
However, some transport companies refuse to accept unrealistic container detention claims that have been passed to them by customers when de-hire delays are way out of their control. This issue can be addressed between the customers and the transport operators. It’s not necessarily up to the transport company to alleviate container detention fees and it should not be the transport company’s responsibility to pay any container detention fees in the event that de-hire delays are beyond their control or if unfeasible claims and timeframes were imposed.
It’s important that when delays breach the container detention policies, the customers of the shipping lines as well as the importers and forwarders should take action by:
- Ask for an extension from the shipping line in regards to the return of the empty container
- Request from the shipping line to allow the container to be de-hired into an empty container park with longer opening hours and more adaptable arrangements.
Many empty container parks in Sydney open for longer work hours. Being driven to convince shipping lines to direct empty de-hires in open ECPs will prevent importers, forwarders, and their transport providers from bearing the load of attempting to de-hire facilities that are full or operate on limited working hours.
Container transport operators are feeling the sting of increased import container costs. Sudden container redirections, staging of empty containers through transport yards, and unrealistic container detention timeframes all have an influence on the increased handling prices of empty containers. As soon as these issues have been addressed, the faster we will see the costs to start lowering down into a more manageable rate.