The operational expenses of empty container management are growing. As a result, transport firms in Sydney are feeling the negative impacts of this problem. Their financial efficiency is not looking great.
The Container Transport Alliance Australia (CTAA) is speaking out on this important issue. The organization is a national association of container logistics companies. They released a press release in July 2018 to air their grievances.
According to them, problems come from the shipping companies’ poor business practices. The lower productivity of several empty container parks in the city is also a factor.
Issues
The Director of the CTAA, Neil Chambers, raised concerns about the data flow. Shipping lines and sea container transportation businesses do not exchange such data.
CTAA pointed out that only around 6 out of 10 empty containers in Sydney follow rules. Not everyone has their Electronic Data Interchange (EDI) in the system. This is much lower than 8 out of 10 in Melbourne and 9 out of 10 in Fremantle.
EDI, or Electronic Data Interchange, is a shipping and freight industry communication protocol. It is like IP or FTP in consumer systems. EDI allows systems to send and receive information on shipping containers.
The system can do this if the information is already encoded in the system. This data can comprise a shipping container’s identifying data and its contents. It also includes the tracking or shipping information connected with a specific shipment.
EDI’s design can handle huge volumes of data. These can then be exchanged among shipping lines, ports, and shippers and receivers.
Without EDI, the process takes a much longer time. Ensuring that a shipping container passes through hassle-free becomes more challenging. Instead of an automated procedure, those in charge will process and encode a truck’s information. Before they are ready to transport, truck drivers still need to look for all the correct details about their shipments. The staff of empty container parks will also manually process extra information for both the containers and drivers. A well encoded EDI will have eliminated this long winding process.
According to Chambers, “There are two major shipping lines that don’t provide any data about empty containers. These are OOCL and Evergreen.” He also stated that others provide the information less than 40% of the time. These are COSCO (Five Star Shipping), Ocean Network Express (ONE), and Hyundai Merchant Marine.
“We’d like to see a commitment from these shipping lines and the others. They should try to increase the EDI exchange of data. Information on empty container return instructions in Sydney should be 100%,” Chambers added.
Spaces
The declining performance of DP World Logistics Australia concerns CTAA. Their container parks 1 and 2 at Port Botany proves their case. The disappointing performance is due to an increase in the number of empty containers transported to the site by shipping lines.
Shipping firms have also continued to transfer shipping containers to Sydney ports. They also do this on vacant container parks on short notice. Sydney receives an average of 85 redirection notifications each month. This is double that of Melbourne.
Empty container parks in Sydney suffer large performance losses as a result. CTAA cited a recent reduction in the container movement speed of the DP World Logistics parks. They now perform roughly half of their initial capabilities. This is due to their limited storage space.
As a result, transportation companies need to stage empty containers at their facilities. They have to wait until they can transfer them to their final destinations. This, of course, leads to further problems. There are delays and increased expenses that the operators must bear on their own.
Of the issue, Chambers stated, “This occurs because shipping lines want empties returned to specific places. This includes railhead facilities for export use and direct return to the wharf.”
“This saves the shipping lines their costs of handling empties through traditional empty container parks. It handles the cost of repositioning the boxes themselves. The difficulties for transport operators arise because little notice of these redirections occurs. Transport operational planning has become a lot harder. Futile truck trips occur when containers are rejected from their original return location if the redirection notice is missed or is sent at the last minute,” he added.
Risks
Delays due to lack of spaces on container parks and redirections cause a costly issue. The imposition of container detention fees. Container transporters pay these penalties when empty containers do not arrive on time.
This costs a lot for container transporters. In regular times, they would count this problem as negligible. But current difficulties complicate their troubles and add further delays to their operations.
CTAA claimed that the delays are because of shipping companies. These are beyond their control. According to Chambers, “Transport operators need to reinforce their business rules with customers. They should enforce rules about adequate notice of containers being ready for return. This takes two days.”
He added that operators should not accept any container detention claims caused by delays beyond their control. Their group believes that stakeholders must seek extensions when they foresee delays.
To solve the issue, he said that the companies under CTAA will meet with DPW Logistics. They will also invite empty container parks companies and shipping lines through Shipping Australia Limited (SAL). First on the agenda is finding creative solutions amenable to everyone. They are also in touch with the NSW government as well as their ports.