Liners add capacity to Asia-ECSA as ocean rates hit 18-month high
With Asia-South America ocean freight rates at an 18-month high of around $4,350 per 40ft, ...
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By Alex Lennane
Shipping lines have defended what shippers described as “insane” charges for ‘street turns’, claiming customers will ultimately save on costs.
Last week, shippers slammed the charges announced by ZIM, HMM, SM Lines and Maersk of between $40 and $75 for containers which are fully used in both directions.
However, a spokesperson for ZIM said: “ZIM is affording truckers of its cargo the option of street turn moves as this helps reducing congestion and emissions.
“The related charge is charged due to the additional logistic and administrative burden on the carrier. The trucker who is charged enjoys substantial savings from using this option.”
He added: “No charge is made to the cargo shipper.”
Maersk is offering a slightly different service from the other lines, by charging for street turns over its Avantida platform, automating what is otherwise a burdensome process, as shippers admitted. And it argued that the move would help it to manage its equipment inventory flows.
Maersk told The Loadstar it would charge “$30 for all approved requests received through the Avantida platform”, against ZIM’s $40, HMM’s $50 and SM Lines’ reported $75.
Maersk added that “any street turn performed, but not approved by Maersk, will be subject to a $100 fee for misuse of our equipment”.
A spokesperson for Avantida explained: “Avantida offers an online platform that facilitates, digitises and simplifies the whole process. The speed, accuracy and ease in which these requests are processed allows for a reliability and peace of mind that transporters will not easily have when having to request, process and follow up manually.”
A Maersk spokesman denied street turns reduced its own costs as well as port congestion: “This is not true. This platform will actually increase efficiency of street turns by providing instantaneous approval.
“It also allows us more control over which containers are being returned to the locations we need the equipment to flow to and to get the equipment to the customers asking for it.”
He added: “The main issue here is that truckers have been used to doing whatever they prefer with our equipment, without first asking our approval. Truckers are not allowed to re-use and load our equipment without our approval – this is designed to manage our container equipment inventory, balance equipment flows better and improve visibility.”
Comment on this article
chas deller
January 21, 2019 at 3:43 pmAlex – Do you know if the Street turn $ is for USA only or is it a Global fee ?
Chas
Alex Lennane
January 21, 2019 at 3:52 pmHi Chas,
According to Avantida, Maersk’s platform, in Europe the average fee for a street turn or triangulation ranges from 30 to 50 euros, depending on the country and shipping line. Maersk said that the charges outlined in this article are only for North America. HMM and Zin’s announcements were to “UIIA Motor Carrier Participants” – which I believe are US. Does that help?
Cheers
Alex
Theodor Strauss
January 21, 2019 at 3:58 pmThe Loadstar would do many a big favour to explain a ”street turn” more fully as I suspect that this container slang is different in the USA compared to elsewhere.
Alex Lennane
January 21, 2019 at 4:01 pmSorry! I’ll defer to the US Agriculture Transportation Coalition, which used this nice and simple explanation:
What is a “street turn”?
A ‘street turn’ is when a trucker and a container are fully utilized in both
directions, both out of the marine terminal, and back (as opposed to
having the container empty in one direction). One truck does a ’round
trip’, avoiding having two trucks, two trips to accomplish the same
thing.
Street turns:
reduce trucks in port areas and on highways
reduce congestion,
reduce fuel used,
reduce emissions
reduce demand for containers and chassis, which are
often on short supply,
reduce costs for exporters, importers, ocean carriers
I hope that helps.
Chris Locher
January 21, 2019 at 5:47 pmAn important point is the fact that when a trucker street turns a container, it saves the carrier gate charges, lift charges and storage charges at the carrier’s CY, because the CY never sees the box. Gate+lifts alone equate to at least $100 in service fees that are eliminated when a truck street turns a box. These cost savings more than offset any additional admin cost incurred by the ocean carrier.
The carrier receives as much benefit or more than the trucker, yet the carrier wants to charge a fee to enjoy said savings.
A simple “thank-you” would be more appropriate!
Joris Willems
January 22, 2019 at 1:21 pmWhere I fully understand this reasoning, many seem to overlook/ignore that it is the shipping line’s container that enables cost savings with the hauliers. From that perspective, carriers believe that they are entitled to a slice of those savings since they were done on the back of their assets/investments.
That said, pointing towards admin costs as a reasoning is ridiculous from a carrier’s perspective as in fact, they are saving on admin by implementing an automated solution… For the Lines, this is effectively a double-whammy.
All in all, Shipping Lines have been benefiting from savings in CY costs (handlings/storage) for decades and are now trying to increase their share of the overall end-to-end savings that a street-turn (or triangulation) brings to the supply chain. That money is coming out of the hauliers’ share and they are now forced to recalculate whether streetturns make sense….or whether they should return the box to the Line’s depot (and therefore significantly increase the end-to-end supply chain cost for all, yet mostly for the Line)