Forwarders eye closer ties with smaller box lines as the 'trade gap' widens
Forwarders are focusing on building improved relationships with smaller container lines amid deteriorating relationships with ...
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By Alex Lennane
Fiata has recommended forwarders don’t pay surcharges for containers that have not been cleaned or maintained, and that they charge shipping lines for any costs incurred as a result of poor quality boxes.
The fightback against container lines comes via a new “Best Practice” handbook, which argues that forwarders should apply more pressure on the lines, and ask for proof of maintenance when charged, rather than relying on “one-sided findings”.
Container Shipping and the Quality of Containers notes that poor box quality leads to supply chain disruption and higher costs, but despite increasing surcharges for containers, “the quality of containers provided by shipping lines … has decreased significantly”.
It adds: “One has to come to the conclusion that shipping lines are cutting costs in the maintenance of their equipment.”
It points out “it is the responsibility of the shipping lines to ensure that their containers are safe and fit to be used for the required purpose”.
It argues: “There is concern that shipping lines, as owners of the containers, neglect their duties related to the quality of containers for cost reasons and the forwarder is then considered responsible.”
Two surcharges in particular are outlined for criticism: container cleaning, and repair.
“Invoices by shipping lines for container cleaning charges have increased significantly. It appears that often such charges are not justified and charged with the objective to increase revenue. Usually, it is the consignee (or the appointed freight forwarder) who is exposed to such charges during the empty return of a container at the terminal/depot. The freight forwarders offering the empty return have often very little choice but to accept additional charges in order to avoid delays and delay-related extra charges.”
Fiata concludes that best practice in this instance is for forwarders not to pay surcharges for repairs or cleaning that has not taken place or is part of standard wear and tear, and to ask for proof.
“Freight forwarders should not accept such charges unless there is proof during the actual empty return of the container that: cleaning is necessary … pictures of the state of the container and the reason for the cleaning should be provided; the cleaning has actually occurred, ie documentary proof by the container depot.
“Above all, we highly recommend [forwarders] to insist on a joint survey of the container that is said to be improper. The merchant must have the right to verify the state of the container and should not be subjected to a one-sided finding of a shipping line.”
The document also outlines best practice for empty pick up and assessment of containers, and argues that any additional costs incurred through poor quality containers must be picked up by the shipping line.
“Should the container be unsuitable for the transport and not fulfil the required booking and specification, shipping lines should take full responsibility for their failure to comply with their obligation. Additional costs that may occur as a consequence related to extra trucking and other charges should be accepted in full.”
While it acknowledges the CTU Code as part of best practice, it adds that “shipping lines neglect their duties”.
You can read the document here.
Comment on this article
Martyn Benson
April 03, 2019 at 2:42 pmAfter more than 40 years in eight container liner operators I can safely say that FIATA and shippers/consignees only need to look themselves honestly in the mirror and ask themselves why the containers are dirty or damaged in the first place?
Could it be that many consignees use the container as a garbage basket to dispose of all their old packing material, tyres, hazardous waste, etc? Could it be that shippers are not securing cargo adequately such that packages shift and will cause bowing to sidewall panels? Could it be that nails used to block cargo are not removed after emptying? Could it be that consignees don’t clean or sweep any residues or clean the oil leaks left on the floor by their FLTs? Could it be that hasty pallet jacks and FLT drivers are banging the roof of the container or the sides in their rush to empty cargo………I could continue with a book of real world examples and, in my own experience a shipping line will usually give fair warning and advice before sending out the invoices.
Sadly, there are too many customers who abuse the privilege of a container usage and take no responsibility to return the unit in the same condition it was presented for loading. Remember, a shipper will reject a dirty or damaged box, so it is unlikely that a container will be damaged or dirtied by anything other than an external handling / stevedoring incident or by the last cargo user.