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US agricultural shippers and forwarders have lashed out at “insane” and “appalling” “huge mistake” by shipping lines, which will impose a “street turns” fee next month.
Carriers including Zim and HMM have announced that, from February 4, they will impose charges of between $40 and $75 for containers which are fully used in both directions.
Round trips, or street turns, reduce congestion, emissions, demand for container and chassis supply and cut costs. But, in an addendum to the Uniform Intermodal Interchange and Facilities Access Agreement sent out at the start of this month to motor carrier participants, Zim ruled that anyone wanting to deploy its equipment for an import and export booking, must obtain authorisation and pay a $40 fee.
In a similar addendum, HMM pointed to a new $50 fee, while SM Lines reportedly is charging $75.
Their customers are furious at what appears to be a backward step by shipping lines, which they say should be looking to reduce emissions and congestion.
The US Agriculture Transportation Coalition (AgTC) said: “The fees imposed on street turns must be one of the least constructive, poorly considered steps conceivable.
“It injures all, including the carriers themselves, by adding to congestion and delay, which already makes marine terminals at some of our largest ports the greatest challenge to the US export/import supply chain.
“Penalising street turns threatens one of the only measures available to shippers, carriers, terminals and truckers to address the unending congestion.”
Maersk has opted for a different tactic. It said today it would offer a street turn service on its Avantida online platform in the US and Canada, cutting “administrative hassle”.
Avantida said: “Through the automated request process offered by Maersk, dispatchers and planners requesting street turns will get an accurate, reliable response in a matter of minutes.
“So not only will they enjoy the time and cost savings of carrying out street turns, they will also benefit from a fully digital process and, undoubtedly, aid in reducing CO2 emissions as these efficiencies help cut unnecessary truck miles.”
Maersk will be charging a fee for the service, confirmed Avantida. “There is indeed a fee involved in the request to reuse an empty container on Avantida. This fee is deducted only when the street turn has actually been carried out. If the request has been declined by the shipping line or cancelled by the transporter (even on the day it’s to be reused), the amount will not be removed from their balance.”
One AgTC member said the new fees were “absolutely insane” and believed they would harm the lines’ business.
“We have a few carriers that make it very difficult to street turn containers, so we actually charge a premium to handle their imports and we give discounts to importers that will utilise the carriers that do make it easy for us to street turn.
“In the end, the ocean carriers that don’t want street turns will lose import business over this, assuming other truckers will charge accordingly.”
Another member agreed: “It’s appalling. It’s still not clear if the motor carrier will be responsible to pay the street turn fee, or if it will be added to the booking fees for the customer to pay. We know the shipping lines often tend to bill the motor carriers, so time will tell. Obviously this is a disincentive to street turn the carriers which have announced this fee: Hyundai, Zim and SM lines.
“This is just another revenue stream for the [box] lines. When the terminals are not accepting or restricting empty returns, it will increase per diem when we can’t in-gate empties. As you know, per diem is very difficult to dispute and get cancelled without tons of documentation. It’s a battle we continue to fight every day with every per diem invoice.”
Another AgTC member complained: “The extra key strokes the steamship lines have to do are the same as for many other things… everything is a manual process and they are just looking at another way to generate some revenue. This is absolutely wrong.”
One member pointed to severe congestion in Portland, Tacoma and Seattle and said street turns were very hard to implement, but when they worked they saved money, fuel, emissions and congestion.
“Ironically we ultimately reduce the cost on the line for “touching” the container fewer times. Think about that. We can do something one time for the cost of two times! There is no reason for shipping lines to charge the customer when they are saving money by our work in trying to utilise street turns.”
The AgTC is urging the shipping lines: “Ocean carriers would do well to understand the consequences of this, and other initiatives, before imposing them.
“We have offered to assemble a committee of some of the most well-informed, experienced shipper members of the AgTC, including exporters, importers, and truckers, to meet constructively with the carriers on this initiative.
“We are reaching out to port authorities, marine terminal operators, environmental organizations and government agencies to participate in this effort to prevent further deterioration of the ag export supply chain, which is already so challenged by the ongoing trade disputes with China and other countries, and tariffs imposed on our US ag and forest products exports.”
Zim Lines has been contacted for comment.
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Comment on this article
Henry GorskiJanuary 15, 2019 at 4:17 pm
On the street turn charges MSC have been doing this for years in the UK in the vain attempt to get the customers to use their own trucking operation !