Important Shipping Updates

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Update from 16 December, 2020

Melbourne Container Congestion – Critical

Congestion in Melbourne’s landside container logistics chain has reached critical levels, driven by exceptionally strong import volumes and a backlog of empty containers not evacuated from the Port of Melbourne by shipping lines.

October 2020 was a record month for total container throughput (full and empty) with 284,958 Twenty Foot Equivalent Units (TEU), 4.5% above the same month last year. In October, full imports were up 9.8% and full overseas exports were up 9.4%. Worryingly however, the evacuation of empty containers was down 14%. Container transport operators are now finding it exceedingly difficult to gain booking slots at some empty container facilities to de-hire import or pick-up export empties. 

This is coupled with a blow-out in truck servicing times at some empty container parks. Oceania Container Services (OCS) in Brooklyn has severe and dangerous truck queuing on public roads, sometimes over 2 hours in duration. Notification slots are not available for up to 48 hours due to restrictions placed by OCS Container Park on gate-in slot capacity, despite returning to pre-COVID operating hours of 6am to 10pm weekdays.

As of today:

·     OCS have no slots remaining for the next 48 hours and continue to offer significantly reduced slots when they do offer capacity

·     VICT have no direct dehire pools open

·     Medlog have no slots available for the next 24 hours with minimal slots being released due to yard capacity issues

·     ACFS is booked out for 48 hours

Why Aren’t Enough Empties Being Evacuated?

It is likely that as shipping lines try to clear the backlog of empty containers in Sydney, vessel space is diminished to evacuate empties from Melbourne. Melbourne also cops the “double-whammy” unfortunately as when the vessel rotation is Melbourne before Sydney, the vessel is still laden with Sydney full imports, meaning less space is available to uplift Melbourne empties. Alternatively, if the port call rotation is Sydney before Melbourne, the vessel has been loaded out with Sydney empty evacuations ahead of Melbourne empty evacuations creating further congestion in Victoria.


Major Quarantine Delays

Processing times at the Department of Agriculture have been delayed significantly after recent interceptions of Khapra Beetle at the border. The Department advises that they have diverted a number of staff to the emergency response, in particular to inspections and treatments that are required at a number of locations around the country.

As a result we are seeing document processing times being heavily impacted with Quarantine directions now being provided either on or just after ETA. Further to this, BMSB and inspection releases are now heavily delayed after treatment results have been submitted to the Department.

Treatment facilities have begun refusing accepting new containers as they await results on over 100+ containers currently on hand that have completed fumigation and results submitted awaiting quarantine release.

We are continuing to monitor the situation and will provide further update as the situation progresses.


Update from 3 December, 2020

Empty Container Park Issues Update – Detention concerns 

As the Empty Container Crisis in Sydney continues to cause issues, several major transport carriers have now come out refusing to accept detention costs in any form, even if Empty Containers are notified within the standard 72 hour period.

Some Empty Container Parks are opening and then closing their gates within the space of just a few hours as they quickly reach capacity levels each day. As a result, trucking carriers have been forced to spend thousands of dollars each week leasing extra hardstand space to store empty containers until the ECP’s can accept them again.  

The extent of the container imbalance is estimated to be 75,000 TEU currently sitting in Empty Container Parks and transport operator yards throughout Sydney. If a sweeper vessel averaged 3500 TEU, it would require over 20 dedicated sweepers to clear the backlog.  This would take 5 months to clear if a sweeper vessel was deployed on a weekly basis, without accounting for additional trade imbalance and assuming terminals could handle the additional tonnage and container exchanges. 

In worrying signs, several more ECP’s in Melbourne are now beginning to fall victim to the same fate as Sydney’s. Due to the continuous effects of congestion in Sydney, shipping lines have been directing resources to clear the Sydney backlog of containers leaving less space available to remove containers in Melbourne. This, coupled with the strong import volumes due to peak season and Black Friday sales have resulted in an influx of containers and no space left on vessels arriving from Sydney to clear out the empty containers.

Importers are urged to accept and unpack containers as early as possible to give carriers the best possibility to dehire before detention fees are incurred. 


Shipping Documents 

As shipping volumes continue to rise, it is important to remember that suppliers must provide customs clearance documents within the set timeframes listed below. As suppliers no doubt fall victim to the pressures of increased volumes as well, we are seeing the impact of late documents on the clearance times for importers who are already struggling to receive, unload and dehire containers within the allowable free times.

Please ensure your suppliers are providing all commercial documents within the below timeframes to avoid any Late Documentation Fees and ensure your shipments are cleared early to allow express collections from the wharf:

• Origin Europe – 10 Days after Date of Departure.

• Origin Americas – 8 Days after Date of Departure. 

• Origin China – 5 Days after Date of Departure.

• Origin New Zealand, Singapore and Pacific Islands are required immediately after departure.

• Airfreight documents are to be received before departure from Origin.


Terminal Handling Charges / Infrastructure Fees

While the ACCC’s Container stevedoring monitoring report 2019-20 clearly shows that stevedore ‘Quayside’ charges to shipping lines are declining, overall stevedore profits are increasing primarily due to an increases in ‘Landside and other’ charges (such as the Infrastructure Surcharges).

These savings are not being passed on by shipping lines with a commensurate reduction in Terminal Handling Charges (THC). In fact, in addition to record high freight rates, we are witnessing some shipping lines continue to increase their THC. Industry bodies continue to put pressure on the ACCC and examine all legal options to curb the uncontrolled increase in costs by shipping lines and stevedores. 

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