Container Transport Alliance Australia (CTAA) director Neil Chambers says many industry players are facing the “hardest conditions they have ever encountered” with the supply chain placed under enormous strain from staff shortages, terminal congestion and significant competition to secure vehicle booking slots.
Chambers says container transport operators have tirelessly kept international container supply chains functioning with little fanfare over the past two years with COVID protocols to keep staff and customers safe, but the Omicron variant has changed the game.
“Container transport operators across Australia have reported to CTAA that they are experiencing between a 5 per cent to 20 per cent reduction in available staff, including heavy vehicle drivers, warehouse staff, forklift drivers, container unpack crews and administration, due to COVID infections and isolation requirements,” Chambers explains, noting in some extreme cases businesses have lost half their available labour.
“Compounding this are staff shortages at customers’ premises, as well as at international container stevedore terminals and at empty container parks across Australia, significantly delaying the movement of containers through the supply chain.
“As a result, transport operators are reporting operational capacity constraints, with transport yards operating between 70 per cent to over 130 per cent capacity.”
He says this is particularly acute due to the delays in customer deliveries, and the constant need to stage empty import containers through transport yards while trying to secure de-hire slots at clogged empty container parks or container terminals that have reached capacity to receive returns.
“The current supply chain delays and the severe impact of COVID infections seem set to continue well into 2022,” Chambers says.
“DP World Australia has notified industry that approximately 10 per cent of its workforce are impacted through either having contracted COVID-19 or are isolating at home with a positive case in their household. DP World says these numbers may increase as Australia works through the current COVID-19 wave.
“Vessel berthing delays at container terminals across Australia are still of significant concern, impacting all of the major stevedore companies. These delays are being felt most acutely in Sydney and Melbourne, with delays of between 2 up to 9 days, while a heat wave in WA is now affecting terminal productivity in Fremantle.”
This has led to terminal congestion and significant competition between transport operators to get vehicle booking slots before import containers incur storage fees, or to gain export slots to meet vessel cut-offs with no relief on the time constraints.
“Transport operators still only get three days to retrieve import containers from the terminals, and export receival periods can fluctuate wildly if vessels come forward in their port rotation to avoid congestion elsewhere, or are alternatively delayed from port arrival or berthing,” the container transport industry representative explains.
“Weekend work has increased to try to keep up with demand. But, this comes at a significant cost to transport operators in overtime and staging costs. Plus, the current COVID labour constraints and fatigue management rostering obligations really bite on driver and staff availability on weekends.
“Transport operators are trying to work with the container terminals to avoid import container storage charges. But, this is proving to be extremely difficult, supercharged over the Christmas and New Year period with shorter working weeks, staff availability and operating hours.”
He says few shipping lines are providing any relief to importers or forwarders from hefty charges for late empty returns, despite congestion at their contracted container terminals or empty container park providers being a major contributor to the supply chain delays.
“This pressure has been made worse with shipping lines transferring many international shipments away from contracted rates and conditions to “spot rates”, with the latter attracting stricter import container detention conditions unless the cargo interests can negotiate a different outcome … not easy in the current global shipping climate,” Chambers says.
“The lack of de-hire slots and capacity at some empty container parks or container terminals, and slow truck servicing times at these facilities, is outside of the control of transport operators. In many instances this makes it almost impossible for the empty container to be de-hired before container detention terms are breached.
“Shipping lines are racking in millions of dollars in container detention fees. Is this right if the incentive to return empty equipment in the dictated timeframe is nullified because the shipping lines’ contracted terminals or empty container parks don’t have the capacity to receive the de-hires or are closed?”
The CTAA plans to raise concerns about shipping line detention policies with the Productivity Commission (PC) which has been directed to inquire into the long-term productivity of Australia’s maritime logistics system.
““In summary, persistent import and export demand, coupled with the significant operational head-winds being faced, have many in the landside container logistics sector commenting that it is the hardest conditions they have ever encountered.” Chambers observes.
“CTAA continues to liaise with the Federal and State Governments and agencies about COVID testing protocols and isolation timelines.
“The ready availability of Rapid Antigen Testing (RAT) kits for critical supply chain workers is imperative, and CTAA welcomes the recent announcements that RAT tests can replace PCR testing to avoid the need for critical workers to queue for significant periods of time at COVID testing clinics and sites and then wait long periods for test results.”
In other supply chain-related developments, the Queensland Government has today removed the requirement for freight workers and truck drivers to provide a negative Covid-19 PCR test to enter the state.
“We have implemented a new F border pass for freight workers and truck drivers, which will still need to be completed to cross the border,” says the state’s Transport and Main Roads Minister Mark Bailey.
“Drivers must continue to monitor symptoms, and stay home if unwell, have tested positive, or have been deemed a close contact of a confirmed Covid-19 case.
“If a driver develops symptoms while in Queensland, they must immediately undertake a COVID-19 test and not continue their journey until they have a negative result.”