Bad weather, a reckless campaign of nationally coordinated industrial action, infrastructure upgrades of all kinds, and a pandemic, have all contributed to creating grave disruptions to Australia’s container supply chain. Particularly in relation to the management of empty boxes.
Although little can be done about most of these contributing factors, holding the country to ransom by disrupting the supply chain through a nationally coordinated protected industrial action is another matter.
Industrial action is meant to disrupt. The national campaign of industrial action is delaying ships, increasing costs and it is preventing container terminals from working properly. Unlike the other problems, which can be worked around, industrial action is particularly exacerbating and hindering the movement, storage and return of empty containers.
Ultimately, the solution is the evacuation of empty boxes from Australia.
Evacuating empty boxes
We understand that ocean shipping lines are ready and willing to bring ships to Australia simply to enable the export of empty boxes. We understand that shipping lines are now also trying to evacuate as many boxes as possible on ships sailing their standard rotation.
Normally, container terminals are efficient. But, currently, container terminals are prevented from handling extra ships and they are forced to work so slowly that ships cannot complete their planned container exchanges. As an example, one ship was due to evacuate 2,000 empty boxes from Australia but 500 empty boxes were left behind.
Because of the nationally coordinated campaign of protected industrial action, which will only get worse.
Disruption will intensify. Delay will increase. Costs will rise.
The solution is for government to intervene in this nationally coordinated campaign of protected industrial action.
International shipping containers belong to ocean carriers who loan boxes on commercial terms to enable the carriage of cargo. Container hire is a commercial matter between the shipper and the ocean carrier – it makes up part of the contract of carriage.
If a consignor or consignee hires a shipping container then is reasonable for a shipping line to expect the customer to return the container at the time it has contracted to do so.
Containers are an essential part of the supply chain. Without containers there is no carriage. So boxes must remain in circulation. Accordingly, shipping lines need containers returned so that they can continue to undertake the business of cargo carriage.
Typically, and in the most general terms, shipping lines may choose to loan out their containers at a daily rate. The line may decide to offer the first few days of hire at a zero rate and, thereafter, at a given number of dollars per day.
Ongoing container hire
Consequently, and noting it is up to the individual parties to decide what commercial terms they will accept, if an individual ocean carrier was to offer a blanket waiver of ongoing container hire charges or if it continuously zero-rated its hire charges, then there would be an incentive to delay the return of empty boxes back into circulation.
Ultimately, the speedy return of boxes back into circulation is to everybody’s advantage as it enables more goods to be imported and exported to and from Australia. That will increase business and employment opportunities for everyone in the supply chain and, most importantly, it enables the logistics industry to deliver vital goods to the end users: Australian businesses and families.
Shipping lines are in the business of having satisfied customers. If a shipper is experiencing exceptional circumstances in relation to the return of a shipping line’s container then it has the option of asking the carrier to discuss the situation. Shipping lines may well be willing to make determinations on a case-by-case basis and come to a reasonable arrangement with the shipper.