Wednesday, October 28, 2020

Stevedore Industrial Relations & Berth Delays:


LMF has received advice from Patrick Terminals that last Friday, 23 October 2020, the MUA provided undertakings to the Fair Work Commission committing to not organise or notify any industrial action against Patrick Terminals before 1 December 2020.

Additionally, the parties have agreed to meet for three days each week ahead of 1 December 2020 in an effort to reach agreement on a new enterprise agreement (EA).

Patrick has indicated that its focus continues to be to clear the backlog of container cargo in Sydney and Melbourne as a result of the MUA industrial action and work towards resuming normal operations, prior to the possibility of further protected industrial action by the MUA after 1 December 2020.

Reportedly, berth delays in Melbourne have reduced to approximately 5 days, while Brisbane and Fremantle are back on track.  Patrick advises that delays in Sydney are also reducing with vessels now berthing up to 15 days off their pro-forma window (down from 20 to 21 days).

The Patrick Terminals' Update can be accessed: 

Wharf carriers in Sydney would be well aware of the industrial disruption at Hutchison's Port Botany Terminal on Friday and the changes to slot drop timings over the weekend which were subject to the outcome of continued enterprise agreement negotiations between Hutchison and the MUA.

Weather Delays:

Bad weather in Sydney over the weekend also saw vessel operations suspended, and terminal operations are yet to recommence on day shift, Monday 26/10.
High winds and swell at Port Botany are forecast to continue over the next approx. 32 hours - further vessel delays are expected impacting on import container availability at all terminals.
Patrick Terminals reports that the Port Authority of New South Wales suspended pilotage from Monday 26/10 0600hrs due to the weather conditions. As of Monday 26/10 0900hrs, NSW Port Authority advised that pilotage has been suspended until further notice and that an assessment of conditions was to be conducted at 1200hrs, 26/10.

Empty Container Congestion & Container Detention Demands:

Empty container management in Sydney is still in deep crisis.  

At the end of September, Loch M. estimates that there were over 44,000 TEUs (Twenty-Foot Equivalent Units) surplus in the NSW supply chain that had not been either issued to exporters for export use or evacuated as empties through Port Botany.

While official figures for October are yet to be published, and while shipping lines have been attempting to evacuate empty containers on vessels while stevedore terminal protected industrial actions are on "pause", it is expected that the 44,000 TEU deficit will not have been reduced dramatically due to the high level of containerised imports.

As a result, empty container parks in Sydney are still extremely congested and effectively operationally full.  There are numerous examples where certain types of empty containers for certain shipping lines are not being accepted for de-hire at any Sydney ECP.

This is having very negative impacts on Sydney container transport operators, as they continue to incur added costs in extra truck kilometres travelled, empty container staging through yards, excessive container "re-directions" and time delays in de-hiring empties.  These added costs are conservatively estimated by Loch be in excess of $200 per container.

Worst still, the empty container bottlenecks in transport yards are now beginning to impact on the operational efficiency of transporters being able to collect and deliver more import containers to clients.

Container Detention Demands:

In the mist of this crisis, and despite them acknowledging that there is no de-hire location for their container equipment, some shipping lines are continuing to issue container detention invoices to importers for the late return of the empty container.

Loch M. Fraser has called on the shipping lines to implement a moratorium on container detention charges until the empty container congestion crisis in Sydney has eased. 

Our joint analysis shows that in the last few months of 2019 - before the COVID-19 pandemic struck - before the extreme weather events - before stevedore protected industrial actions affected terminal productivity - there was an excess of over 16,000 TEU that had not been evacuated by shipping lines through Port Botany.  So, the current deficit of empty containers had already begun in late 2019. 

See joint Media Release: 

Unfortunately, some shipping lines are telling importers that when they receive the container detention invoice, they should then dispute the charge and provide evidence as to why the container could not be de-hired in the detention free period.

We all know why the containers could not be returned on time ... THERE IS NO EMPTY PARK FACILITY RECEIVING THE CONTAINERS!!  So, why go through the rigmarole of issuing the detention invoice in the first place?!
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