Category: Import

Sydney Ports Corporation Wants To Add A Surcharge For Truck Container Movements During Peak Periods

Following on from the IPART review of the operations on Sydney’s wharves, the Sydney Ports Corporation have been granted the authority to implement procedures for reform on the waterfront. These procedures are currently underway and we believe that the reforms will take the form of 3 or 4 KPI’s (Key Performance Indicators) that will need to be achieved by the wharf stevedoring companies.

We will attempt to keep you informed as and when these KPI’s are advised to us.

Unfortunately we have discovered an issue that we feel is totally detrimental to all importers where the Sydney Ports Corporation, in consultation with the Federal Government, are looking at introducing a Port Peak Pricing charge. This charge will basically be imposed against the importer if they wish to collect their containers during the perceived daily peak period. At this stage the cost of the fee and the exact peak time is still unknown however we believe the fee to be around $100.00 to $120.00 per container and the period to range from 5.00am to 1.00pm.

We cannot see any benefit at all to this charge apart from forcing importers to change their warehouse times and their work practices or else face additional charges. For example, if your warehouse is similar to the 95% of other warehouses in Australia then they generally operate from 7.00 am to say 3.30 pm. Unless you pay the peak period charge you will not be able to receive your container within normal daily operations. Maybe if you are lucky enough to obtain a 1.00 pm or 2.00 pm time slot you might be able to receive the container in time to unpack that day, provided there are no delays loading trucks out at the wharf. Imagine if every importer attempts to get these slots to keep warehousing operation costs down? It will only mean that the port is quiet all day and the peak has been moved to 1.00 to 2.00pm. With only limited slots between this new peak period obviously not everyone can obtain a time slot.

The only other alternative will be to request the carriers to collect the containers during off-peak or shoulder periods and take them back to their yard for delivery during the importer’s normal warehouse hours. This, of course, will have a cost of roughly $250.00 for a 20’ and $350.00 for a 40’ when you allow for cartage to store, lifts, fuel surcharge and storage, making the peak period charge look the cheaper option at first glance.

Although the negotiations have progressed to an advanced stage, it still has not been ratified and can hopefully still be quashed. We know that the Transport Industry are strongly opposing this charge and have been actively seeking its demise through discussions with the Sydney Ports Corporation and the Minister, Joe Tripodi. The transport companies want what the importers want, and that is simply for the individual stevedores to implement procedures to work landside operations much more efficiently and be accountable for any delays instead of the Government to simply laying the congestion blame with importers and force them to change their operations or pay a premium.

Below is an extract from one carrier and I believe that this highlights the frustration that the Transport Industry are feeling and also it highlights the need for all of us to act now before it is too late. There is also a copy of a flyer detailing an important meeting set down for the 2nd of April, 2009, at the Stamford Plaza, Mascot, which will have up to date details of this issue as well as the platform for questions and answers.

“Hi Guys, this is very important that you attend and be very vocal from the floor as they will impose onto industry PEAK PRICING and that cost will have to be charged to the importer / exporter and they won’t be happy. The government is not listening to the transport associations solution for the problems at the port and we think it can be easy fixed.

1. The stevedores be penalised if they don’t turn the trucks around in the one hour time slot (they pay the detention)

2 .Empty container depots that are owned by stevedores open 24/5 like they expect transport companies.

3. They say it’s not about money, but they should put a $20 levy on all containers coming through the port.

4. All movements at the port be electronic for quicker turnaround.

Transport companies have changed their operations around and work 24/5 and in peak times 24/6.The only reason we get congestion and big ranks at the port is due to lack of equipment loading the landside transport. Companies are penalised by the stevedores when late or incur no shows so it is only fair they also be accountable for lack of performance.”

We will continue to chase our representative body to fight this charge and will also continue to support the transport companies in an effort to have this overturned, however we feel that maybe some input from the importers would be of assistance. If you feel strongly enough on this issue please send an email to the minister, Joe Tripodi at joe@tripodi.minister.nsw.gov.au . You may also like to voice your concerns with the Chamber of Commerce. There will be a symposium held at the Stamford Hotel in Mascot on 3rd of June, 2009, where this issue will be open for discussion. It is anticipated that Joe Tripodi will be in attendance to field questions.

The Sydney Ports Corporation is currently operating a test of operations on both DP World and Patrick’s wharves and are looking at truck arrival times, slot bookings based on each hour of operation and the individual ports performance. All this data will be used to assess the final decision. Below is a link to the Sydney Ports Corporation website where you can see the daily results of this test.

http://www.sydneyports.com.au/port_development/landside_improvement/performance_reports/industry_trial_1_16_feb_-_1_mar

We will continue to monitor this situation and will let you know details of any developments as they come to hand.

© Lighthouse Agencies Pty Ltd. All rights reserved.

Sydney Wharf Stevedores – Guilty of Gouging?

Early September has always been the “traditional” start of the peak import season for Australia. Normally, import cargo volumes start to increase slowly from the beginning of September until they reach their full peak around early to mid-October, then they tail away back to more normal levels.

This year, however, things are different – at least in Sydney, anyway. Cargo volumes through Sydney’s major working port area for containerised cargo, Port Botany, have been steadily increasing for some years. This is a reflection of the strength of the Australian economy as it pertains to international trade. However, it seems the two main wharf stevedores, DP World and Patricks (now owned by Toll Holdings), have been a bit caught out. We are already seeing major delays for trucks trying to access the port to move containers, and the stevedores are bleating about how hard done by they are as they struggle to cope with the demand. I don’t have any sympathy for the stevedores as they’ve brought this situation on themselves through their own greed, but more of that later.

Following are extracts from some press releases by various participants on the waterfront. Hopefully these will give readers a better picture of the problems on the Sydney waterfront at the moment.

1. From the general manager of the Patrick Ports operations:

“There has been major congestion at Patricks Terminal over the past few weeks that has resulted in average times of 4-6 hours to conduct receivals and exports of containers. The problems are causing a “domino” effect with difficulty obtaining slot bookings and turn around times to the wharf increased dramatically. Along with all transport companies we are doing our utmost to keep all charges to a minimum but there will obviously be detentions that are above normal and possibly overtime charges incurred to try and prevent containers going into storage.

Below is a media release that helps explain the situation.

If you would like to discuss this further please call me anytime.
Bruce Gunter
General Manager

Patrick throwing everything at Port Botany congestion

Patrick’s Port Botany terminal manager David Phillips said the stevedore was “throwing everything” it could at relieving congestion caused by an unprecedented build up of import containers this week.

Patrick is training 60 new staff to drive straddles at the terminal, many having been transferred from Darling Harbour, which is due to close soon.

Mr Phillips said this morning (Friday, August 31) that volumes at the Port Botany terminal had not decreased since the Christmas peak.

“There is an unforeseen increase in volume that has not dropped off since September last year,” Mr Phillips said.

“This week and its problems are a direct result of a very busy shipping schedule, but primarily the build up of imports through lack of deliveries over the weekend.”

Mr Phillips said there had been very few take-ups of weekend slots, causing high stack densities at the terminal which was slowing the time it took to retrieve the boxes for each truck pick-up.

“We’re throwing everything at it, we really are,” Mr Phillips said.

“To handle that sort of volume, without stopping, you cannot predict that kind of increase.

“We’re seeing a peak in operation that’s extreme.”

Mr Phillips said Patrick had also temporarily extended the amount of time import containers would remain at the terminal before importers were charged storage fees.

Patrick is adding two new straddles next week and another three in the first few weeks of September.

The stevedore has closed its shipping operations three times so far this week in order to divert resources toward clearing containers from the docks.

Patrick and the Customs Brokers and Forwarders Council of Australia are encouraging the use of extra slots this weekend and particularly over the APEC long weekend starting September 7.

Mr Phillips said Patrick was not counting the Friday public holiday in Sydney as a free day.”

2. From DP World:

“Due to the low number of time slots booked for Friday 07/09 (170 imports) and Saturday 08/09 (60 imports) and the high number of import containers due in over the next few days and already on the ground at the terminal, an estimated 5000+ import containers will be on the ground come Monday morning.

We will be making available additional slots next week to help move these containers, however this will test the terminal’s roadside operational capacity. We are therefore anticipating higher than normal truck turn times from Monday 10/09 and continuing the rest of the week.

We encourage all transport operators to make use of the available timeslots on Friday and Saturday to reduce the number of containers in the terminal early next week and the demand for import timeslots.”

3. From a transport company:

“I think the crazy Christmas rush has come early. As most of you know we have experienced extensive delays at Patricks for the past three weeks due to the high volumes of containers. Looking at next week it is going to be even worse. Both terminals are going to be extremely busy and we are expecting slow turnaround times as well as a shortage of timeslots.

We have been forced to work Friday due to the number of containers available and with our clients not accepting deliveries on Friday, there will be a backlog of containers to deliver from our yard next week. Our main aim next week will be collecting containers from the terminal within the free storage time. We will do our best to meet your delivery dates and times but we will need people to be understanding and flexible by extending their hours of delivery.

With the shortage of timeslots we are expecting any late pre-alerts may incur storage.”

To add the difficulties of the transport companies, police are not allowing trucks to sit in the long queues outside the wharves as they have done in the past (perhaps due to the APEC summit?). Police are forcing the trucks to move on meaning the trucks then lose their position in the queue.

Ultimately, this means additional costs for importers and exporters by way of additional charges from the transport companies for truck waiting time, plus the possibility of storage charges being incurred on import containers due to the lack of available time slots.

There is one recurring theme coming from both stevedores. They both think that because they work 24/7 then so should all the other people involved in the import and export chain. The stevedores are quite happy to arrogantly try to impose their rule onto anyone else that has to use their services in some way. They care not that most importers are not major companies that have facilities that do or could work in such a way that meets the stevedores myopic views. Instead of trying to beat the community into submission and then crying because they can’t have it all their own way, perhaps they should do themselves a favour and work with the community rather than against it. Perhaps they should also make more staff & equipment available during normal working hours on normal working days? Now there’s a novel idea!

The stevedores used to allow 4 working days to collect containers before storage charges started. This meant that Saturdays and Sundays were not taken into account as part of the “free” period, and storage was never charged for those days. These days they only allow 3 days from the first day the containers are declared “available” for collection, and Saturdays and most public holidays are considered “working days” for the purposes of the stevedores “free” period calculations. This means long weekends are quite often a boon for the stevedores in terms of additional revenue from storage charges – kind of like “money for nothing” really.

For example, lets look at the long weekend created by the APEC summit in Sydney, over the period Friday 7 September, 2007 to Sunday 9 September, 2007. Suppose a container was declared first day available on Thursday 6 September, 2007. As businesses would not be working on Friday 7 and Saturday 8 September that leaves just that one day for ALL import containers to be collected from the wharf to avoid storage – a logistic nightmare impossible to achieve.

This sort of arrogance is why the Container Logistics Action Group (“CLAG”) was formed and has taken these issues to IPART (the Independent Pricing and Remuneration Tribunal) under the auspices of the Australian Competition and Consumer Commission who believe the stevedores have a case to answer in regard to probable collusion on pricing, and predatory practices using their duopoly to unfairly seek additional revenue.

The ACCC have provided CLAG with the authority to undertake collective bargaining with the stevedores on behalf of the landside parties that have to use the stevedores facilities (transport companies, freight forwarders, Customs brokers, importers, exporters).

© Lighthouse Agencies Pty Ltd. All rights reserved.

Integrated Cargo System Current State of Play

In October, 2005, the Australian Customs Service (“Customs”) bludgeoned the import and export community with the introduction of the Integrated Cargo System (“ICS”). Anyone that was importing or exporting at that time will be still licking their wounds over the enormous dramas the introduction of the system caused.

As we approach the February, 2007 cut-off of any of the remaining legacy systems that the ICS replaced (e.g., COMPILE), it is perhaps timely that a quick review of the current state of play is considered. There has been an enormous amount of work carried out since the introduction of the ICS, especially in regard to workarounds to some issues that the ICS just couldn’t deliver on, or was too inflexible to cope with the reality of the import or export process from a commercial perspective. This modification of the system that was alleged by Customs to be the ultimate reporting system available at the time continues to this day, with a number of diagnostic functions that were available to the commercial users of COMPILE not available under the ICS. To be fair, there are some other diagnostic functions in the ICS that weren’t available to the users of COMPILE, and some of these have proven to be very useful in providing transparency of the reporting regime. Nevertheless, there are some annoying inadequacies in the diagnostic functions of the ICS.

By this, I mean that all parties in, for example, the import reporting regime, are able to interrogate and access data that will tell them where problems or delays in electronic clearance are occurring and, therefore, who should be responsible for correcting the error that is causing the delay. However, getting the responsible party to correct their error in a timely fashion is often a frustrating exercise for other users down the line from that reporter. And then there are the compulsory “screening” times built into the system. Changes aren’t always immediately effective – depending on the nature of the amendment made there is a delay of between 2 hours and 24 hours until the change is processed and flows down the line.

From a Customs brokers perspective, we are finding that there are many things in the chain that are causing much angst to brokers, and these problems and issues have even forced a lot of skilled players out of the industry in sheer frustration at the extra workload they have been expected to undertake for no increase in remuneration. These frustrations stem right from the importer through to the transport operator delivering the goods from the wharf to the importer. Importers just do not seem to understand their place in the scheme of things – there is a general shift by importers to avoid accepting the inherent risks that being an import trader involves and they try to push these risks to third parties, in particular on to their Customs broker. Freight forwarders, and in some cases, shipping lines, seem to think that the 48 hour reporting cut-off means they don’t have to lodge their reports with Customs until 48 hours before the vessel arrives, irrespective of the fact that they had the documents some 1 or 2 weeks prior to the vessel arrival. Whilst the wharves are generally up to speed with electronic releases, many of the lcl depots are not, and they continue to insist on receiving a piece of paper that shows that the goods are clear of any Customs and AQIS impediments, rather than them interrogating their computer systems to check for the electronic release status that the ICS transmits to the depot on final clearance of the shipment. Similarly, transport companies quite often want that piece of paper, although most of them are vastly improved now they have learnt how the ICS works.

Out of all these frustrations, it seems to me the most infuriating come from the importers and the freight forwarders. Many importers continue to think they can give the broker the clearance papers on the day the vessel arrives, or maybe only 1 or 2 days before. This of course places great pressure on the brokers as they are continually having to rush clearances through due to late paperwork from importers. If there happens to be a problem with the paperwork, then these importers complain about the delay as if it’s the broker’s fault, when in fact if the importer had sent in the documents early enough the problem could have been resolved before arrival of the cargo. In regard to freight forwarders, they exacerbate the problems by reporting as late as possible, and only then do they issue arrival notices and the like to advise brokers and importers of certain essential details of the impending shipment. So, not only do brokers have to cope with documents being given to them at the last minute by the importer, the broker also has to cope with freight forwarders not having reported the cargo, and therefore there is insufficient information available for the broker to prepare the Customs and AQIS clearances. Further aggravating the freight forwarder issue is that it is not uncommon for the importer to send documents to the broker and when the broker contacts the forwarder for information about the shipment, the forwarder has not yet received any documents from his overseas agent!

Note that if the shipment is selected for a random inspection by Customs or AQIS, this is NOT the broker’s fault – brokers can do nothing about these random selections as they are generated by the Customs and AQIS internal computer systems.

There have been many stories over the last 15 months or so of importers walking away from accepting the risk of being an import trader and foisting the costs back onto the broker. For example, I heard of one broker whose client received a container that was missing about $12,000 worth of material. The container was packed by the importer’s supplier at the suppliers factory, sealed by the supplier at the factory, and had the same seal on it (still intact) when it arrived at the importer’s warehouse. The importer deducted the $12,000 from the broker’s account, as if it was all the broker’s fault!! The importer’s reasoning? “I didn’t receive my goods, so why should I pay you”  This is outrageous!!

Importers complain about additional costs incurred as a result of inadequate documentation from their supplier, or perhaps because AQIS have placed an overseas fumigation company on their unacceptable list and the container has to fumigated again on arrival. They think the broker is somehow responsible and deduct the charges from the broker’s account. How can the broker be considered responsible for such occurrences? These events are completely beyond his control, yet importers seem to think they can force the financial cost back onto the broker when the broker is simply the medium acting on behalf of the importer to get goods cleared and delivered. It would be a different story if the expense arose due to some negligence on the part of the broker, however, in circumstances such as those mentioned above, it is clearly not the broker’s fault and therefore the broker should not be expected to bear the financial burden.

Customs brokers these days seem to spend an inordinate amount of time using their considerable expertise on behalf of their clients to resolve problems caused by other parties in the transport chain, yet brokers are quite often expected to carry the costs of these problems until they are resolved, rather than the importer bearing the cost and receiving a refund should one be forthcoming. In the same vein, brokers very, very rarely receive remuneration that truly reflects the effort they expend on behalf of their clients.

If you are an importer reading this, then I urge you to sit down with your broker and get to understand what he has to go through on your behalf. He has done his best to understand your business and works to help you achieve your aims. Remember also that the arrangement between an importer and his broker is one that falls under the general laws of “Principal & Agent”. The basic tenet of these laws is that the Principal is responsible for everything the Agent does on behalf of the Principal, and this includes bearing the burden of the costs incurred by the Agent on behalf of the Principal. Help your broker to help you – make his life a little easier and be prepared to carry the burden of the costs of being an import trader, and give your broker a “fair days pay for a fair days work” – he bloody deserves it, I can assure you!

© Lighthouse Agencies Pty Ltd. All rights reserved.

Terms and Conditions - Privacy Policy