Container haulage service levels have fallen significantly this summer, with much blame heaped on Felixstowe’s disastrous software upgrades, but other more serious factors are at play.
Container collection and delivery performance levels across the country are under pressure as the crisis in the UK container haulage sector spreads to all ports, with failures reportedly affecting up to 20% of box traffic.
Container haulage capability has suffered from driver shortages for many years, but other factors like equipment shortages, rail failures and road congestion have been exacerbated by Felixstowe’s well documented issues, which has resulted in carriers diverting vessels to London Gateway and Southampton.
Forwarders that fail to book equipment 10-12 days in advance of the delivery deadline are simply not getting haulage. This is compared to a three day turnaround just a few months ago.
Ironically the economies of scale that the big shipping lines have sought are compounding their haulage problems, leaving them, no option but to hoover up all the availability they can find.
Reacting to these “ongoing challenges” Hyundai Merchant Marine (HMM) have advised that, from 1 October, shippers must undertake all export collections and import deliveries at their own risk.
HMM go on to state that they also reserve the right for their hauliers to be up to 90 minutes late, while still expecting containers arriving within that period to be loaded or unloaded.
In addition they will not consider extended free time or additional costs, however wasted journey costs will apply for any HMM container arriving within this 90-minute period which is rejected for loading or unloading.
These moves reflect the very real operational issues hauliers face with road congestion, a general shortage of vehicles and drivers and increased cargo volumes, all of which mean hitting timed delivery slots is becoming harder than ever.
While issues in the haulage sector have been deteriorating for years, with rising operating costs and low margins, many warehouses still operate rigid collection and delivery windows, which can be as small as 20 minutes.
Ten years ago such a requirement would have been met >80%, today that KPI is more likely to be less than 50%.
We know that shipping lines are reacting to these inflexible delivery windows, including one who told their biggest customer they could no longer cover their haulage.
Rising operating costs and low margins mean there has been little incentive for many hauliers to invest in new vehicles despite demand rising for haulage, while driver shortages − symptomatic of a developing recruitment crisis and a lack of EU drivers − have compounded their plight.
Adding to the recruitment crisis is the continuing drain of experienced owner-drivers, who cannot afford the cost, or opportunity cost of being off the road, for the week-long training course, which is a mandatory requirements of the 2013 HGV driver CPC regulations.
The result is that many hauliers are under huge pressure, struggling to make money and are taking on more work than they can handle with too few people., which suggests that the real cost of running containers around the country is far higher than the market wants to pay.
A reality perhaps best illustrated by the August collapse of a long established and respected Southampton container haulier, with the loss of another desperately needed 50 vehicles