The ongoing disruption at Britain’s biggest container ports shows no signs of ending and is now exposing fundamental weaknesses in the container haulage industry, that look endemic, putting the future of the industry in doubt, without immediate change and reform.

We reported towards the end of the Summer that the lines were transferring the ‘risks’ of carrier haulage to the shipper and imposing a range of free time limitations, wasted journey costs and other stipulations.

Effective from the 1st November one of the UK’s leading merchant hauliers is taking action, so that “the container transport industry will greatly reduce its losses”.

These actions include the introduction of stricter penalties for cancellations and delays, both on collection at the port and at the clients premises.

NOTE – While Norman Global Logistics deploy our own equipment and work tirelessly to protect clients from  rising costs in the supply chain, we also think it is critical to keep you informed of important industry developments

Six primary factors are being cited by hauliers, as being responsible for the loss of revenues, and the subsequent reduction in performance & service to clients.

1. Drivers
– Conditions and pay make job undesirable
– Brexit is discouraging European drivers, who are leaving
– Increased cost and compliance driving out owner-drivers

2. Environment
– Increasing congestion on road and rail networks
– 70% AM bookings and imbalance of collection and delivery volumes

3. Escalating costs
– Parking, fuel, wages and temp staff costs have increased massively
– New emission laws and Euro 5 and Euro 6 vehicles need investment

4. Decreasing revenue
– Haulage rates have been driven down by lowest ever shipping rates
– Forwarders and shippers hold hauliers liable for issues outside their control
– Hauliers have been complicit by allowing market to suppress rates to win new business

5. Mega-Ships
– The lines built vessels that are too big for most ports to hand efficiently
– Those ports that have invested to handle ULCV’s cannot handle the volumes they now receive
– Delays berthing and at port directly impacts shipping line schedules
– To mitigate schedule delays, vessels ‘cut & run’, either to return later or discharge at another port

6. Ports
– Felixstowe, Southampton and London Gateway have invested to handle mega-ships
– Aggressive carrier scheduling and quay/terminal congestion is a performance perfect-storm
– Port-centric facilites, road and rail have insufficient capacity and limited options to increase
– As more ULCV’s are about to deploy, the approaching winter and high winds will close port operations

The combined impact of these factors is a long list of outcomes, that have a negative financial impact, which the haulier currently incurs and want to transfer, or they believe that the UK will not have a container transport industry.

Some of the outcomes are factors that are under the direct control of the port, or shipping line, but others are more diverse, including:

  • Mass cancellations after ‘cut & run’ or schedule change
  • Collection and delivery windows that are too narrow
  • Excessive loading or unloading time
  • Booking fee, port and carrier costs
  • Late return of empty containers
  • No show costs

 

The need for change is apparent. But is there a will among supply chain participants to redistribute the risk and cost, before we get to crisis point?