Port Authority of NY and NJ have announced a new container fee payable by ocean carriers. The fee will be levied when the outbound containers don’t exceed inbound containers by 110% in the same period. The port authority also plans to find additional space to store containers near the port, and already has identified 12 acres on the port.
It seems that these two measures are what works to reduce congestion. The same two kinds of measures were invoked at the Port of LA and Port of Long Beach to get ocean lines to start moving empties out. In California, though, the container fees were just threatened; they never were begun. that alone was enough for ocean carriers to start moving containers out.
Perhaps we have found a credible set of options to get container carriers to move those boxes.
Terminal congestion in Europe is high, even though there are fewer containers being handled than a year ago.
Ocean carriers handle congestion by skipping calls, and landing the containers at smaller ports, then sending them by land to their final destination. Skipping calls fouls up schedules for everyone, and makes it impossible to plan for increased capacity. It’s a nightmare situation for port terminal scheduling and for much of the hinterland service logistics, such as barge, rail and truck.
Another source of congestion is containers sitting in ports, often empty, awaiting movement elsewhere.
Almost everyone believes ocean carriers ought to improve on keeping schedules and sailing when they planned, meeting commitments made in advance to the terminals they intend to stop at. When there’s little excess capacity, altering schedules throws all the downstream logistics plans out of whack. It is like a bullwhip effect; when a ship skips, all the efforts planned to handle those cargoes is wasted, and has to be reorganized as best it can for what is believed to be the next round of deliveries. Keeping entire supply chains in a quandary does not lead to efficient logistics in the hinterland.
Ocean carriers are averaging about 30-40% ontime deliveries right now, and their on-time percentage has been excruciatingly low for a couple of years. No land-based logistics service could stay in business with these kinds of numbers.
In order to get ocean carriers to commit to scheduled berthings, ports are going to have to share information about berth window schedules. If this data were more public, comparisons could be made and carriers that routinely missed their slots could be penalized by getting deferred when they wanted to berth elsewhere. Getting liners to commit to berthing schedules requires cooperation among ports.
More heartbreak for truckers, especially owner-operators.
Many small businesses turn to factors to handle one of the messiest jobs, invoicing and collecting from customers. Factors collect a percentage for each transaction, and often advance the money to the trucker before it’s collected. It costs the trucker some of her earnings, but the money is available right away, and the factor handles the arguments with the shippers.
But when a factoring firm, such as CoreFund Capital, goes bankrupt, truckers who have not received funds for their invoices are out of luck. They have to stand in line with other creditors, waiting for a court to approve payment.
That means they don’t have cash for immediate expenses such as fuel, even though they have already completed work they have not been paid for. Some cash flow problem, right?
And there isn’t much that can be done. The contracts that included use of CoreFund for payment have to be broken (by a court or receiver) before alternatives can be put in place.
The firm is owned by some brothers, and a family feud may be behind the collapse. Let’s hope the truckers get paid soon.
