Detention and Demurrage claims are rolling in

Posted on June 29, 2024 by | Leave a comment

Samsung Electronics of America (SEA) is a major user of container shipping. They have decided to fight back against excessive and frequently undocumented Detention and Demurrage (D&D) bills from carriers. This article spells out the claims.

Overall, Samsung thinks ocean carriers were selling door-to-door service and couldn’t deliver it. So they started billing customers to recover their costs.

The Federal Maritime Commission (FMC) has recently established rules about billing for such services, making the billing more transparent and requiring documentation for each charge. This will help shoppers, who are frequently baffled by the charges.

It’s essential to close down the practice of billing without thorough documentation. Seagate should have lots of winning arguments in these cases. There were so many temporary closures, changing windows for pickup and delivery, and other delays not caused by the shipper during the COVID era and after, that most D&D charges were probably due to slipups out of the shipper’s control, and perhaps even the carrier’s control. Carriers should not be entitled to profit from these.

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Nick Savvides | Jun 17, 2024

Samsung Electronics America fires D&D claims at carriers

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Posted in Logistics, Shipping, Supply Chains

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Port call optimisation reduces greenhouse gas emissions in ports

Posted on June 20, 2024 by | Leave a comment

Drewry is well-known for its expertise in maritime-related matters. In a recent market opinion piece, they suggest that maritime emissions can be reduced rather simply, with port call optimization. They mean to reduce the time ships sit near a port waiting for their berth to open up.

Some ports have been successful with appointment windows. But the Drewry approach includes slow steaming to hit the port berthing window close to the time, instead of standing offshore running engines and emitting pollution. The slow steaming itself is a tested measure for reducing emissions, though it doesn’t eliminate them. The two efforts combined could save a lot of pollution, and now in some places such as the EU, emission charges based on actual fuel use numbers.

Eliminating waste in a system, such as waiting time waste, is a tried and true operations management or lean technique. But in the case of maritime shipping and ports, a lot of coordination is required. Systems need to be in place to provide accurate information about ocean carrier voyage schedules. Sailing times between ports can vary a lot, because of factors such as weather and route adjustments.

But also, both ocean carriers and ports need to share information and cooperate on setting berthing schedules. A late loading in Shanghai, for instance, will affect the projected arrival time in Long Beach. the two ports and the carrier will need to share up-to-the-minute (or hour) information about progress. Will they do it? It will require a level of interaction never before seen.

I think that ultimately, ports and carriers will be driven to this by the gains that can be made. but I think it will be a long time coming.

Update: Port optimization can actually prevent deaths. Hong Kong University of Science and Technology (HKUST) has recently studied the number of deaths that could be prevented by port waiting time improvement.

Sam Chambers June 27, 2024

Port efficiency gains can save 10,000 premature deaths annually

10 Jun 2024

https://www.drewry.co.uk/maritime-research-opinion-browser/maritime-research-opinions/port-call-optimisation-is-key-to-reducing-greenhouse-gas-emissions-in-ports

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Posted in Logistics, Ports, Shipping, Supply Chains

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ILA stops negotiations with USMX

Posted on June 12, 2024 by | Leave a comment

The labor deal between US East and Gulf Coast ports and the International Longshoreman’s Association (ILA) may be unraveling. The current agreement expires at the end of September. It was a six-year deal.

The major issue at present is an Auto Gate system Maersk and APM Terminals are using that processes trucks autonomously, with no ILA labor. The union claims this directly contradicts what was agreed in the last union contract.

Automation and protection of ILA jobs have for years now been a bone of contention between the union and the alliance of container carriers, direct employers, and port associations that serve US ports, which is called the United States Maritime Alliance (USMX). The same was true on the West Coast, when the recent strike was averted by a new contract with the Pacific Maritime Association.

There’s no easy way to find resolution. Automation reduces jobs for longshoremen, though it creates support jobs, for which most union longshoremen are not qualified. And retraining these longshoremen may be difficult, even if some way could be found to fund it. Each side thinks the other ought to pay for the retraining. And in the short run, there will still be a workforce reduction.

The September 30, 2024 expiration date looks like it may not be met; however both sides have usually agreed to continue work as usual while still negotiating. However, openly violating terms of the contract, especially without full discussion with the union, is a good way to get their dander up, and prolong the negotiations.

Best to practice transparency and full disclosure.

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By Jeff Berman June 10, 2024

https://www.logisticsmgmt.com/article/ila_stops_negotiations_with_usmx_with_deal_set_to_expire_at_the_end_of_september

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Posted in Labor Economics, Logistics, maritime, Ports, Shipping, Strategy

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