- The UK ports already short of HGV drivers is reeling under the congestion created by empty containers.
- DPWS says that one third of its 18,000 teu containers are empty.
- Shippers are using merchant haulage with some of them charging customers for it.
- MSC is charging an additional £20 per teu for line haulage.
- The accumulated cargoes are discharged at the London Gateway while others are making a diversion to Rotterdam port.
- By 2025 some 10% of all container vessels will have a capacity of 14,000 teu which would require more improved port facilities to tackle congestions
Ocean carrier planners are making last-minute diversions in order to avoid chronic congestion at the UK’s two largest container ports, Felixstowe and Southampton, causing chaos to the country’s supply chain, reports Mike Wackett of The Loadstar.
How is it affecting shipping?
The congestion at these 2 ports have added to the woes of the UK haulage industry, which is already suffering from an acute shortage of HGV drivers.
Even before the botched implementation of a new terminal operating system at Felixstowe in June, which was the catalyst for the current congestion, the UK haulage industry was running on empty and reckoned to be short of more than 75,000 drivers.
Indeed, one haulier told The Loadstar, before the Felixstowe IT melt down, that he was “very worried” about his firm’s ability to cover all of the contracted work during the busy peak season this year.
“We just can’t get the drivers,” he said at the time, “even though we are paying over the odds, and to add to it all we are seeing a couple of our existing guys retire every month.”
How is it hampering trade in Europe?
Giuseppe Lamberti, a manager at Salerno Container Terminal, said: “It’s incredible the impact of this on North European shipping trades; carriers, consignors and even terminals have been affected by the Felixstowe failure. I never thought that my firm’s container throughput might be affected by the capability of another terminal to implement in good order a new TOS [terminal operating system].”
The IT failure at Felixstowe, which began in June, has resulted in a number of ship diversions and in some cases the temporary transfer of services to other ports.
Arguably, the problems at Southampton can be traced back to the issues at Felixstowe, however it has also highlighted the additional difficulty container ports have in handling off-window ULCVs.
Shippers Canceling and Diverting Cargo
One carrier source that services both ports told The Loadstar all its UK calls would be “under the microscope” this month, due to the worsening quay and landside congestion. “We can’t afford to have our ships sitting at anchor for days and then being forced to cut and run when we eventually do get alongside,” he said.
Yesterday the Ocean Alliance partners advised they were cancelling this week’s planned call of the 20,388 teu Ever Goods at Felixstowe, resulting in some 3,000 containers of imports destined for the UK Christmas market being transhipped at Rotterdam, which could delay their arrival on retailers’ shelves by several weeks.
Earlier THE Alliance members had pulled Thursday’s call of the 20,180 teu MOL Truth at Southampton, diverting it to London Gateway today for import discharge before it goes on to Hamburg.
Shippers Resorting to Merchant Haulage
Container lines serving the UK are trying to push shippers to use merchant haulage but if they are contracted to cover the delivery of containers they are hitting importers with a variety of extra charges.
MSC, for example, has told some of its customers that it will charge them an additional £20 per teu for line haulage, which it said was “to cover the cost of putting on extra haulage units”.
An eleventh-hour diversion of a ship that results in thousands of boxes being landed at another port can cause weeks of delays to the arrival of goods, due to the fact that deliveries were programmed from the intended hub.
How to avoid the congestion?
Due to the worsening congestion at Southampton, the Ocean Network Express (ONE) advised its customers late last week that the 20,180 teu MOL Truth would no longer be making an import call at the south coast port on 4 October, but would instead discharge its cargo at London Gateway.
In a statement to The Loadstar today DP World Southampton confirmed that the MOL Truth would discharge its imports at London Gateway, but that the vessel would still load exports at Southampton at a later date.
It said: “DP World is uniquely positioned in the UK to offer shipping lines and cargo owners a two-port strategy, with both ports able to support one another, ensuring greater certainty and resilience to UK supply chains.”
The terminal operator issued a ‘terminal alert’ on 27 September advising that its ship and landside productivity was being impacted by “very high stack levels”.
Empty Containers, the Problem
DPWS gave the reasons for its congested terminals as: too many empty containers; the pre-Christmas peak; vessels cutting and running and a lack of haulage.
It appealed to its shipping line customers to ship out their empties; stop using the port for transhipping empty equipment and not to discharge containers for other ports without consultation.
In fact, according to today’s DPWS stack report over one third of its some 18,000 teu on the quay for export consists of empty equipment.
One local source said that carriers had been regularly shutting out planned shipments of empty containers after the boxes had been transferred to export stacks, thus causing productivity to “fall off a cliff”.
Diversion holds the key
Meanwhile, the problems mount up for UK importers: the Ocean Alliance carriers advised cargo owners today that the 20,388 teu Ever Goods, scheduled to arrive at Felixstowe on 6 October will instead be diverted to Rotterdam.
APL said that “exports will remain on quay for the next sailing”. APL, in a customer advisory said that UK imports would be transhipped to the CSCL Mars scheduled to arrive at Felixstowe on 13 October.
But for UK exporters who have booked for the Ever Goods there was no substitute vessel nomination and thus there could be a lengthy delay before shipment.
Impact of this rush
In a new discussion paper released by the International Transport Forum (ITF), entitled Container Ship Size and Port Relocation, the author, the OECD’s Olaf Merk, suggests the influence of the orderbook rush for mega-ships (defined as over 18,000 teu) has yet to be fully realised.
“The impacts of the newest wave of container vessels only start to become visible, as many of these mega-ships have not been delivered yet,” said Mr Merk.
- Notwithstanding the adaptations needed to ports to physically handle the ULCVs, such as longer quays and container cranes with more outreach, the larger ships mean more containers on each call, which said Mr Merk “increases the peak and through effects”.
- Moreover, the ITF’s studies clearly demonstrate that the arrival of an ULCV is “associated with higher yard occupancy, more feeder traffic and truck and train movements”, added Mr Merk.
According to the ITF, based on current industry dynamics, by 2025 some 10% of all container vessels will have a capacity of 14,000 teu or more.
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Source: The Loadstar
