Sydney Port Congestion: Hitting importers and exporters in the hip pocket
As if delays caused by congestion weren't bad enough, shipping lines are now starting to levy a 'Congestion Surcharge' on containers in and out of Port Botany. The newly announced charges range from USD285-300 per TEU.
Congestion at Port Botany is nothing new for sea freight importers and exporters. The reasons are numerous. Sometimes justified, other times not but always frustrating and expensive. Congestion can be caused by weather events, industrial action or simply because of outdated infrastructure. Annoyingly, the latter continues to have an impact despite Stevedores continuing to increase 'Infrastructure Surcharges' without seemingly doing anything to improve said infrastructure.
Additional expenses related to congestion at the port come in the form of infrastructure charges, waiting time charged by hauliers, detention and demurrage, re-directions, not to mention the associated costs of customers receiving their goods later than planned.
While over time those using Port Botany for sea freight shipments may have accepted such delays and charges and built them into their supply chain planning, the latest moves by some shipping lines will likely be less palatable.
This week, two shipping lines, Mediterranean Shipping Company (MSC) and ANL CMA CGM have announced 'Congestion Surcharges' for all Full Container Load (FCL) containerised shipments in or out of Port Botany.
MSC were the first to implement the new 'congestion surcharge', announcing earlier this week that importers and exporters would be charged an additional USD300 per 20' container and USD600 per 40' container. To add insult to injury this charge will be applied automatically to shipments arriving or departing the port from 14th September - i.e. this will directly impact shipments that have already been booked and in transit.
Within a couple of days of the MSC bombshell, ANL CMA CGM have followed suit with their own Emergency Port Congestion Surcharge of USD285 per TEU. - While it looks like the MSC surcharge will be applied as part of their 'Destination Terminal Handling Charges (DTHC), ANL CMA CGM have suggested theirs will be levied as part of the freight charges.
Freight Industry bodies such as the Freight Trade Alliance and Australia Peak Shippers Association are making representation to all stakeholders to protest the imposition of these charges. They argue,
'If anything, importers and exporters should be compensated for the poor port performance issues (stevedore industrial action, empty container park congestion / re-directions, container detention fees), not recipients of an additional surcharge which only adds salt into the wounds.'
This is clearly a fluid situation and we at OMNIA Logistics are continuing to monitor it and keep our community updated.