Omicron changes container chain game: CTAA

Variant adds to pressure into new year as infections lead to staff shortages


Hopes that a new year would provide a timely lessening of the enormous strain on the container transport and logistics chain have been dashed as the Omicron Covid variant cuts a swathe through the sector.

Practices and protocols that helped container transport operators keep international container supply chains functioning and their staff and customers safe have, in many cases, been overwhelmed and no part of the chain is unaffected, Container Transport Alliance Australia (CTAA) has noted.

“Container transport operators across Australia have reported to CTAA that they are experiencing between a 5% to 20% reduction in available staff, including heavy vehicle drivers, warehouse staff, forklift drivers, container unpack crews and administration, due to Covid infections and isolation requirements.” CTAA director Neil Chambers reported.

“In some extreme cases this rises close to 50% of available labour.

“Compounding this are staff shortages at customers’ premises, as well as at international container stevedore terminals and at empty container parks across Australia, significantly delaying the movement of containers through the supply chain.

“As a result, transport operators are reporting operational capacity constraints, with transport yards operating between 70% to over 130% capacity.

“This is particularly acute due to the delays in customer deliveries, and the constant need to stage empty import containers through transport yards while trying to secure de-hire slots at clogged empty container parks or container terminals that have reached capacity to receive returns.”

With Covid infections rising exponentially and now uncontrollably in many states, CTAA saw the impacts continuing for months.

“DP World Australia has notified industry that approximately 10% of its workforce are impacted through either having contracted Covid-19 or are isolating at home with a positive case in their household,” Chambers said.

“DP World says these numbers may increase as Australia works through the current Covid-19 wave.

“Vessel berthing delays at container terminals across Australia are still of significant concern, impacting all of the major stevedore companies.”

The delays are being felt most acutely in Sydney and Melbourne, with delays of between two up to nine days, while last week’s heat wave in WA affected terminal productivity in Fremantle.

“The flow-on impact of these delays is terminal congestion and significant competition among transport operators to secure vehicle booking slots before import containers incur storage fees or to gain export slots to meet vessel cut-offs,” Chambers observed.

“There’s not relief on the time constraints … transport operators still only get three days to retrieve import containers from the terminals, and export receival periods can fluctuate wildly if vessels come forward in their port rotation to avoid congestion elsewhere, or are alternatively delayed from port arrival or berthing.

“Weekend work has increased to try to keep up with demand. But, this comes at a significant cost to transport operators in overtime and staging costs. Plus, the current Covid labour constraints and fatigue management rostering obligations really bite on driver and staff availability on weekends.

“Transport operators are trying to work with the container terminals to avoid import container storage charges.

“But, this is proving to be extremely difficult, supercharged over the Christmas and New Year period with shorter working weeks, staff availability and operating hours.”

Read how Queensland has eased border controls, here

Despite another layer of operational burden, an oft-complained of flexibility shortfall remains in evidence and will be brought up during the Productivity Commission (PC) investigation into the sector, CTAA stated.

“Import container detention fee pressure has risen too, with few shipping lines providing any relief to importers / forwarders from hefty charges for late empty return, despite congestion at their contracted container terminals or empty container park providers being a major contributor to the supply chain delays,” Chambers said.

“This pressure has been made worse with shipping lines transferring many international shipments away from contracted rates and conditions to spot rates, with the latter attracting stricter import container detention conditions unless the cargo interests can negotiate a different outcome … not easy in the current global shipping climate.

“As a result, transport operators are having to consult closely with their importer/forwarder customers about the circumstances where the transport operator may or may not accept any liability for the late return of import empty containers.

“The lack of de-hire slots and capacity at some empty container parks or container terminals, and slow truck servicing times at these facilities, is outside of the control of transport operators. In many instances this makes it almost impossible for the empty container to be de-hired before container detention terms are breached.

“Shipping lines are racking in millions of dollars in container detention fees. Is this right if the incentive to return empty equipment in the dictated timeframe is nullified because the shipping lines’ contracted terminals or empty container parks don’t have the capacity to receive the de-hires or are closed?

“CTAA is looking forward to raising real concerns about the shipping lines’ container detention policies with the Productivity Commission, which has been directed to inquire into the long-term productivity of Australia’s maritime logistics system, taking account of recent regulatory oversight of such matters in countries like the United States of America, and in Europe.

“In summary, persistent import and export demand, coupled with the significant operational head-winds being faced, have many in the landside container logistics sector commenting that it is the hardest conditions they have ever encountered.”

“CTAA continues to liaise with the federal and state governments and agencies about Covid testing protocols and isolation timelines.

While the ready availability of Rapid Antigen Testing (RAT) kits to critical supply chain workers is seen as imperative, CTAA sees one silver lining as the recent announcements that RAT tests can replace PCR testing, thereby allowing them to avoid long queues at testing clinics and sites and long waits for test results.

“We also welcome the decision to remove the rolling PCR testing regime for freight workers crossing State borders, which had become largely redundant in the current circumstances,” Chambers said.

“Governments and their departmental advisers need to understand though that the economy will be constrained significantly if the current wave of Covid-19 infections continues to cause supply chain delays, blockages, and associated rising operational costs.”


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