Ocean Carriers Increase Port Transport Costs by Penalizing Street Turns
February 4, 2019
In January, four major ocean carriers, ZIM, HMM, SM Lines, and Maersk, announced fees for truckers that engage in “street turns,” the process of re-filling shipping containers for export after unloading the imported contents. Truckers and shippers are complaining that these re-use fees are penalizing them for something that does not cost the ocean carriers.
Maersk will be issuing its $30 charges for approved street turns through the empty-container management software platform, Avantida. Unapproved street turns will incur a $100 equipment misuse penalty. ZIM and HMM will charge fees of $40 and $50, respectively. SM Lines claims its $75 fee is not a new fee, but rather a clerical update to its round-trip invoicing process.
The imposition of street turn fees on truckers may encourage truckers to switch from short-term drayage to longer over-road routes in order to maintain their pay, thereby increasing overall shipping costs.
Although street turns are a decades-old practice, the Intermodal Interchange Executive Committee that oversees practices between ocean carriers, truckers, and other providers determined that the imposition of street turn fees does not conflict with the language of the Uniform Intermodal Interchange Agreement. As a result, the fees were put into effect, over the objections of motor carriers. The American Association of Port Authorities has not taken a position on the street turn fees.
Along with the increased financial burden of street turn fees, motor carriers issued statements about the increased congestion and environmental impact that returning empty containers to avoid penalties will impose. Increased congestion is particularly concerning for regions with recent petrochemical booms, such as Houston, especially in light of existing excessive wait times at major ports. If truckers switch from drayage, shippers will likely see an increase in detention fees at ports as well.
“ILMA has been monitoring closely issues with logistics for members, including those companies that import and export products,” said ILMA CEO Holly Alfano. “Increases in logistics costs are just one of the problems our members are experiencing.”