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Shippers in the firing line

Shippers’ attitudes and practices, both on the import and export side, leave much to be desired, both in the fight against congestion in the North Sea main ports and in the hinterland logistics chain, according to participants in the annual Rotterdam port debate, which took place on Wednesday, 12th December.

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Shippers in the firing line

Shipping lines, ports and everyone else in the supply chain down are regularly attacked by shippers using the Rhine corridor, but now the boot is on the other foot. Shippers expect rail to accommodate them on demand when inland water levels are low, and expect inland shipping to do the same when rail is blocked, such as occurred last year with the Rastatt closure. Additionally, normally the dock loading bays of their DCs are open for business only durng the daytime, but the freight business operates around the clock.


The proposition that "shippers opt for rail too late and only as a strategic alternative for barge transport once it is too late" was supported by most of the participants at this annual event.


The Rotterdam Port Debate, organised by Dutch industry publication Nieuwsblad Transport, traditionally hardly attracts any shippers. Matthijs van Doorn, the Port of Rotterdam’s logistics director, even called dry bulk shippers "opportunistic" by focusing too much on the cheapest option, barge transport, without investing in a safety net rail alternative in advance. “Rail cannot afford to invest in a speculative pool of spare railcars for emergency use only,” Van Doorn said. As is generally acknowledged, the dry bulk and chemical sectors have been hardest hit by this year’s extremely low River Rhine water levels.


The "8 o’clock syndrome," whereby containers are called for stuffing or stripping when the DCs open at 08.00, was attacked by Mark Geerts, CEO of Belgian haulage company Corneel Geerts. He called for a differentiation in road toll pricing, so it would be much lower in night hours and charged at a 200% rate in the rush hours, to give shippers an incentive to move cargo during the night.


“The only effect of Belgium’s road toll is that we now pay to be parked in the tailback on the Antwerp ring road during rush hours,” Geerts complained. “Just to rub it in, 30% of our truck toll revenues are spent on adherence controls"


Major Dutch container trucker Bert van der Heijden noted how the "8 o’clock syndrome" creates an export box drop-off peak, with two hours of waiting time at the marine container terminals, and so feeding congestion. He also suggested pricing road haulage of empty containers.


Guest speakers and other attendants - mostly representing liner shipping, forwarding, stevedores, consultancy, research, barge, rail and road - predominantly agreed that shippers fail to invest strategically in supporting the creation of integrated trimodal hinterland corridors. No effort is made to achieve synchromodality, let alone preparedness to pay for greening the corridors. This, versus the prevailing short cyclic lowest price/race to the bottom approach, was seen as a serious retardant.


MSC Netherlands director Theo van Ravesteyn revealed that MSC has tried in vain to revitalise a container rail shuttle between Rotterdam Maasvlakte and Venlo, Holland’s key inland hub, at the German border. “Despite our commitment to finance 50% of the operating costs of a five times a week daily train, we have not obtained a single shipper’s commitment, not even a provisional or indicative one.”


Van Doorn stated that congestion is easing as regards both deepsea container terminals and barge carriers. He reminded his audience that 2018 has seen 40 working group sessions and five plenary sessions to identify the issues in the chain. “We have already witnessed a shift back from road to barge, but we’re not there yet.”


However, many attendants did not back the notion that Rotterdam container congestion is less acute than in 2017. “It’s a big step forward that in these working groups we have managed to agree the definitions of all congestion components, so at least we’re now talking about the same things,” said Jurien de Jong of DB Schenker’s Dutch ocean shipping branch.


Rogier Spoel, policy manager with Dutch shippers’ council EVOFenedex, spoke about the "enormous growth in the number of ocean freight surcharges during 2018. We can’t see the wood for the trees and our legal advisors are called daily for advice on how to stave them off,” he said, even suggesting that the bunker price should be incorporated in the service contract as any business risk. He did acknowledge that the new bunker adjustment factor (BAF) calculation methodology that deals with the low sulphur surcharge for the 2020 IMO rule does qualify as a surcharge, "but this is a calamity."


Van Ravesteyn countered that the BAF is not a revenue model, but a safety net. “Do let us keep this out of annual service contract negotiations, please! Shipping lines are seen as, and used as, a commodity far too often these days.”

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