Demurrage, Detention, Terminal Storage
Shipping demand, reduced labor/productivity and peak season has created another year of delays and additional costs for pulling cargo out of port and rail terminals. Under normal conditions, cargo could be pulled out of terminals within the free time limits (typically 4-5 days at ports and 2 days at rail terms).
With record volumes, labor shortage and resulting congestion, demurrage (charged by shipping line after free time window expires), terminal storage charges (charged by the terminal) and detention (charged when containers are not returned to terminals within the allotted free time) are skyrocketing. With the shortage of truck power, drivers and equipment (chassis, or gen-sets for refrigerated containers), these charges are the one of the number one complaints of the shipping industry and currently the Federal Maritime Commission (FMC) is launching a formal investigation. In the meantime, please reach out to your Hillebrand rep to discuss what the best options are for your deliveries.
Port and Landside Congestion
Latest estimates from Journal of Commerce indicate that it will be at least six more months before we see easing of vessel capacity and chassis shortages at ports, but even then there will be residual effects from the bottlenecks in the US transportation network. As of Tuesday, there were 56 container ships at anchor waiting to berth at Southern California ports and the average dwell time for vessels at anchor is 8.5 days.
Chassis shortages, congested warehouses, and labor shortages have doubled the dwell time of chassis with containers sitting on them. The constant stream of back-to-back vessels at ports creates a surge of cargo that when combined with slow turn times for each move, depletes the chassis supply.
For a snapshot of congestion by US port (vessel berthing and terminal yards) and intermodal conditions jump to the US Port & Intermodal update report here.
Terminals at the Port of Houston shut down early on Monday 9/14/2021 due to weather but have re-opened today. Port of New Orleans is open and monitoring conditions. Prepare for residual delays with cargo operations for any pending shipments.
Italy – Alert for orders picking up in the Genoa & Vado Ligure Region
Road and rail construction work in the region, combined with the existing supply chain disruption/port congestion is adding to delays arranging order collections. Trucking capacity in the area has been reduced by over 30% and is not expected to ramp up until week early October. Hillebrand is working to secure appointments further out in advance to loading as well as securing additional truck power, but plan for longer lead times from this area or consider warehousing strategies (at origin / destination) or shipping via alternative ports.
South America – San Antonio Port Closures / Cross-Andes Road Transport interruptions
Winter weather storms closed the cross-Andes road used for connecting Mendoza exports to Chilean ports on September 11th and just reopened on the 14th, so prepare for additional delays to clear the backlog for any loads moving to Chilean ports.
San Antonio port terminals have also experienced higher than usual closures from severe weather this season (high winds and surf conditions on the Pacific prevent vessels from berthing). This is especially disruptive to vessel schedules for cargo destined to US East Coast / Gulf ports because the vessels also have to wait for Panama Canal crossing scheduled slots as well.
Oceania / New Zealand
Service loops from Australia and New Zealand to the US West Coast continue to be disrupted by port delays both at origin ports as well as at destination ports. Container supply is disrupted, especially for equipment for flexitanks. For moving smaller quantities, inquire for groupage container service with Hillebrand or consider airfreight options for urgent orders.
For more information on pending or planned shipments, please reach out to your Hillebrand representative to discuss the best possible arrangements for transport, warehousing, insurance, and customs compliance needs.