It’s time for Australia’s shipping industry to implement key changes to improve both efficiency and productivity, a leading shipping expert says.
“We know what the problems are, so let’s start implementing solutions,” says Brian Hack, Managing Director at EES Shipping.
“This isn’t just about reducing costs for industry and business, ultimately consumers are the ones who stand to benefit from an improved supply-chain.”
Mr Hack’s comments come on the back of the Australian Competition and Consumer Commission (ACCC) container monitoring report released recently and the Productivity Commission’s final report into the Maritime Logistics System due for release this year.
Mr Hack says the findings of the ACCC report were not surprising, particularly commentary around the impact on consumers and the need for greater protection against “unreasonable detention fees.”
“The entire industry is well aware that increased fees and charges being passed onto cargo owners are in turn being passed onto consumers,” he says.
“We’ve also been highlighting detention costs for months now, with turnaround times for containers simply unrealistic, because of continued congestion and delays within the supply chain. It’s unreasonable to charge detention fees when cargo owners simply cannot access their cargo, through no fault of their own.
“That’s another charge that ultimately gets passed down the line, and onto consumers.”
Time to implement change
The Productivity Commission is due to hand down its final report this year following an inquiry into the Maritime Logistics System. The draft report notes that higher productivity at Australian ports is achievable and would deliver significant benefits.
The draft report also highlighted inefficiencies at our major container ports directly costs the Australian economy an estimated $605 million a year.
Mr Hack says the COVID pandemic shone a very public spotlight onto the industry.
“For the first time the general public was paying attention to the supply-chain and the bottlenecks and kinks within it.”
Mr Hack says these changes could be implemented immediately:
- Greater transparency and accountability for fees charged
There should be greater transparency around cargo costs and where the money is being spent – including fuel levies and infrastructure fees.
- Be proactive, not reactive
Now is the time to implement efficient practices, upgrade equipment and infrastructure, and upskill staff where possible, to ensure recent supply chain problems don’t arise during the next period of peak demand.
- Early container return incentive
While detention fees are charged for containers returned late, there is currently no incentive for the return of containers early. Cargo owners who can turn around containers within 24-48 hours should be given a credit – and incentives to achieve fast turnaround times.
- Improved industry awareness
Young people should be encouraged to take up careers within the shipping and logistics industry. There is also a need to increase public awareness about the vital role played by the shipping industry and the essential roles played by workers throughout the supply chain.
“After years of doom and gloom, I believe the industry is on the cusp of being able to implement a range of measures that will improve the supply chain and make it more efficient,” says Mr Hack.
EES Shipping is one of Australia’s major international freight forwarders. The WA based company was named Champion Transport and Logistics at the 2022 Australian Small Business Champion Awards.
