Shipping lines ‘charge companies for containers they can’t return’

Consumers end up footing the bill if businesses have to pay rental fees for shipping containers they can't return, a freight association warns.

John Kirk-Anderson / Stuff

Consumers end up footing the bill if businesses have to pay rental fees for shipping containers they can’t return, a freight association warns.

Foreign shipping companies are insisting that New Zealand companies pay rental fees on empty shipping containers that companies cannot return due to congestion at the shipping companies’ own depots, according to an industry association.

Customs Brokers and Freight Forwarders Association (CBAFF) chief executive Rosemarie Dawson said some companies had disputed the charges and refused to pay, only to have their shipping company then cancel their accounts.

The problem was costing some businesses “thousands of dollars,” she said.

“One of our members was charged $8,800 in detention fees for a container.

“They will typically pass these costs on to their customer and ultimately these will be passed on to the consumer.”

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Freight forwarders and trucking companies use an online system to book time slots to return empty containers to depots, and in the past they could usually arrange a depot with an hour’s notice, she said. .

But they now frequently found that there were no slots available for four or five days, she said.

“Some shipping companies, regardless of a company’s ability to ‘lease’ containers, continue to charge companies for holding containers longer than expected.”

Dawson said the CBAFF is awaiting advice later this week on whether the charges are legal.

The Commerce Commission anticipates a complaint about shipping company practices, but suggests it may not fall within its jurisdiction.

Alexander Robertson / Stuff

The Commerce Commission anticipates a complaint about shipping company practices, but suggests it may not fall within its jurisdiction.

She said the Commerce Commission is aware of the situation, although the CBAFF has not filed a formal complaint.

“The challenge is that the problem is immediate and Commerce Commission investigations usually take time,” she said.

A commission spokesman said he understood the CBAFF was considering filing a complaint, which the commission would assess “in the normal way” if received.

But it was “unclear whether this is a matter that could fall under the Commerce Act or the Fair Trading Act for the commission to consider,” he added.

Dawson understood that the US Federal Maritime Commission had considered similar issues and said the CBAFF had asked the Department of Transportation to push for a six-month moratorium on detention bills “until the container situation voids is attenuated”.

The ministry has scheduled an invitation-only workshop in Auckland on Monday to discuss the wider supply chain issues facing importers, exporters and shipping companies in the wake of the Covid crisis.

Dawson expected that the difficulties faced by businesses in returning empty containers would be one of the issues that would be raised at the workshop.

Stronger-than-expected consumer demand for the goods along with a reduction in ship visits meant there were more empty containers than usual, she said.

This latter problem is expected to persist for months, she said.

Mark Scott, managing director of the New Zealand branch of shipping company CosCo, seemed hopeful that a solution would be found.

CosCo is understood not to be one of the most aggressive companies when it comes to charges.

All of the supply chain congestion would be discussed at the ministry’s workshop on Monday and “hopefully some short-term solutions will come out of it,” Scott said.

“We need to make sure everyone has the opportunity to return their boxes.”

The situation varied from line to line and depot to depot, he said.