New Zealand is currently facing a problem with the de-hiring of empty shipping containers with an estimated 40,000 unused containers awaiting transportation out of the country.
The issue is causing frustration among clients in the supply chain as containers sit in warehouses waiting to be collected, while trucking companies in turn wait for empty de-hire slots, according to a recent update from local freight forwarder Go Logistics.
This is leading to additional costs such as detention charges from shipping lines for containers that cannot physically be dehired and smaller importers with limited space having to pay trucking companies to collect the container and hold it in a “hubbing yard” while everyone waits for an empty de-hire slot (called a VBS).
“Neither the client or the trucking company feel they should carry this burden. There is often a significant administrative cost as well,” the company says.
Go Logistics says the problem is complex and not and necessarily due empty containers not being “evacuated” fast enough out of the country and therefore filling up yards leaving them with no capacity.
“This is not a new problem; many will remember that at the height of Covid we had an identical problem. Then we were told it was a lack of space and services to evacuate the containers from New Zealand that lead to the high inventory.
“Perversely some are now saying it’s the new players and more vessel calls into New Zealand that has led to this same issue – too much inventory. The solution however remains the same – the empty containers need to be ‘evacuated’ onto to ships leaving New Zealand.
“In the meantime, we do note however, much like other parts of our wider economy, the crisis of the past two years has not necessarily led to an immediate investment in new infrastructure that would alleviate some of these problems now. Hence the likelihood of a quick solution seems unlikely with Auckland and Tauranga locations at full capacity.
“The lack of labour/Covid stand down periods are still an issue: we are aware of a number of trucking companies that are still short of drivers or have high absenteeism rates due to the compulsory stand down periods that are still in place (as an aside, surely it’s time to review the current 7 day period in 2023 to bring us in line with other nations?) meaning even when there are slots available, there may not be an available driver to collect the cargo.
“Likewise, we understand the de-hire yards themselves are lacking in staff for similar reasons leading to further delays. It should also be pointed out that these yards do not currently work 24/7 either.
“A lowering of export volumes or containers suitable for exporting: a quick glance at our balance of payments will show that imports are continuing to dominate exports and there is anecdotal evidence of weakening export demand. Add in seasonal issues such as the Christmas period and you have less containers being re-used for export currently. Also, not all import containers are suitable for exporting – especially food grade commodities – and again you get an imbalance.”
Go Logistics notes that several lines plan to do larger container evacuations in the coming weeks to reduce their empty container inventory and that will be “welcome news”.
