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LABOR ISSUES LOOM ON PORT HORIZON
Congestion Eases, But Staff Still in Short Supply
By Iain MacIntyre
Regions: Asia, Australasia
Problem: Port labor shortages and high handling costs threaten Asian breakbulk volumes
Solution: Relationships key to ensuring breakbulk handling can co-exist with container moves
Pandemic-related congestion at breakbulk ports around the world may well have eased alongside other positive developments, but multipurpose vessel operators are still having to proactively navigate a range of ongoing and different challenges.
Singapore-based AAL Shipping commercial director Felix Schoeller credited China’s reopening at the end of 2022 as a key contributor to a wider return to more “normal operations.”
“Due to the rise in container bookings over the last couple of years there were fewer terminals that accepted breakbulk and project cargoes,” he told Breakbulk. “It was certainly easier for port authorities to manage quick vessel turnarounds of simple container or bulk commodities rather than accepting a vessel at berth that took between three-to-six days for the loading and discharging of complex project cargoes.”
Schoeller noted that process inefficiencies at various ports have also diminished. “During Covid there were understandable dramatic inefficiencies due to labor shortages, port closures, congestion and other measures to fight the pandemic.” Additionally, there is increasing alignment in charging between ports due to “transparency across the world for standardized cargo costs.” In Asia the cost for port calls and labor for breakbulk and project cargoes are today comparable across China and Southeast Asia.
However, breakbulk cargo is “still getting less attention than it needs,” he said, which further limits port options for MPV carriers. “If this project and breakbulk cargo trend continues there might be further congestion and labor shortages. The Middle
East is an area where despite strong imports of project and breakbulk cargo, port capacity is decreasing.”
Schoeller also acknowledged the impact of a strong union presence in, particularly, the U.S. West Coast, Canada, Europe and Australia.
“This has exacerbated due to the freight increases over the last few years. Stevedores across the world –and especially unionized labor pools – have raised their fees dramatically. For instance, in the West Coast of the U.S. this has increased by 25 percent, compared with a year ago.
One of the major consequences of these cumulative factors is that MPV carriers frequently face unforeseen variable costs relating to port calls and delays of voyages, Schoeller said.
“As these delays often fall under the responsibility of the shipping line, they cannot always be recovered through freight. Furthermore, it makes scheduling very hard, which is a big problem for clients that have tight supply chain commitments.”
Continued Breakbulk Focus
On a positive note, Schoeller credited the main hubs of Shanghai, Taiwan, Rotterdam, Antwerp, Hamburg, Masan and other Korean ports, Houston and U.S. Gulf ports for their continued focus on breakbulk cargoes. “[They] support our industry with prime port space and labor availability. This is one of the reasons why AAL pays so much attention to building strong, direct local relationships with our port authority and in-port service partners worldwide – to ensure that every operational stakeholder is invested and our operational objectives transparent and understood.”
Regarding measures individual carriers can take to best navigate such issues, Schoeller said AAL strives to provide transparent and smooth operations, and closely analyzes and monitors port congestion, delay and labor situations across all ports that it calls regularly.
“This demands close communication with all key stakeholders, to ensure safe, fast and efficient operations.
“We further mitigate potential risk by having several terminal/port options within our main regions, to be able to react quickly to any problems and unforeseen circumstances. Due to our regularity in North Asia, Northern Europe and the U.S. Gulf, we offer clients flexible options with predicable estimates in waiting times, costs and operational performance – ensuring that they receive the best performance possible.”
Outside of the MPV carrier and port realm, Schoeller believes local governments and administrative
Port of Tauranga sees labor supply as the big issue when it comes to breakbulk port handling in the region.
Credit: Port of Tauranga
