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CONTAINER CRISIS


CARGO RISKS HEIGHTEN AT ASIAN PORTS DUE TO CONTAINER SHORTAGES


Global disruption to the shipping industry, still reeling from the impact of Covid-19, is presenting fresh security and supply chain resilience risks for Manufacturers and Logistics Service Providers.


In the latest Container Availability Index (CAx) update, Container XChange reported a significant drop of container availability across Asian ports and does not see the shortage situation improving in the coming months. Many shipping lines are facing difficulties in providing containers to exporters as a result of increased demand, reduced imports and port rotation issues. Even when they can secure a booking in this capacity-squeezed period, exporters continue to find they cannot source containers at depots, especially 40ft high-cube units.


Leading industry media sources continue to document the challenges facing companies, especially in the Asia Pacific region. These reports include…


Malaysia: Warehouses in Malaysian ports like Port Klang, Port of Penang, and Johor Port in Pasir Gudang are reaching maximum capacity and have insufficient storage spaces for containers. Authorities have urged faster cargo collection to clear congestion at ports.


India: India requires a 14-day quarantine for cargo from China, which affects the schedules of vessels from other regions too. The country’s busiest public harbor has warned of the scale of repercussions on trade as this problem continues. Comparing the month of August, Indian exports fell 12.6% year-on-year, the sixth consecutive monthly decrease.


Bangladesh: Imports have been negatively impacted by 30% while export volume for apparel has risen sharply as Bangladesh is the second biggest supplier to the global apparel trade. Authorities plan to free up more port space and destroy outdated, substandard and non-consumable cargo left at port yards for long periods to improve shortage situations.


New Zealand: The Port of Auckland says there may be challenging issues for the next 18 months as shipping lines try to return to regular schedules. A fatal accident in August, the peak export season coinciding with a tighter labor market, and unpredictable weather conditions for shipping have also resulted in a string of delays.


The cargo rush to meet time-tightened deadlines


To resolve this capacity crisis, many carriers have reduced the time allowed to pick up containers before export loading and for restitution. Logistics planning has, consequently, become more difficult as shippers expedite storage and transit processes to meet tighter deadlines, creating an environment which may provide new opportunities for criminals to infiltrate.


“The ideal risk management system should include several


layers of protection and be complemented with monitoring devices for real-time data and visibility of cargoes regardless of whether they are in-transit or in warehouses. These fundamental principles are at the core of TAPA’s security requirements for


facilities and trucking security,” said Lina Li, Chairperson of TAPA Asia Pacific.


Alternative storage for containers leads to questionable security


Some ports are transporting containers to other areas locally for storage and releasing of containers. Likewise, shippers are finding alternative facilities near ports to reduce transportation times. Insurers, meanwhile, have already warned about the additional liability and risk when storing containers at temporary off-dock facilities which they are unfamiliar with. Security regimes at these locations may have different standards or fall short in terms of security requirements such as fencing, guarding and surveillance, or in emergency protocols.


On top of these security concerns, temporary facilities also expose cargo and containers to damage. Ports have experienced multiple explosions this year, some without known causes. Most recently on 16 September, explosions triggered a huge fire at the port of Ancona, Italy, after midnight. The cause is still unknown. Companies utilizing temporary shortage spaces should review their security regimes and encourage operators to adopt TAPA’s Security Standards to reduce the potential risk exposure.


For more information about the TAPA 2020 Standards and certification across Asia Pacific, please contact the APAC Secretariat at info@tapa-apac.org


Sources: The Loadstar, JOC.com


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