Shipping Jargon : Street Turn

  • Shippers are slamming “it” and terming “it” as appalling, insane and insensitive

  • Shipping lines defend their actions and clarified why they are charging “it”

The “it” here refers to a new charge called Street Turn..

In the process of shipping, once a delivery order has been issued for an import full container and the customer has unpacked it, they are required to return the empty container to a depot nominated by the shipping line..

Failure to return the empty container within the free time allowed for the customer/shipment may result in the client incurring demurrage/detention charges..

This is at one end of the spectrum..

On the other end of the spectrum, truckers have been doing certain activities with the empty containers without the approval of the shipping lines.. Activities such as reusing the containers for exports for other customers without the line’s approval..

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Carriers like Maersk Line, Zim Shipping, HMM and SM Lines are said to start charging Street Turn charges of between $40 and $75 for such containers used for both import and export activities, as from the 4th of February 2019..

The concept of Street Turn is, however, not new.. A number of companies such as USA based MatchBack Systems Inc. and Europe based Box Reload have been offering these services in their respective areas..

In the simplest sense, the way it works is that these systems find trucking companies and logistics companies who are looking for packing containers in a specific area/region and matches it with trucking companies and logistics companies looking to turn in empties in the same area/region..

When a match is found, these platforms handle the requests to seek approval from the shipping line to use their containers on a street turn basis..

This way, an import empty container can be used for an export booking without the empty container going back to a port or container yard..

street turn - shipping and freight resource

The logic is that this street-turn can lower trucking costs, result in improved utilization of drivers and equipment while reducing emissions and port congestion..

This is seen as not only a cost saving method for the truckers but also something that helps them reduce congestion, increase their truck turn around time and also control emissions..

While the shipping lines are not averse to any of the above benefits to the trucker (and the environment), the lines would like to be compensated for this..

The reasoning of the lines is that there are additional logistic and administrative burdens on the shipping line for the tracking, monitoring and ensuring that the container stays within their system and purview, whereas the trucker enjoys substantial savings from using this option and the shipper also doesn’t pay anything for this..

While Zim Lines, HMM and SM Lines have opted just to charge the trucker for this street turn, Maersk Line will offer this street turn service using the Avantida platform..

Avantida a computer-based platform based in Antwerp is owned by E2Open who also owns INTTRA and has been in business since around 2014 offering services in around 10 European countries and also Mexico..

The platform has been reported to have more than 4,000 registered companies on its books and facilitates an average of 2,000 transactions a day..

Luc De Clerck, CEO of Avantida, told American Shipper, “Since there are a lot of benefits for all of the stakeholders in the supply chain, we believe what we have implemented in Europe will also be very effective in North America.

De Clerck said his company’s platform is connected directly with liner companies and that if a request is made to perform a street turn, “you get an immediate response, an automated response from the back-end system of the ocean line, including all the business rules, and you are also 100 percent sure that you can execute the street turn and not be at risk for fines and discussions afterwards on who is responsible for a box during a certain time.

Avantida said: “Through the automated request process offered by Maersk, dispatchers and planners requesting street turns will get an accurate, reliable response in a matter of minutes. 

“So not only will they enjoy the time and cost savings of carrying out street turns, they will also benefit from a fully digital process and, undoubtedly, aid in reducing CO2 emissions as these efficiencies help cut unnecessary truck miles. 

Maersk will be charging a fee for the service, confirmed Avantida. “There is indeed a fee involved in the request to reuse an empty container on Avantida. This fee is deducted only when the street turn has actually been carried out. If the request has been declined by the shipping line or canceled by the transporter (even on the day it’s to be reused), the amount will not be removed from their balance. 

So this is the ideal situation for everyone one concerned right..??

The shipping line get to utilise their boxes both ways, the trucker saves on trucking and fuel costs, and both the importer and exporter are not paying anything extra..

 

Well, apparently not……….!!!

 

US agricultural shippers and forwarders have lashed out at these charges, labeling them as “insane” and “appalling” “huge mistake” and terming this as a backward step by shipping lines as per Loadstar..

Loadstar reported that the US Agriculture Transportation Coalition (AgTC) said: “The fees imposed on street turns must be one of the least constructive, poorly considered steps conceivable. 

“It injures all, including the carriers themselves, by adding to congestion and delay, which already makes marine terminals at some of our largest ports the greatest challenge to the US export/import supply chain. 

“Penalising street turns threatens one of the only measures available to shippers, carriers, terminals and truckers to address the unending congestion. 

What is a bit confusing to me is the vocal response of AgTC..

As far as I have understood, the street turn charge is not mandatory and as per Luc De Clerck’s statement to American Shipper, charging fees for street turns is a common approach in Europe..

All major ocean lines charge for street turning boxes,” he said. “It’s a common practice that for this flexibility and advantages we give to the users of the box — be it transport companies or other users, there is a fee charged.

As per Luc, the fees are defined by individual lines and that the fees announced by Hyundai and ZIM — of $50 and $40, respectively — are similar to what is charged in Europe..

So it is not a mandatory charge and the importers and truckers have a choice of using it or not.. Personally, I don’t understand why there is a resistance in this context..

What is your opinion in this case..?? Let’s take a vote..

 

Is the street-turn concept worthy and should there be an additional charge by the shipping line

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3 thoughts on “Shipping Jargon : Street Turn”

  1. I have never just street turned a container without the carriers permission. Those that do should be charged but those of us that are following the procedure that always has been in place should not be charged!

  2. Hi Hariesh, interesting practise especially as it is not established in ZA as yet. How would this affect a current charge such as Container Cleaning Fee?Would claims for damaged equipment be any more complicated by taking away the line’s opportunity to inspect their units upon empty turn-in? PS: Compliments of the season and all the best to you and Family for 2019.

    • Hi Carnied, thanks for the wishes and wish you the same.. Yes in such cases as street turns, there could be some loss of revenue (repairs from import containers) for the carrier and in some cases may also expose them to claims from exporters for providing damaged containers.. But presumably, all this would be covered by the shipping line in the street turn agreement that they would reach with the hauliers and clients..

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