Ocean carriers stick it to truckers with ‘street-turn’ fee
February 8, 2019
Some of the biggest ocean carriers have begun charging container truckers for “street turns.” Think of it as a tax on efficiency.
What’s a street turn? It simply means delivering a load, then using the empty container to pick up another load. Without a street turn, you would return the empty container to the port, pick up another empty and go back out for the pickup.
They’re actually charging money for that?
Yes they are. Ocean carriers like Maersk, Zim, and Hyundai have imposed street-turn fees from $30 to $50. A newer company, SM Lines, is charging $75. SM doesn’t call it a street-turn fee, but for the trucker paying the $75 it feels like one.
Can you imagine a shipper or broker charging you to provide another load for the trailer you just emptied? Could you imagine having to return to a terminal with an empty to grab another empty before you could pick up the next load? Of course not. In port drayage, things are different.
Most land truckers own their trailers or lease them on a long-term basis. With the possible exception of dropped trailers, shippers don’t pay separately for a trailer. In ocean shipping, containers are usually billed to the shipper by the trip plus any detention charges. So are the trailer chassis that the containers ride on. That means two pieces of equipment, each subject to possible detention, are on the shipper’s bill. That bill includes all the charges related to the original bill of lading.
Equipment, detention and so forth could be billed separately, but shippers prefer a single bill for everything involved with a single shipment, the ocean carriers explain. They also say it’s very complicated to reassign a container and chassis from one bill of lading to another in midtrip – during a street turn. Lots of paperwork, you see.
But that usually costs less than bringing a truck back to the port after each delivery. If it doesn’t, why has the industry been doing street turns for years? Street turns aren’t new, only the fees.
True, some street turns can be tricky to document. Say a port trucker hands off an empty container and chassis to a separate trucker for the account of a different ocean carrier. That can get complicated in the back office, so it doesn’t happen often. Some ocean carriers won’t allow it at all.
But according to David Garofalo, a spokesman for the Intermodal Association of North America, most street turns involve the same ocean carrier and the same trucker. And as it happens, technology companies have introduced and some ocean carriers use software to automate the street turn documentation process.
Street turns clearly save money. And every truck that does not have to return to port between stops is one truck that does not have to sit in line waiting to access the port. Street turns reduce congestion – a serious problem, particularly for the busiest ports.
So if street turns are so beneficial and it is getting easier to process them, why are the ocean carriers charging for them now? For years, the costs have been built into what shippers have paid ocean carriers for door-to-door international service.
Ocean carriers don’t really answer that question. They only talk about how they should be paid for that back office work.
But I have a guess. They’ve imposed street-turn fees simply because it occurred to an ocean carrier executive that they could. That guy has been promoted. Other ocean carriers seeing a cash opportunity followed along.
As it turns out, shipper organizations and other groups recognize that fees charged to truckers will eventually turn up in their bills. And they don’t like fees that discourage operational efficiency and possibly increase congestion. They’re complaining loudly.
Will it have an effect? Don’t count on it.