Labour Issues Loom on Port Horizon

Congestion Eases, But Staff Still in Short Supply

By Iain MacIntyre

In a feature story from Issue 3, 2023 of Breakbulk Magazine, we look at how port labour shortages and high handling costs threaten breakbulk volumes in Asia and Australasia.

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 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 labour 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 labour 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 labour 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 labour 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 labour 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 analyses and monitors port congestion, delay and labour 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 and 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 bodies could better inform and align themselves with the actual demand for breakbulk port operations.

“China does well, as they are the main exporter for breakbulk and project cargo such as steel and equipment. They heavily invest not only in port infrastructure but also in specialized equipment such as cranes, trained personnel, ample cargo lay down and storage area, and road and rail access to the terminals. This is a model we would like to see replicated elsewhere around the world and we are lobbying hard for this at every level.”

That said, he noted that breakbulk and project cargo import markets often find themselves in a difficult position. “They tend to mainly invest in container ports and landside infrastructure – despite needing to import most of their breakbulk and manufactured goods. As a result, the infrastructure for the import of our cargo segment remains underdeveloped in many regions.”

However, he recognized that it can be difficult for governments to properly assess the demand for required infrastructure, as breakbulk project cargo imports are sensitive to highs and lows and depend on the progress of third-party domestic and inland projects, general infrastructure developments and so on.

Oceania Port Perspectives

Julie Wagener, spokesperson for New Zealand’s largest import port, Ports of Auckland, or PoAL, noted a “slight decrease” in breakbulk volumes over the past six months and expects those levels to “continue in the short term.”

However, having historically had extremely bitter clashes with unions, PoAL is heralding a breakthrough new agreement that will support breakbulk and other cargo trade.

“The relationships with our unions have never been stronger at PoAL, particularly with our largest union, the Maritime Union of New Zealand (MUNZ),” Wagener said. “We have been partnering with MUNZ on a number of projects including a new salary arrangement and rostering schedule for stevedores, and a new Stevedoring Code of Practice.”

Port of Tauranga spokesperson Rochelle Lockley, whose port is both New Zealand’s largest overall and largest export port, said that her team was “not aware of any significant issues” regarding handling breakbulk cargo – “except for the big one: labour supply.”

Some of the biggest challenges faced by European ports will be the focus of a mainstage panel session at Breakbulk Europe 2023 in Rotterdam. The Role of European Ports in Supply Chain Efficiency: Challenges, Opportunities & Demand will take place on Thursday 8 June from 11:00-11:45.

PHOTO: breakbulk operations at Port of Tauranga. CREDIT: Port of Tauranga