Cash Flow Concerns Bite as COVID-19 Coronavirus Crisis Continues The continuing COVID-19 Coronavrius crisis and resulting lull in container trades to/from Australia is having a worrying cash-flow impact on container transport operators, Australia-wide. Transport operators have significant "sunk costs" in their businesses, and the current severe trade lull sees expensive transport equipment idle and labour being laid-off or on brought-forward leave.
Evidence has also emerged of transport operator customers (freight forwarders and shippers) postponing or delaying invoice payments to transport operators. This is heightening the current precarious cash-flow situation for many transporters.
One of the largest cash-flow outlays for transport operators are the stevedore landside infrastructure (terminal access) charges and vehicle booking system (VBS) fees, which must be paid well in advance of the amounts being able to be recovered from transport customers. Additionally, empty container depot Notification Fees must be settled on very short payment terms.
CTAA has written to the major container stevedoring companies (Patrick Terminals, DP World Australia, Victoria International Container Terminal and Hutchison Ports Australia) and to Containerchain (who acts as the agent for the collection of Notification Fees on behalf of their empty container depot clients) seeking an extension of payment terms.
CTAA has also urged the empty container depots (via Containerchain) and the stevedores not to be too quick to pull the trigger on access cancellation if transport operators are under genuine financial distress during these current dire container trade circumstances.
CTAA fears that if stakeholders in the Australian container logistics industry don't pull together during this current crisis, the landside container transport landscape will be severely impacted, with long term participants exiting the sector. |