Ports globally handle more than 800 million TEUs a year, with the trend looking to increase significantly year-on-year. As the struggle for space is an ongoing issue, vessels are often overbooked and port omissions become more frequent, causing containers to roll over.
A container rollover is when a container is not loaded on the intended vessel, due to various reasons such as late gate in, incorrect or missing documentation, vessel overbooking, port omission, among many others.
When this happens, the container is typically loaded onto the next sailing or an alternative sailing, which can cause delays for all related parties. Therefore, it’s important to understand what can cause a container to roll over and what the next best steps are.
All of these aspects, we’ll be discussing in this article, while also dedicating a section about best practices on how the impact of container rollovers can be reduced or potentially even completely avoided.
What Causes Container Rollovers?
Containers can roll over due to a number of reasons. While the main root cause is commonly because of carrier-related issues, they can also happen due to reasons related to shippers, consignees, truckers, customs brokers and freight forwarders. Let’s take a closer look.
Shipper Related Reasons
A shipper’s primary objective is to fulfil the order and to ship the cargo on time. However, this may not always be possible and this type of scenario may cause a container to roll over. Here are some of the most common shipper-related causes:
- Goods Are Not Ready – Common issues such as quality, production downtime, delayed delivery of raw materials and manufacturing may lead to container rollovers, as the orders may not be processed on time, therefore, missing the vessel.
- Payment Not Received – If the shipper and the consignee do not have credit terms or are in the process of building a mutually benefiting relationship, the exporter may not ship out the goods if the payment or other contractual obligations have not been fulfilled.
- Delayed Stuffing – This is usually the case if a shipment contains multiple containers and not all containers are loaded on time. It could also be due to MHE or cargo readiness related issues.
- Delayed Documentation – Shipping documentation that is not coherent or incorrect may result in improper declaration affecting the customs clearance process or the bill of lading. A shipper may have to recount and inspect the items before shipping out and ensure accurate details of the packing list, invoice, and other documents.
Consignee Related Reasons
Although this is more of an uncommon scenario, consignees may also cause containers to roll over. This mainly happens when consignees request to have a later sailing, while the containers have already gated into the port.
- Not Ready to Receive Goods – The consignee may not be ready to receive the goods due to various reasons such as limited warehouse space or insufficient staffing at the destination. In this scenario, they may ask the shipper to hold the shipment.
- Payment Not Settled – The importer or consignee has not yet made the agreed payment or is still currently working with its bank to fulfill all of the necessary requirements. The shipper may then hold the shipment at the port of loading until the payment is successful.
Trucker Related Reasons
Trucking companies who move the containers between the shipper’s premise and the port may also cause unintentional container rollovers. Here are some of the main causes:
- Failed to Gate In On Time – The trucker may have failed to gate in the container in time causing it to miss the vessel loading cut off time. This can happen due to traffic, congestion or other unforeseen circumstances.
- Delays in Laden Pickup – The assigned trucker may have to prioritize containers from other customers and therefore is not able to pick up the cargo to meet the intended date and time requested by the shipper.
- No Truck/Trailer Available – Truckers can occasionally experience prime mover/cab and trailer shortages. This typically happens during peak season, where trucks and trailers are highly in demand with limited supply.
Customs Broker Related Reasons
Custom brokers may also cause containers or entire shipments to roll over, when cargo is misdeclared or further customs inspections are required, in order to clear the cargo for export.
- Misdeclaration – Shippers must ensure correct cargo details are declared and submitted timely and accurately to the customs broker. A misdeclaration may cause a delay in clearance, which could mean that containers may not be loaded on the intended vessel.
- Customs Inspection – Physical container inspection may be needed by customs, border security, or port authorities in certain scenarios. It’s best to check with the customs broker beforehand, as this depends on the type of cargo amongst various other factors.
- Cargo Restrictions – Cargo that has a restricted export status may require additional inspection, documentation or requirements which may delay the overall export customs clearance process and potentially lead to a rollover.
Freight Forwarder Related Reasons
A freight forwarder is responsible to handle documentation and communication between shippers and their vendors, such as truckers, customs brokers and other parties. Let’s take a closer look at when freight forwarders can cause a container to roll over.
- Delayed Documentation – Freight forwarders need to process and pass on documentation between local regulatory agencies, custom brokers, truckers and shipping lines. A delay in documentation, especially with shipping lines, may cause containers to be shut out and miss the sailing.
- Delayed Communication – Communication has an equal importance when it comes to the scope of a freight forwarder. Examples include unconfirmed rate filings, delayed transmission and communication with shipping lines, which in turn may cause rollovers.
Shipping Line Related Reasons
The majority of rollovers are caused by shipping lines. The most common reasons include vessel overbooking, port omissions, vessel issues and misplanning. Let’s take a more detailed look at each of these potential causes.
- Overbooking – Carriers maximize revenue by ensuring that vessels achieve the maximum utilization. When this happens, it may cause vessels to be overbooked and certain containers may be rolled. This is particularly prominent during peak seasons.
- Port Omission – When vessels are full or have not enough containers to pick up, they may omit a particular port. This means that containers that are intended to be loaded onto the vessel must wait for the next sailing or settle for an alternate route.
- Vessel Issues – Extended repair due to mechanical or technical issues may deny a vessel from leaving the port of loading.
- Misplanning – Incorrect vessel stowage planning or accidental planning errors may cause certain containers not to get loaded on the intended vessel and therefore rollover
Other Related Reasons
There are also several other reasons that may cause containers to roll over. These can be port related or even external issues that are uncontrollable.
- Port Operations – Port congestion is another reason for container rollovers. While ports are expected to have vessel arrival forecasts, the actual situation may differ greatly, especially when ports are congested. There can also be technical or planning issues at the port that prevent containers from getting loaded onto the vessel.
- Force Majeure – Unforeseeable circumstances such as earthquakes, extreme weather conditions, riots and various other scenarios can prevent vessels from being loaded or even berthing.
Effects of Container Rollovers
When a container experiences a rollover, it will usually sit at the port for a period of time until the next course of action has been decided. Either the shipper or the consignee would have to possibly shoulder unwanted storage and demurrage costs that may occur.
When this happens, it increases the overall costs of the shipment and also requires additional planning and coordination. Documents may have to be amended and resubmitted.
What Happens After a Container is Rolled over?
When a container is rolled over, it has missed its intended sailing. This means that it has to either wait for the next sailing, which is typically a week later, or get shipped through an alternative route. There are also more costly alternatives, which we’ll go through.
- Option 1 (wait for the next sailing): the first option is to wait for the next sailing. As most vessels usually have a weekly sailing it would mean that the shipment would get delayed by a week.
- Option 2 (select an alternative route): another option is to have the rolled over containers shipped through an alternative route to the destination. This could mean that the shipments will be transshipped through a different port.
- Option 3 (change to another carrier): changing the carrier requires unloading the container and loading it into the other carrier’s container. This usually requires regulatory permission from local customs and incurs additional fees from port and warehouse operators.
How to Avoid Container Rollovers?
While rollovers are not entirely in the shipper or consignee’s control most of the time, there are certain things that can be done to lower the risk and potentially avoid this from happening. Let’s explore the best practices on avoiding container rollovers.
1. Place Advanced Bookings
Placing bookings in advance will increase the chances of getting space on a vessel and decrease the risk of containers getting rolled over. Carriers publish schedules regularly, which are accessible online. Working with a 3PL or 4PL may also reduce the risk as they are able to manage booking processes more efficiently.
2. Ensure Shipping Documents are Accurate
Make sure all shipping documents are consistent, in good order and comply with local regulatory agencies. Ensuring that the shipping documents are correct is the responsibility of the shipper and should therefore be prioritized.
3. Split Shipments
If one of a few containers of a larger shipment may have issues the entire batch may get rolled, as it belongs to one shipment. Therefore, consider splitting shipments into multiple bills of lading. Take note that this could increase overall shipping costs.
In some scenarios, you are also able to split the shipment after a few containers of a larger batch have been rolled. Here it’s vital to communicate this to your carrier.
4. Practice Effective Communication
Get updates from carriers such as vessel schedules, check holidays at origin and destinations, and establish a good relationship with your carriers. This will enable you to receive information quickly and you’ll be able to decide on the next course of action. Don’t hesitate to ask your carrier for options and recommendations.
5. Avoid Peak Seasons
Shipping out goods before major holidays or peak seasons will reduce the risk of dealing with container rollovers. For example, Chinese New Year can have negative effects on the supply chain, due to container imbalances, equipment shortages and insufficient vessel space.
6. Buffer In Shipping Time
Keep your consignee updated with the latest market updates and inform them if you are anticipating any delays. It may be a good idea to buffer in more time in the overall shipping window when committing a delivery date to your customers.
7. Avoid Transshipments
Transshipments typically have a higher rollover rate than direct sailings. Therefore, whenever possible – or with urgent cargo – it’s advised to use carriers that offer direct sailing options.
8. Work With Reputable Service Providers
It’s always encouraged to work with reputable and established service providers such as haulage companies, custom clearance agents and carriers. Also consider not putting all your eggs into one basket, by diversifying your pool of service providers.
9. Find Alternative Sailings
If your containers have been rolled over or are being anticipated to roll over, it’s best to check with your current or other carriers for different sailing options. Oftentimes, there are alternative routes. You may also explore moving the shipment with another carrier.
10. Engage 3PL or 4PL Service Providers
Working with third-party logistics (3PL) and fourth-party logistics (4PL) providers can improve shipment planning and coordination processes in your supply chain. This can potentially reduce the risk of rollovers, as shipments are closely monitored and escalated if such circumstances arise.