US matchback potential abounds amid new carrier fees

US matchback potential abounds amid new carrier fees

More than 90 percent of drayage operators indicated they have a customer base
dense enough to support street turning.
Photo credit: Shutterstock.com

Even as some carriers introduce fees tied to street turns, a survey of more than 60 drayage operators reveals that there’s plenty of potential to make such port congestion-easing moves, with the vast majority saying they can make matchbacks.

Ninety-three percent of the 61 US drayage operators surveyed by JOC.com in recent weeks say they have a customer base dense enough to support street turning, which requires the matching of importers and exporters using the same ocean carrier and schedules that sync up so that a container is emptied at roughly the same time another importer or exporter needs one.

More than three of four drayage operators surveyed by JOC.com in recent weeks say they perform at least three street turns per week, which, coupled with the vast proportion indicating they have enough density on the import and export sides to find street turn opportunities, suggests that there are broad opportunities to enable such moves.

The practice — also referred to as “matchbacking” — has come under the spotlight in recent weeks as shipping lines have introduced fees to facilitate such transactions, leading to cries from truckers that the fees are revenue drivers for carriers and are actually counterproductive in reducing port congestion.

Incremental improvement

A broader question, however, relates to the true potential for enabling matchbacks. While some industry veterans believe only about 5 percent or fewer of containers are street turned, JOC.com’s survey findings indicate that a preponderance of drayage operators do indeed make these moves regularly. Nearly 24 percent of respondents said they perform at least 20 street turns per week, and almost 53 percent indicated street turns represent 10-25 percent of their total moves per week.

Crucially, 52.5 percent of operators surveyed said they would be willing to work with other drayage firms to facilitate such transactions, while 42.6 percent said they might be willing, depending on the situation. The remaining 4.9 percent, however, said they would not be willing to do so. Since the efficacy of street turns is dependent on collaborating importers and exporters working with the same ocean carrier, any way to increase the pool of potential matches is important.

“We've been talking about street turns forever,” Ken Kellaway, CEO and president of RoadOne IntermodaLogistics, said at JOC’s Port Performance North America Conference in December. “We're going to talk about street turns until we’re dead. But in terms of matchbacks, we’re so bad today that anything is incrementally better. If we could even get to 15 percent, that’s huge.”

Last week, the container reuse platform Avantida said that Israeli ocean carrier Zim Integrated Shipping Services would begin offering street turn services in the United States via its system, joining Maersk Line. Maersk and Zim, along with HMM, kick-started the latest acrimony over street-turn fees by announcing they would charge $30 to $50 per transaction.

Avantida noted that its “fully digital process ... not only provides dispatchers and planners requesting street turns with an accurate, reliable response, it also reduces time, transport costs, and CO2 [carbon dioxide] emissions as truck miles are reduced.” The ocean carriers have defended the fees, saying they are meant to compensate for back office costs.

The software provider, acquired by INTTRA in 2017 before the latter was purchased by E2open late last year, said 130 transport and logistics companies have begun using its system in North America since launching at the start of 2019, and those firms perform more than 2,000 transactions a day across its platform globally.

Other matching platforms facilitating street turns and container reuse include Matchback Systems, Advent Intermodal Solutions, E*Dray, Voyage Control, and Container xChange. JOC.com’s survey found more than half of drayage operator respondents use a system such as those or an internal system to facilitate street turns.

The Uniform Intermodal Interchange and Facilities Access Agreement also maintains a Street Interchange Application designed to facilitate street interchanges and matchbacks. The application is free for members part of the agreement.

The other element to consider when facilitating matchbacks is chassis. One shipper told JOC.com a precluding factor to facilitating a street turn is determining what interchange the chassis on, and whether it's governed by an interoperability agreement.

A ‘fee-free’ solution?

One drayage provider questioned whether ocean carriers should be charging for street turns when the trucking operators are doing most of the work involved in such moves. “This will impact the number of street turns done internally and with other carriers,” they told JOC.com. “Street turns do help ease congestion at the ports by eliminating at least two moves [empty pickup/empty return].”

“Street turns are necessary in this industry and should be kept fee-free,” another drayage operator said. “This is only a convenience to the truckers due to ongoing congestion and equipment shortages at the ports. By street turning, we subsequently reduce congestion and lower labor needs at the terminals, so all parties benefit. It is imperative that we keep all equipment in profitable rotation, and street turning is one of the few ways that truckers, steamship lines, and ports are able to work in unison and benefit together.”

Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric. 
 
Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @ariashe_joc.