Shipper arguments that shipping lines should pay for trucks to come into a container terminal are fundamentally flawed. Find out how, and why…
What is a customer?
The Merriam-Webster dictionary definition of a “customer” is “one that buys a commodity or service”. To “buy” means to acquire possession of, or the rights to use, goods or services in return for the payment of money.
What is a terminal access charge?
It is a fee for access charged by a container terminal to truck operators that want to sent their trucks into the terminal.
Does that mean truck operators are customers of container terminals?
If a container terminal operator allows a truck to access its terminal on condition that the truck operator will provide financial compensation for that access, then the truck operator has used a service in return for the payment of money.
In that situation, the trucking company is, by definition, a customer of the container terminal operator.
There are arguments that shipping lines should pay the fees for service that are legitimately charged to truck operators. Why?
Well, as far as we can see, no good reasons have been put forward. The arguments are propaganda, basically.
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So where’s the propaganda?
A bald assertion of an obviously true fact is what’s called a “truism”. Think of things like “water is wet” or “Sunday follows Saturday”. There’s nothing inherently wrong with truisms, it’s the way they are used by people who want to persuade you of a certain viewpoint… a viewpoint that usually benefits the person trying doing the persuading.
They’re particularly useful in propaganda because truisms are, well, true. People accept them as true without ever thinking to question them or that truisms can be misleading in certain circumstances. They can be a good way to bypass a person’s mental defences.
Persuaders link together truisms, or truisms with persuasive statements, that, together, create an impression in the minds of people who read them.
In the examples below, you can see how truisms have been used with the intent to persuade the reader of something:
- “There are some things money can’t buy” [truism] paired with…
- “for everything else there’s… [X-brand of credit card]” [persuasive statement]
- “for everything else there’s… [X-brand of credit card]” [persuasive statement]
- “X-brand beer is good for you” [persuasive statement] paired with…
- “good things come to those who wait” [truism; but bad things also come to those who wait too]
- “good things come to those who wait” [truism; but bad things also come to those who wait too]
- “A diamond is forever” [truism… sort of… diamonds will list an awful long time if not, technically, forever]…
- this was dreamed up by copywriters to persuade people that diamonds weren’t only for rich people and that no marriage proposal was complete without a diamond ring
You can probably think of a few more.
How does that work?
So, let’s assume I want other people to believe that you have rolled a ball downhill.
Consider the statements:
- “You pushed the ball”
- “balls roll downhill”; and
- “the ball is at the bottom of the hill”.
If a person reads these statements, he or she could conclude that the ball is lying at the bottom of the hill because you pushed it downhill, right? Wrong.
The phrase “balls roll downhill” is a truism. Other than proving that balls do, indeed, roll down hills, it doesn’t prove anything else. You might have pushed the ball on a flat surface. You might have pushed the ball only a little bit. Someone else might have picked up the ball and put it at the bottom of a hill.
How can this be misleading in the logistics context?
Shippers are promoting the truism that “businesses need to deal with unavoidable costs by absorbing them or passing them on”. They are also using the truism that “shipping lines are the commercial customers of stevedores”.
Yes, they’re true. That’s because they’re truisms.
And they don’t prove anything else, in the same way that the statement “balls roll downhill” don’t prove anything other than the fact that balls, do indeed, roll downhill.
But just putting the two truisms together doesn’t prove the shipping lines should pay the various business costs because they are the commercial customers of stevedores… although it does certainly suggest that meaning. But it doesn’t prove it. It’s a misleading impression, in other words.
Putting the two truisms together disguises, distracts, and mis-leads because container terminal operators have two different but similar products for sale to two different sets of commercial customers. One product is access to the terminal for ocean going ships and the other product is access to the terminal for trucks.
It doesn’t logically follow that one set of customers should completely subsidise the for-profit operations of another set of customers simply because they are both using the same commercial supplier.
Show me a worked example.
Think of it this way: the operators of big heavy freight trucks, say, trucks in a Double-B configuration, are charged access fees by a central depot to enter the depot and to use their heavy-truck specific facilities to unload and reload cargo to / from their trucks.
Similarly, the central depot decides to charge the operators of light suburban commercial delivery vans for access to the depot and for using the light commercial van-specific facilities to unload and reload cargo to / from their vans.
The central depot sends invoices to the light delivery van operators, who then promptly demand that the heavy truck operators pay them. What’s the rationale? The light commercial van operators claim that heavy truck operators should pay all of the depot’s invoices because the heavy truck operators are commercial clients of the central depot.
But the heavy truck operators would immediately, and quite correctly, point out that the light commercial vans are also the commercial clients of depots and there is no reason for the truck operators to pay the bills of the van operators.
The truck operators would tell the van operators to go and pay their own bills (and they’d probably say a few other things too, but we won’t publish them here).
So what’s the truth?
All businesses have to deal with everyday costs such as rent, labour and power. Some of those costs are absorbed by the business in question. Other costs can be passed on in negotiations and service charges. Some business have large assets for which they can charge access fees.
One of those types of businesses are container terminal operators. They can charge for access to their container terminals. It is completely up to the stevedore to decide who it wants to charge for access to its terminal.
Stevedores long ago decided to charge shipping lines for ship access. Stevedores have now also decided to charge truck operators for truck access. Truck operators do not like this new development because it reduces the financial benefits (free access to a terminal and its trucking facilities) that they formerly enjoyed.
Knowing that they don’t want to pay for it, truck operators realise that they simply do not have the ability to outright refuse to pay. So they decide to carry out a public relations campaign to persuade the industry and politicians that some other business – shipping lines – should pay the new costs.
The rationale for this claim is that because two different types of business use the same supplier then that other type of business should pay the trucking operators’ costs.
A careful analysis of the truck operators’ claims show it is wholly without substance and is little more than propaganda.
Dismiss.
