Harbour Link Blog Archive

Third Update of the Implementation of the Terminal Gate Compliance Initiative (TGCI) by Port Metro Vancouver Container Terminal Operators

Posted 2011-12-29 by Harbour Link in opinion

Since our last update (issued in October) about the implementation of the Terminal Gate Compliance Initiative (TGCI), Harbour Link has continued to work closely with the BCTA and the stakeholder alliance (“the Alliance”) comprised of The Chamber of Shipping (representing shipping lines) and the Western Canadian Shippers’ Coalition (representing forest products exporters).

The Alliance has continued to hold discussions with the terminal operators to achieve modifications to the TGCI that incorporate balance and fairness in the application of the TGCI and the ability of the industry to secure timely reservations, two way moves and improvements to the seamless flow of container trucking at the Gateway.

Unfortunately, little progress has been made to achieve the requested modifications to the TGCI and on December 16, 2011 TSI announced:

The introduction of a 3 day reservation window effective December 19th at its Deltaport terminal. This change to the reservation window was originally requested in August 2011 by the Alliance as a possible solution to achieving greater certainty in reservations with a proviso that a 3 month pilot test period be conducted without the imposition of penalties to enable the sector to assess the impact of such a change. TSI has rejected the pilot test period.

The TGCI will become fully effective January 1, 2012. This means that the 1st payable invoice for missed or cancelled reservations will be issued February 1st and be payable by February 28th, 2012.

The TGCI, as it stands, excludes the ability to cancel a reservation without penalty. Regrettably, the discussions between the Alliance and TSI on the permissibility to cancel a reservation without penalty at a reasonable time prior to the reservation date (by 1600 hours the day before) were rejected by TSI. The Alliance believes that, without inclusion of a reasonable cancelation period, the trading community will be charged for reservations cancelled for legitimate reasons beyond their control and the initiative will heighten the cost of exporting cargo via the Port of Vancouver.

We understand from the BCTA that members of the Western Canadian Shippers’ Coalition and the Chamber of Shipping have declared their intention not to pay cancellation penalties for reservations obtained by truckers on their behalf for the pick-up / delivery of their containers / containerized cargo at TSI facilities, until the proposed TGCI has been changed to be fair, objective and inclusive of a reasonable dispute mechanism.

The TGCI, as presently written for TSI operated terminals (Deltaport and Vanterm), requires a trucking firm to pay TSI invoices for the imposed penalty of $25 for each cancelled reservation within 30 days after the end of each month. If not paid, the trucking firm will be denied further access to TSI facilities, albeit that such reservations and cancellations are made by the trucker on behalf of their customers, i.e. importers, exporters, 3PL providers and shipping lines and are beyond the trucking firm’s control.

The announced position by the importing/exporting and shipping community to refuse to accept responsibility for the cost of the penalties that are to be imposed by TSI on the trucking sector for cancelled reservations, places us in the untenable position to have to refuse to accept responsibility to pay TSI penalty invoices after they are made on behalf of our customers. We understand from the BCTA that the trucking sector generally intends to take a similar position to refuse to pay TSI penalty invoices for cancelled reservations until such time that reasonable modifications are made to TGCI.

CIFFA has also noted in their latest news bulletin that the TGCI in its present form will drive up the cost of export trade. They cite the example of a vessel which, if delayed for just one day, will result in the need to cancel and rebook several hundreds of reservations, which will culminate in thousands of dollars in cancellation penalties, albeit that the cancellation and rebooking is made for reasons beyond their control. The same circumstances apply to import containers when a ship’s ETA is pushed back and also for the cancellation of reservations applicable to the evacuation of empty containers when a ship’s schedule is changed. There are myriad of similar legitimate reasons that cause the need to cancel previously made reservations.

The BCTA stakeholder Alliance is continuing to hold discussions with PMV and the terminal operators to achieve needed modifications to the TGCI, and Harbour Link fully supports this effort. We also remain hopeful that a mutually acceptable agreement will be reached with TSI to enable the adoption of a workable and fair TGCI that includes an acceptable reservation cancelation period without penalty. We believe an acceptable period would be by 1600 hours the day prior to the actual reservation day. After 1600 hours, it is both fair and justifiable for a reservation cancelation fee to be imposed.

We are concerned with the gravity of the cost impact the above penalties will have on the flow of trade via the Port of Vancouver and the possible dislocation that could flow from the actions by TSI to impose cancellation penalties without first achieving agreement to incorporate balance and fairness into the application of the TGCI initiative. We believe there is a need for PMV to intervene until the impact of TSI’s TGCI on the port’s customers and trade is known, and changes are made to the TGCI that incorporate fairness, balance, a cut-off-time to cancel reservations without penalty (already included in DP World’s TGCI) as well as quid-pro quo provisions and a dispute mechanism. Accordingly we encourage you to contact the President of PMV to voice your objection to a TGCI without the inclusion of quid pro quo provisions that provide balance and fairness in the application of the TGCI initiative.

We will continue to provide updates on this subject as additional information comes available.