Empty container repositioning is a term to describe how to arrange empty containers to where they are needed most. An all-too-common scenario: A Carrier has 200 empty containers in Hamburg that must be transported to Asia to carry export cargo. None of the carrier’s northern European customers’ needs these boxes to ship cargo to China. That’s why the carrier needs to reposition empty containers from Hamburg to China and pay approx. $500 per container, mainly fees charged by terminals and trucking companies. Why does the empty container problem exist and what can you do to avoid repositioning costs?
Why is every third container being moved empty?
Equipment flows typically are not balanced in opposing direction. China exports more than they import, that means a carrier must inevitably transport empty containers from Europe or Northern America to China. Approximately two-thirds of all movements of empty containers arise from such structural imbalances between countries.
Without being too pessimistic, we’d say that it’s hard to change trade imbalances for now, but carrier specific imbalances could be avoided. Roughly one-third of repositioning costs arise from limitations of their own operations. Having to move empty containers is hard to avoid for carriers that have their customers scattered among port and inland destinations within a given country or with an imbalanced portfolio of export and import business. Sometimes also sales teams contribute to a high number of unused containers by focusing on increasing head-haul volume rather than optimizing container flows. Also, delays and the absence of direct vessel or inland-network links between locations as well as problems with forecasting supply and demand lead to the problem of moving empty boxes from surplus to deficit location.
How expensive is empty container repositioning?
The costs of repositioning empty containers amount to as much as $20 billion per year industry-wide. Between 60 to 75 percent of total repositioning costs are handling fees for terminals, depots and intermodal operators. The remaining repositioning costs include intermodal transport provided by rail truck or barge operators. For container owners that don’t own vessels such as NVOCCs or leasing companies, it is even more expensive as they have to pay for slots as well.
How to avoid empty container moves?
Approaches to reducing the costs of moving empty containers include negotiating better rates with terminals, depots and intermodal operators, forming partnerships with trucking companies or procuring repositioning services with other carriers. There is also IT solutions to optimize flow forecasting and planning or services for “triangulating” hinterland movements.
At Container xChange we help the industry players collaborate more efficiently at scale and developed the world’s first platform connecting users and suppliers of container equipment to avoid containers being moved empty. The platform offers more than 300 000 potential opportunities to interchange containers in more than 2500 locations. The average savings is $200 – $400 per container, arising mainly from the avoidance of expenses related to land transportation and the use of terminals. Scaling up this impact to the whole industry, the saving potential with xChange increases to $5 billion to $7 billion annually. Reach out to us for more information if you struggle with empty container repositioning and book a free demo with our expert team now.
How big of a problem is container repositioning for you and how do you solve that issue? Let us know in the comments below.