Repositioning and finding empty containers has been a huge problem for the container shipping industry that has been exacerbated by more extensive supply chains and the containerisation of traditional bulk cargoes.
The Boston Consulting Group (BCG) estimated two years ago that repositioning empty boxes costs the industry US$15-20 billion a year, at the time equivalent to up to 8% of a carrier’s operating costs.
Empty containers made up a quarter of all the box movements in China, 29% in Europe and 15% in the US, BCG said. It added that 33% of the cost was due to carriers’ operational inefficiencies.
It later launched its own container repositioning platform BGC xChange which was subsequently spun off into a separate entity.
In an earlier survey, maritime consultant Drewry said repositioning an empty container costs a shipping line US$400 per box.
That at a time when box lines were haemorrhaging cash, posting multi-year losses until finally returned to the black last year.
A former commissioner at the Federal Maritime Commission (FMC), the US government’s shipping watchdog, even tells the story of how at least one person knocked on the FMC’s door seeking support for an initiative to find wayward containers. Such was the scale of misplaced and wrongly positioned boxes, the person thought he could make a living scouring the US Midwest using a pick-up truck and GPS system, and billing box owners for every container recovered.
CHS Inc, the US farmers’ collective, highlighted the problem of missing and wrongly positioned containers as an impediment to its wider shift to containerisation of farm products including grains.
Other US exporters, including meat and petrochemical producers, have previously warned exports were under threat because of container shortages.
Access to reliable information about container availability in the US has been hindered after the Department of Agriculture suspended publication of its weekly Ocean Shipping Container Availability Report (OSCAR) earlier this year.
That followed the dissolution of the Transpacific Stabilization Agreement and the creation of Ocean Network Express (ONE) by the Big Three Japanese container lines. Data for the OSCAR report was voluntarily provided by five box lines which subsequently shrank through consolidation “to a level that would not maintain confidentiality”, the department said.
While the focus of the problem has been on the US because of the imbalance between where export containers are needed and import containers end up, repositioning issues have affected other regions and countries.
The problem of repositioning containers and the shortage of export containers in Finland even became the focus of a thesis, sponsored by Maersk Finland, for a master’s degree.
While internet-based firms such as Track-Trace.com and shipsgo.com offer container tracking services, their main use is for consignees or consignors to tracked laden containers.
INTTRA, the electronic container shipping platform, has now entered the fray to help rebalance the mismatch between boxes and cargo by expanding the coverage of Avantida, which INTTRA acquired last year. Avantida is aimed at truckers, matching empty containers with shippers with products to export.
The system, which saves repositioning costs, time and reduces emissions and port congestion, has been rolled out in 11 European countries and Mexico and is expected to expand to cover North America and Asia later this year.
Longer-term Blockchain technology, together with the electronic tagging of containers, could also offer solutions to track and find wayward boxes while cutting repositioning costs.
Maersk and AT&A have already teamed up to monitor refrigerated containers.
However, while trials of Blockchain technology have focused on improving the processes involved in shipping goods in containers, there is yet to be a comprehensive Blockchain solution for the container shipping industry.
The cost of electronic tags is also expensive, preventing their use for all but reefer containers. Even so, industry experts believe the price of tags will fall below US$1 in the next five years, encouraging their use for normal dry freight boxes.