The under-utilisation of empty shipping containers results in the loss of billions of dollars per year.
The adoption of digitisation and use of predictive technology by carriers allows for huge savings potential and increased efficiency.
In a study performed by Ocean Shipping Consultants, the Pacific Northwest ports of the US saw more than 900,000 empty inbound and outbound shipping containers in one year. The relocation of each of those containers costs hundreds of US dollars.
The Boston Consulting Group (BCG) estimates the oversupply of containers will continue and average between 6% – 9% in 2020.
The positioning of containers is a predictive problem, according to Asparuh Koev of Transmetrics. Shippers must know where the containers are needed next for reposition, but also need to efficiently utilise working stock containers as opposed to the buffer of safety stock containers. The safety stock can be significantly reduced based on proper demand modelling if it is treated as a statistical prediction problem, Koev explained.
One of the more recent developments has been the refusal of countries across Asia to accept waste products from Europe, increasing the number of empty containers arriving back in the region.
Richard Brough, the Technical Advisor for International Cargo Handling Association, said, “If you look at China-UK trade, we have 20-foot containers inbound and 40-foot containers on the outbound leg, immediately you have an imbalance and more empty container capacity heading for Asia.”
“China has now banned the import of bricks, rubble, paper, metal, plastic and other Asian countries are following suit. As a result there has been an increase in empty containers heading back to Asia from Europe,” Brough added.
Repair and maintenance of containers is also an element of the process needing scrutiny. A more efficient and cost-effective method is to repair containers along the repositioning route in the lowest-cost location rather than repairing where it’s needed – typically the high-cost location.
Digitisation has yet to become the norm in the shipping industry. Only a few companies have gotten on board with the streamlining technology. According to BCG, digitisation possibilities include box tracking, empty-container repositioning, cargo routing, forecasting, document management, network design, and pricing.
Better data recovery comes from the process as well. Frequently, there is not a clear data collection system; data is sent through various devices from each shipper. With digitisation, there is clearer business process management, and the optimisation of empty containers is more easily predicted.
Predictive technology is used by assets owners and providers of trailers and containers to forecast upcoming demand peaks and reallocate assets accordingly. Data cleansing is a large part of the process, which involves the acquisition of historical data and using AI technologies through algorithms and working with customers to help improve front-end processes, Transmetrics claims.
Digitisation and data analytics are imperative to improving profitability through efficient planning and utilisation of empty containers. The analytics allows for a transparent overview, including monitoring the real cost and highlighting any inefficiencies.
Transmetrics estimates the benefits includes an approximate 15% decrease in the container fleet, 15% decrease in the cost of logistics of empty containers as well as a 15% savings in the container maintenance and repair costs.
An Intel Internet of Things study two years ago estimated freight shipping accounts for 8% – 10% of the GDP worldwide. Intel IoT wants to equip freight with sensors and gateway devices to make it “smart”. This would allow for location and status updates in real time and account for inclement weather, road conditions, traffic, accidents, shipping vehicle malfunctions, and human error. The data derived from such analytics could be crucial to better planning and utilisation of empty containers.