Articles
Can containers cut shipping costs even more?
By Sebatian Mendoza, CC&S - May 25, 2008
“The recent industry White Paper ‘Profit Optimization for Container Carriers’, published by the ROI Container Cargo Alliance, found that only 20% of a container's time is spent at sea, while the other 56% it is unproductive. Given the endemic imbalances in the east-west trade lanes, shipping empties around the world is unavoidable. However, while these imbalances are outside the carriers' control, more efficient container management is said not to be". Boilé M.P., Empty Intermodal Container Management Report (NJDOT Project, CAIT).
Thanks to the invention of Malcom McLean, containerization has been able to reduce shipping costs for shippers since cargo is now shipped into these metal boxes providing a faster and more secure package for goods transportation. However, the costs of maintenance, repairing, and empty position of containers are left to container shipping lines. In 2008, the container fleet will pass the 20 million teus line, so keeping containers over half of their lifetime in an unproductive status will dramatically affect carriers' bottom line profitability as well as the capacity to serve carriers' cargoes by ports and depots.
However, the answer is given by the only one standardized weapon of shipping industry: the standard container.
Standardization, which makes containers suitable to any shipping line, allows carriers to share containers and vessel spaces while moving their empty containers around the world to meet cargo. There is a huge opportunity to reduce empty container movement costs if carriers maximize the use of connectivity by taking advantages of the total shipping transportation capacity.
How are empty containers movement costs reduced? Is it possible to maintain communication in real-time when planning to position empty containers when each carrier handles their own map to move empty containers? High performance information technology (IT) goes a long way to make this collaboration a success. Mv-Fleet™ (My Virtual Fleet) is a secure web-based application that promotes such communication by facilitating collaboration while maximizing industry resources, creating the possibility to compete through sharing resources, just as it works for the airline industry. It will become the next standardization step to be followed by the container industry.
