Savings Through Container Transport Planning

containerThe use of standardized steel shipping containers, or intermodal containers, started late in the 1940s as commercial shipping operators started employing them for ocean carrier, truck, and rail transport. It wasn’t until 2005 when the International Maritime Office (IMO) established industry standards for more consistent loading, transporting, and unloading of goods in ports throughout the world, saving time and resources.

Regular, dry freight containers typically cost between $1750 and $2000 and are owned by either the shipping lines themselves or by a large number of operational and financial leasing companies. These are the costs of standard containers, but the sophisticated containers like reefers and tanks are costlier. For this reason, carriers want to have complete visibility into their container (and other equipment) status at all times.

Managing the flow of containers—empty or full—isn’t just a concern for ocean carriers. Visibility across the end-to-end supply chain can save money and headaches. However, the benefits are measurable. Utilizing container tracking tools as part of a holistic transportation management system (TMS) reduces operational costs by increasing asset visibility. Container tracking has become instrumental in providing real-time information on assets to prevent theft and loss of containers

From Cost to Revenue Center

An essential feature of the shipping container is that it is intermodal—goods packed in a container can travel on several different types of transport without being unpacked. This process equates to cost and efficiency savings, along with reductions in environmental impact and improved margins.

With the advancement in logistics technology, most companies always know the exact location of their cargo and can further notify their customers. But retrieving the container isn’t as straightforward. To maintain high levels of efficiency and cost savings, on-the-move containers should always be full. Once a load is delivered, the container should move to a new pick-up location (or locations) before returning to the port. This isn’t always possible for many reasons, but primarily, because load information needs to be made available to the transport community in close proximity that can move the empty containers and fill them up along the way to the port. Thus, reducing the expense of converting empty hauls into revenue-generating moves for trucking companies and carriers.

Ideally, containers should never sit empty; it should be considered a piece of equipment that must be used at all times. To do that, once a container is unloaded, logistics planners need to have an outbound load identified near the drop-off point. Repositioning begins immediately after a container has been unloaded to keep the cost of a non-operating container down. Yet, estimates show that at least 2.5 million containers are stored empty during any given time.

By leveraging technology, logistics teams can minimize the cost, effort and resources involved in container positioning. A container management platform facilitates tracking of containers that are ready to return to the port via message updates to trucking companies and logistics teams, providing a single view into their location and status. This application provides an efficient tracking system that becomes a revenue driver, not a cost center. Ocean carriers post empty container moves that are needed between depots at a set price and leverage the trucker network to balance container yard inventory. Truckers can also now benefit by accepting jobs to move containers that are posted by ocean carriers outside of contracted tendering. The overall results are lower demurrage, detention and lost container charges.

The Amazon of Container Management

Similar to the mammoth global e-commerce platform Amazon, supply chain management solution providers are now offering to connect the various commercial needs of the ocean carriers, shippers and trucking companies in the form of a virtual container yard. The online platform provides information about container availability at any location and when it is available to pick-up to retrieve a new load. The marketplace can be accessed by trucking companies for a fee, offering them a profit to pick-up the empty and return it to the carrier. Planners can then plot out other shippers with goods to move from the route along the way back to the port, or in close proximity.

The platform becomes a “clearinghouse” where detailed information is made available to satisfy the carrier’s need and line the pockets of trucking companies. During these times of escalating transportation costs, supply chain managers gain more insight into the container side of the operation and yield greater efficiencies to solve the empty container problem and trade imbalances.

Challenges Continue

Supply chains, and logistics, in particular, are going through challenging times considering the fluctuating volumes, rising technology costs and industry concerns like labor and regulations. However, we see shippers managed to adapt to this quickly changing transportation landscape through innovation, increased technology adoption and improved customer service. An end-to-end supply chain management solution, with all the capabilities of a robust TMS, is the best defense in a demanding environment.

Gary Barraco, Senior Director of Global Product Marketing, is responsible for developing strategic product marketing direction and presenting the E2open brand and solutions worldwide. As the platform evangelist, Gary develops and launches customer insights, go-to-market plans, product messaging and content, and field marketing tactics which establish E2open’s solutions as a standard in the Global Trade Management space.  Previously, Gary was VP, Industry Development for ecVision for 9 years prior to its acquisition by Amber Road. He has 20 years of active military service where his primary specialty was providing marketing support to Army National Guard recruiting and retention operations in New Jersey. Gary received a BS from the State University of New York and is currently pursuing a Master’s degree at Moravian College.

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