Empty container repositioning costs your company tons of money and is a major challenge in the container logistics industry. If you want to be a part of the solution to help curb this problem and save money, then read this blog to know the reasons behind this phenomenon and how you can minimize your repositioning costs with Container xChange.
Every third container being moved is empty. That’s at least 60 million empty container moves every year. To break the numbers down even further, there are 170 million containers being moved around the world via different methods of freight transport, and of that number, an additional 50 million boxes are empty. You don’t want to add to these numbers, right? And you don’t have to. Because we have a way in which you can connect to container users who’d move your containers for free without the hassle of lengthy contract negotiations. At Container xChange, you can connect with 1,500+ vetted logistics companies around the world.
We are a neutral leasing and trading platform that offer a range of services that can help with empty container repositioning, including container tracking, container interchanges, and one-way leasing contracts with vetted members.
If you want to see this for yourself then try our public search below to find partners for free container repositioning! All you have to do is choose “I want to supply containers” and fill out where you have containers and want them dropped off. You’ll get a list of vetted container users in your desired locations who are ready to use your boxes almost instantly. Check it out for yourself right now!
What is empty container repositioning?
Empty container repositioning refers to moving empty containers from an area with a surplus of containers to a location with a deficit. For container owners, empty container repositioning has a substantial economic downside. Every year, moving empty containers costs the industry more than $20bn. That’s more than 12% of operating costs for shipping lines. And that’s probably the reason you’re here trying to figure out how to save money on these costs.
Let’s imagine this scenario: You have 200 containers in Hamburg. The boxes must be moved to, let’s say Shanghai, to carry export cargo. None of your northern European customers need these boxes for exports though. That leaves you with having to move your empty containers from Hamburg to Shanghai. It becomes both time-consuming and very expensive when you have to pay for handling charges at terminals and ports. Storage and maintenance at warehouses, as well as inland transportation, and seabourn repositioning, are also costly.
You might have been in a similar situation at some point. And you’re far from being the only one.
Empty container repositioning is a widespread and real problem in the shipping industry. And it seems to have gotten worse in recent times because of the rapid growth and regional differences. European and American ports experience a high surplus of empty containers. And at the same time, Asian ports face severe shortages.
What causes empty container repositioning?
There are 4 main factors that contribute to empty container repositioning:
- Trade imbalances
- Structural imbalances
- Time-specific imbalances
- Company specific imbalances
Apart from these, there are various other problematic factors that cause empty container repositioning which we’re going to explore in detail below.
Trade imbalances and inefficiencies
Around 2/3 of all empty container moves come from trade imbalances between regions. The remaining 1/3 of these repositioning costs are related to carrier-specific inefficiencies that can be difficult to overcome.
It takes several weeks to find a new customer to export cargo, load the container, and bring it back to the port. All that to earn profits of approximately US$800. That’s why container owners rarely wait for export loads to be available. Instead, they often reposition their empty containers back in the Asian region. By doing this, container owners can generate a profit of US$3000.
Manufacturing and leasing costs
If the costs of manufacturing new containers or leasing boxes are cheaper than repositioning them, the containers can accumulate. Sometimes, it’s even cheaper to sell containers in surplus locations and buy new units in Asia. So, when it costs more to manufacture or lease containers, the amount of empty container repositioning also goes up.
Specific customer demand
Sizes and types of available empty shipping containers don’t always match what the customers are looking for. Maybe they need different container types (reefers, open-tops, or high-cube containers), and container conditions (cargo-worthy, food-grade, or newly built units).
No clear visibility on costs
Usually, the logistics team manages empty container repositioning globally. A procurement team controls costs on a vendor-based level. That can lead to situations where carriers know the total costs, but the drivers behind these costs remain unclear. Their fleet management systems don’t answer questions such as how many containers were moved, or why were these containers moved.
A row of issues within a shipping line’s network can cause empty container moves and high storage fees. Such issues can be a delay — the absence of direct vessels, or an inland network link between locations.
Often, container owners over-forecast demand. Their analysis often relies strongly on agents and gut feeling. And it’s not exactly easy to include port congestion, labor strikes, or the weather. The same goes for changes in seasonal and trade demands. Low accuracy of economic forecasts means that these forecasts are less helpful when container companies plan their container stock. This also leads to unnecessarily high head-haul volume.
Forecasting can be difficult as it relies on possible predictions. How will you truly know the best time, prices, and routes to reposition these empty containers?
Well, we constantly study the market and identify the most liquid locations to reposition both empties as well as different types of containers. We also report on congestion at the global ports, workers’ strikes, new shipping routes, and overcapacity/shortage of containers.
For a roundup of regions that have the best profit options; to know how to reposition containers; and to read our forecasts for the months ahead, you can download your free copy of our global logistics report, Where Are All the Containers below.
Sales teams contribute to a high number of unused containers. They focus on increasing head haul volume rather than optimizing container flows. In a highly competitive shipping market and due to demanding customers, the sales forces concentrate on container availability to sell units to the customer.
How can you avoid empty container repositioning?
With all these causes in place, let’s now focus on finding the solution. One good solution is sharing equipment. Globally, this is a popular way of avoiding empty container repositioning. Hinterland triangulation sends import containers directly to export customers of the same company. At the same time, container interchanges reduce the number of empty containers through partnerships with other carriers.
Container xChange is the biggest platform for container interchanges with more than 1,500+ shipping companies. We let container owners, like you, find partners that move their containers from surplus to deficit locations. We also allow you to downsize your equipment pool.
You can benefit from that on a number of levels:
|Lower capital expenditures
|Capital expenditures refers to the money used to maintain fixed assets. The lower the CapEx, the better it is for you.
|Reduced consumption of resources
|Reducing consumption of resources increases sustainability.
|Reduced costs for depot storage and terminal space.
|Less costs for storage means you get more for less. Storage space for lower charges.
So, our online platform, Container xChange helps you:
- Reduce your empty container repositioning costs
- Find trustworthy partners
- Skip the hassle of lengthy contract negotiations, background checks, and endless emails
Avoid empty repositioning charges with one-way containers on Container xChange
As much as container interchange can aid you with empty container repositioning, it can’t entirely help avoid this problem, especially when the global market is facing trade imbalances.
But what if you could get someone to move your empty containers to the destination to help stabilize the trade imbalance?
You wouldn’t have to pay to move the containers and you’d be free of the administrative hassle of figuring out slots on the vessel, trucking, etc.
This is possible by using your boxes as one-way containers to help you save money on empty container repositioning. One-way containers are also known as cabotage containers. The container user leases your container for one-way journey, e.g., from Russia to Europe. You get your container moved for free and they get their cargo moved too.
On xChange, we offer one-way moves to eliminate container imbalances thus, curbing empty container repositioning.
So, head over to our leasing marketplace and scroll through container users interested in moving your boxes for you. You’ll be able to see peer reviews from former partners – and see who they’ve worked with so far. When you find a company, you like you can send them a message and negotiate terms such as free days and per diems. These will all be based on the standard contract you’ve filled out beforehand (BIMCO contract). Making your negotiations smoother and your work faster.
Click on the banner below, and let our expert team help you find a container owner for your one-way move right away!
Levels of empty container repositioning
Till now we covered the causes and the ways in which you can avoid empty container repositioning. But before we lead you to the end of the blog, here’s some add-on information about the levels of empty container repositioning.
Save money on empty container repositioning costs with Container xChange
With all your knowledge secured on how to tackle empty container repositioning it’s time you do your part in eliminating this issue and save your company from hefty repositioning charges. Container xChange is alongside you on this journey by providing you with one-way leasing options, and container interchange agreements with 1,500+ vetted members.
And a bonus is also our real-time tracking through which you can monitor your box and effectively plan your container movements. This ensures that containers are in the locations where they need to be and that all your operations flow smoothly.
You know that many container owners swallow the empty repositioning costs because it seems too unmanageable, at times, to do anything differently, but it doesn’t have to be that way. Through Container xChange, container owners like you can make their boxes available for one-way leasing. This helps users lease containers and when they move the boxes, they pay the rent to you (the owner) and save you from paying the freight rate.
In some cases, owners let users lease the containers for free to support empty repositioning, making it an attractive deal for users on our platform. And a bonus point of one-way leasing is it also helps in curbing unnecessary shipping emissions.
Empty container repositioning: Common FAQs
What is empty container repositioning?
Empty container repositioning refers to moving empty containers from an area with a surplus of containers to a location with a deficit.
How do you reduce empty container repositioning costs?
Sharing equipment globally is a popular way of avoiding empty container repositioning. Hinterland triangulation sends import containers directly to export customers of the same company.
What causes empty container repositioning?
Empty container repositioning can be caused by a number of things, some of them being trade imbalance, structural imbalance, time specific and company specific imbalances.