Every third container being moved is empty. That’s at least 60 million empty container moves every year. We’ll dig into the reasons for this massive number and look at how you can minimize your empty container repositioning costs.
If you Google “reduce empty container repositioning costs” tons of different options come up – with as many ideas as to how you can reduce your costs. All container owners and companies are different. However, regardless of your company size and goals, we can help you reduce your empty container repositioning costs. And it doesn’t even have to be that difficult. Sounds good, right?
But before we get to that, let’s quickly define what empty container repositioning actually is:
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 trying to figure out how to save money on these costs.
Because who wants to see money running down the drain for every single empty container moved around the globe? I for sure don’t. To add insult to the pain, you don’t just move the containers once. It’s a never-ending circle of moving your empty containers to where you need them. Back and forth. This is also why container interchange, often between carriers, has become a way for many to save money.
I know that many container owners just swallow the empty repositioning costs because it seems too unmanageable to do anything differently. But it doesn’t have to be. What if I told you that there was an easy way to find trustworthy container users, who’d move your containers? If you also wouldn’t have to spend any money moving your container – and could skip lengthy contract negotiations? Now, I might just have piqued your interest.
To believe that it can be that easy, you have to see it for yourself. Try our free search function below. All you have to do is tick the “I want to supply containers” box and fill out where you have containers and want them dropped off. Instantly you’ll get a list of container users, who want to move your boxes. Companies, that have all undergone thorough background checks.
Try our search function here to find partners for free container repositioning 👇
You can also get a sneak peek into how the Indian container line Indus saves money on empty repositioning right here. Now, let’s get back to the problem at hand. Why is empty container repositioning such a big problem in our industry?
Empty container repositioning keeps on growing
Let’s imagine this scenario: You have 200 containers in Hamburg. The boxes must be moved to Asia 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 Asia. When you have to pay for handling charges at terminals and ports, storage and maintenance at warehouses, inland transportation, and seaborn repositioning, it becomes both time-consuming and expensive.
You might have been in a similar situation at some point. And you’re far from the only one.
Empty container repositioning is a widespread problem in the industry. Although, it has gotten worse in recent times because of the rapid growth. As well as the regional differences, where especially European and American ports experience a high surplus of empty containers. At the same time, Asian ports face severe shortages.
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. Here are some of the areas where you might also have experienced difficulties:
It can take several weeks to find a new customer to export cargo for, load the container, and bring it back to the port. All that, to earn profits of approximately $800. That’s why container owners rarely wait for export loads to be available. Instead, they often reposition their empty containers back in Asia. By doing this, container owners can generate a profit of $3000.
Manufacturing and leasing costs
Containers can get accumulated. Especially if the costs of manufacturing new containers or leasing boxes are cheaper than repositioning them. 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 can also go up.
Sales teams contribute to a high number of unused containers. They focus on increasing headhaul volume rather than optimizing container flows. In a highly competitive shipping market and due to demanding customers, the salesforces concentrate on container availability to sell units to the customer.
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.
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 vessel, or inland network link between locations.
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-top or high-cube containers), and container conditions (cargo worthy, food-grade, or newly built units).
No clear visibility on costs
In many cases, 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 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 especially these containers moved?
Empty container repositioning – a global shared equipment pool?
Sharing equipment globally is another 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.
An example of how that works comes right here:
Container xChange is the biggest platform for container interchanges with more than 600 shipping companies. We let container owners, like you, find partners that move their containers from surplus to deficit locations.
But Container xChange does more than help container owners avoid costs of moving empty containers. We also allow you to downsize your equipment pool. You can benefit from that on a number of levels. Such as lower capital expenditures, reduced consumption of resources, and reduced costs for depot storage and terminal space.
How can you avoid empty container repositioning?
We can’t entirely avoid empty repositioning as long as there are trade imbalances.
But what if you could get someone to move your empty containers to the destination? 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 and so on.
To make it even easier, imagine you could sit behind your computer screen and scroll through container users interested in moving your containers for you. All these container users would already be vetted, so you’d know they’re trustworthy. Container users would also be able to reach out to you if they’re interested in your offers. You’d also be able to see peer reviews from former partners – and see who they’ve worked with so far.
If you see a company you like, you can send them a message and negotiate terms like free days and per diem. All based on the standard contract you’ve all filled out beforehand. Making your negotiations smoother and your work faster.
After that, you can lean back in your chair, and stay up-to-date on the whereabouts of your boxes with automated container tracking. All of that in one place – right from your computer screen.
So, we created the online platform at Container xChange that helps you reduce your empty container repositioning costs, find trustworthy partners, and skip the hassle of lengthy contract negotiations, background checks, and endless emails.
Avoid empty repositioning with one-way containers
In other words, using your boxes as one-way containers can help you save money on empty container repositioning.
One-way containers are also known as cabotage containers. The container user leases your container for that one journey, e.g. from Los Angeles U.S. to Shanghai, China. That’s it. You get your container moved for free and they get their cargo moved too.
With our online neutral platform, we make it easy for container owners and users to find trustworthy one-way partners. And you can automatically update your one-way offers on xChange, easing your manual workload. To make it safer and even easier for you, every xChange member goes through a mandatory background check, before they can make deals on the platform. Ensuring that you find trustworthy partners online.
Yet, how do you avoid biting down your nails and frantically running your hand through your hair when the containers are late – and you haven’t heard from the container user?
On Container xChange you can monitor your one-way containers in real-time. You can receive container status updates and tracking alerts – such as ETAs and misuse warnings. That way, you can focus your time on the containers that really need attention.
Money saved is money earned
So, skip the teeth-pulling wait and brow knitting money waste on empty container repositioning, and use your empty boxes as one-way containers. And there’s money to be saved when you avoid moving your empty containers. These savings are around $200-400 per container.
Want to see how easy it can be on xChange? Click on the banner below, and our team will give you a tour of the platform.