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Container Trade Watch

Improving container fleet management – Published January 2012

It is estimated that some US$50 billion is spent annually by the container shipping lines on the landside transport of containers, an aspect of fleet management over which they often have relatively little direct control. It is therefore an area of their operations where they can benefit significantly from the increasingly sophisticated web-based container management programmes offered by third-party logistics software providers.

One of the leading companies in this field, US-based International Asset Systems (IAS), does not own or operate containers itself but provides software-as-a-service (SaaS) solutions to a range of transport operators including CCNI, DHL, Hamburg Süd, Kuehne+Nagel, Marfret, NYK, UASC and Zim Line and equipment lessors Gold Container, Seaco and Triton Container. IAS aims to cut costs for these companies by bringing them improved visibility, control and optimization in both their landside operations and their container repositioning programmes.

To provide some context for the role of IAS the graph below compares the rate at which container trade and the container fleet has grown since 2000. During this time loaded container moves have grown more rapidly than the container fleet, partly because of the growth in short-sea trades which result in more loaded moves per TEU per year, but partly also because of the improving efficiency of container-fleet management made possible by companies like IAS.

To those not closely involved in container operations the significance of products like IAS’s DispatchManager, EquipmentRepair, InterChange, SlotXchange and InterBox is not always immediately clear. In simplified terms they provide not just the software but also connectivity between the wide range of transport operators and service companies (shipping lines, forwarders, road hauliers, storage depots and others) which is required if the physical management of containers is to be improved.

IAS provides an illustration of the cost impact it can make with a specific example on the transpacific. It calculates that on a loaded 40ft container move from Asia to inland North America use of its systems would reduce associated landside costs by an average of US$400-600. Given current conditions on the transpacific it is not certain that even this level of cost reduction would cover the gap between what the lines are earning in freight charges and what they are incurring in operating costs, but it would clearly give lines accessing these savings a considerable advantage over those which are not.

In addition to bringing cost savings to the normal operation of containers, IAS systems could also be used to support equipment recovery in the event of a default. Containers distributed over a wide range of inland locations can be the most difficult to trace, and a system focused on this aspect of container logistics would be of value to owners trying to recover their equipment.