How to Reduce Empty Container Repositioning Costs?
With billions of shipping containers moving around the world, carrying tons of cargo, they constitute major parts of the global supply chain. The shipping containers are not always laden with cargo, they have to travel empty many times. And this empty travel is the cause of worry for many due to the extra burden of money involved in empty container shipping. This problem made the shippers and the mariners think about the ways in which they can reduce the empty container repositioning costs as millions can be saved by sorting this situation. There are many shipping container companies that provide and show you the ways in which such immense wastage of money and time can be avoided.
But before thinking of reducing it, let’s see, “What is empty container repositioning?”
Empty container repositioning means moving the shipping units to undersupply area from the areas that have the shipping units in excess. When it is moved in such a way the cost of movement burns a hole in the shipper’s pocket. Every year movement of empty shipping containers is making the shippers see huge losses and is affecting the global supply chain monumentally.
There are many causes that insinuate this condition. We will elaborate one by one below.
Major causes of Empty Container Repositioning
Imbalance in Trade
One of the major causes of empty container repositioning is due to trade imbalance that happens when a place or port exports more or imports more. When the port sees more imports of boxes then it will collect lots of empty shipping boxes but when the place sees more exports of shipping units then it will go through container scarcity. In this way, a huge imbalance is created and extra positioning cost is surcharged.
The new customer who is ready to export the merchandise so that the shipping boxes can reach back to the origin port is not easy to find and takes more than weeks sometimes. And all this hard work saves less amount of money whereas when the shippers position the empty box back then they can generate a wholesome profit.
Depending on Speculations
The shippers who depend on pre-speculations gets hit by such condition. As believing the forecasts about the weather, congestion on ports, strikes, etc. mostly lands the shippers in the soup due to their changing nature. These all situations may or may not happen but incurring of extra cost tend to happen due to this habit. By believing the predictions the shippers tend to get the shipping units on stock and later on have to deal with empty positioning situation.
Poor Visibility on Costs
It has been observed that where the logistics team sees the management of empty container positioning worldwide, the procurement team manages the vendor-based level costs. Due to this, the container management systems are unaware of the questions like how many shipping units have been moved and why? This happens as the overall costs are managed by carriers and the reasons for such costs are unknown.
After knowing about the causes let’s move to know, “How to avoid empty positioning of containers?”
Though avoiding empty positioning totally may not be possible but there are ways by using which the problem can be mitigated.
Leasing or Selling Empty Containers
By selling or putting the empty shipping box on the lease, the shipper may avoid the empty movement of the boxes. Though it may take some time and patience, such problem can be avoided and free port from congestion. Storing empty boxes on container depot leads to port congestion as the patterns have been seen in many busiest seaports of the world.
By taking Containers on One Way Leasing Service
When the shipper gets the One Way Lease containers, they can avoid the empty positioning as they are not answerable to the re-positioning of boxes after their use is over. In One Way Lease, the shipping unit is taken for one way journey only not for return trips. So the shippers can avoid the situation and remain stress-free.
In case of platform or flat rack containers
Empty positioning cost can be avoided in case of flat rack or platform containers as they can be stacked on one another taking very less space so they can easily be transported back without a hassle and the problem can be tackled by shippers easily.
By using SOC Containers
Yes, you read it right. When the shipper owns the shipping unit they manage every detail in advance and always keep check on returning of a shipping unit. They manage every detail beforehand like the setting of and return details. Thus when their boxes return, they return with cargo just like they were sent off for export.
By using the above strategies, the shipper may avoid empty container repositioning costs and save a massive amount of money. No one can bear the thought of sending their money to waste by moving empty boxes. And if it is the case for one time, the extra expense can be endured but when you have to ship the boxes continuously year after year to far-off places then you have to find ways to avoid such costs.
LOTUS Containers, one of the eminent shipping container suppliers help you mitigate the empty positioning of boxes with spot-on container solutions. We have abundant boxes of diverse container types to solve the container problems and with our more than perfect One Way lease solution, we help you avoid the looming challenge. With our sophisticated SOC containers, you don’t only avoid the empty repositioning but also avoid unwanted demurrage and detention charges.