Strategies for minimising empty container runs
This article is authored by Harsh Vardhan Gupta, co-founder, MatchLog Solutions.
In the area of global trade, efficiency and sustainability are more important than ever. One significant challenge the industry faces is the issue of empty container runs—shipping containers that travel back to their origin or other locations without any cargo. These empty journeys result in wasted resources and increased environmental impact. Let us look at some effective strategies to address this problem and the important role of triangulation solutions in optimising container logistics.
Empty container runs are a prevalent issue in global shipping. According to the World Shipping Council, approximately 20% of all container movements globally are empty. This inefficiency not only increases operational costs but also significantly contributes to carbon emissions. For instance, Drewry's shipping consultancy estimates that around 60 million empty containers are moved globally each year, leading to substantial unnecessary fuel consumption and pollution.
Accurate forecasting and demand planning are fundamental in minimising empty container runs. By leveraging advanced data analytics and machine learning, shipping companies can predict demand more accurately and ensure containers are positioned where they are most needed. This proactive approach helps in reducing the frequency of empty backhauls.
Collaboration between shipping companies can also mitigate the problem of empty container runs. Digital platforms that allow companies to share container space and synchronise their logistics can lead to more efficient container use. For example, there are platforms that facilitate the interchange of containers between different shipping lines, reducing the need for empty repositioning.
One innovative approach to tackling empty container runs is triangulation. This strategy involves arranging for containers to pick up a new load from a location near their drop-off point, rather than returning empty to the origin. For instance, if a container delivers goods from China to the United States (US), instead of returning empty, it can be directed to pick up another shipment within the US destined for a different international location. This method significantly cuts down on empty miles and enhances overall efficiency.
According to a report by the Boston Consulting Group, implementing triangulation could reduce empty container movements by up to 15%, translating into significant cost savings and environmental benefits. Companies like Maersk and Hapag-Lloyd are already investing in triangulation solutions to optimise their container logistics.
With the rise of geopolitical tensions and the lessons learned from the pandemic, there is a growing trend towards regionalising supply chains. By producing and sourcing goods closer to the point of consumption, the reliance on long-haul shipping is reduced, thereby minimising the instances of empty container runs. This approach not only enhances supply chain resilience but also contributes to sustainability goals.
The advent of smart containers equipped with IoT (Internet of Things) devices is another game-changer. These containers can provide real-time data on their location, condition, and availability. Such transparency enables more efficient container tracking and repositioning, ensuring that empty containers are quickly identified and rerouted to areas with high demand.
Governments and international bodies also play a crucial role in addressing the issue of empty container runs. Policies that incentivise sustainable practises, such as tax breaks or subsidies for companies that adopt green logistics strategies, can drive industry-wide change. Additionally, stricter regulations on carbon emissions from shipping can push companies to seek more efficient operational methods, including reducing empty container movements.
Minimising empty container runs is not just an operational necessity but a crucial step towards sustainable global trade. Embracing these strategies not only helps in reducing operational costs but also in achieving substantial environmental benefits, paving the way for a greener and more efficient future in global trade. As we continue to innovate and collaborate, the dream of a more sustainable shipping industry becomes increasingly attainable. By tackling the issue of empty container runs head-on, we can steer the global trade sector towards a future where efficiency and sustainability go hand in hand.
This article is authored by Harsh Vardhan Gupta, co-founder, MatchLog Solutions.