Improve container utilization for 40' / 20'

Shipping air inside expensive freight containers has never been a cost-effective approach to transportation. Today though, in the wake of the COVID-19 pandemic, it is even more critical to try and improve capacity utilization, given the skyrocketing costs of container freight shipping.

Is Container Underutilization That Much of a Problem?

?. To put the issue into perspective, a study into container loads imported into the United States in 2018 found that utilized capacity was just 65%. In other words, containers were, on average, only just over half full.

Add to that the fact that container shipping costs on some trade lanes have tripled during 2020/21, and it is not hard to see why improving utilization should be a primary concern for any supply chain manager with responsibility for ocean freight shipping.

?Raising Container Utilization: The Size of the Prize

?It is one thing to know that a 65% container utilization rate is not good enough, but quite another to find the motivation to do something about it. As already mentioned, many companies have historically accepted that much of their shipping-container space is unfilled, so perhaps seeing the volume of wasted space quantified will do little to shake that sense of resignation.

It is not realistic to expect that your company can fill containers to the 100% mark, but then, you will not need to go that far to achieve substantial savings through utilization improvement.

Do you annually ship containers numbering in the hundreds, or even in the thousands? If so, an increase of around 20% capacity utilization, from 65% to 85 or 90%, will dramatically reduce the number of shipments, returning millions of dollars in saved freight fees.

?Increasing Container Utilization: How to Do It

Once aware of the potential cost savings to be had from utilizing shipping-container space more effectively, the obvious question that follows is, “how do we do it?” So now, let us get to the options you can explore and test for viability.

You can approach the problem from several angles. For example, you can look at:

? Your products and the way you package them for shipping.

? The size and types of shipping container you use.

? The manufacturing, ordering, and transportation processes for your goods.

? The configuration of your container loads.

?To help you gather some ideas, we will take a quick look now at each of the points 1 to 4 above, and how in each case, you might find it possible to improve the use of your container space.

?Products and Packaging

Packaging can play an influential role in the utilization of container capacity, and in many cases, that influence is negative, because containerization is often omitted from packaging design considerations.

Carton dimensions can make a critical difference between the ability to double stack pallets in a shipping container and the limitation of single stacking, which will leave a substantial amount of wasted space in the upper area of a container.

Do your container loads typically comprise single-stacked pallets? If yes, could you reduce the height of your cartons (if your products are packaged in cartons) so pallets can be double stacked and hence, occupy the upper space, as well as the floor space, of your containers?

Can packaging dimensions be altered in other ways to enable shipping containers to accommodate more of your products? These are the types of questions to ask and answer when evaluating packaging options for improved container utilization.

?For instance, does your company always opt for 40-foot standard containers, and if so, do you often find that you can’t quite get your pallets double stacked?

?The high cube has greater capacity and is taller, which might enable you to double stack your pallets to fill all the container space.

Better still, the cost for shipping a high-cube container is often not much higher than that of a standard 40-foot unit. Similarly, there may be times when it is more cost-effective to hire 20-foot containers and fill them rather than shipping partially filled 40-foot boxes.

There’s No Profit in Shipping Air

It is not called full-container-load shipping (FCL) for nothing. When you use this transportation mode, you are paying for the use of the container, and the price is the same no matter how much of the internal space you use.

Increased utilization will reduce the shipping cost per unit for your products and reduce the number of shipments you need annually. Together that makes for significant savings, especially right now while freight rates are reaching ever greater heights. Top priority 40HC, 40',40Ref and 20".

#supplychain #containerutilization

If you need help with your supply chain please contact Claude Zabaleta mobile: +52-81-3407-8811