Introduction to the reason why shipping containers are only used once
When repositioning a container, you have to consider cost and durability. You may also have to deal with labor shortages and the economy. But there are several other reasons for this decision.
Read on to learn more about the different benefits of this type of container. Among these are the economy and labor shortages.
These factors make shipping containers a great choice for repositioning. And they may just change your life!
Costs of repositioning
The shipping industry is plagued with enormous inefficiencies, and one of these is the process of repositioning empty shipping containers.
More than one out of every three shipping containers is unoccupied, and empty container repositioning costs the industry $20 billion annually.
Inefficient repositioning processes affect carriers of all sizes and can account for as much as 27% of their total container handling costs.
Insufficient fleet capacity, a lack of reliability in commercial forecasts, and long transit times all contribute to the high cost of repositioning empty containers.
According to the Boston Consulting Group‘s study, the industry’s problem with empty containers is so widespread that it accounts for between five and twenty percent of operating costs.
It affects companies across the globe, including carriers, leasing companies, and other logistics service providers.
While the costs of repositioning are high, they could be eliminated entirely if carriers offered a marketplace where they could sublease empty containers to other companies.
The costs of repositioning empty containers are considerable, and a significant amount of time and energy is spent relocating them.
Additionally, carriers are reluctant to reposition containers when there are no suitable outbound loads available.
These factors, coupled with tight freight markets, can make repositioning costs prohibitive for some shippers. Moreover, empty containers represent development opportunities for export markets.
Every disequilibrium in the global supply and demand reflects in the costs of transporting goods. In some cases, the cost of repositioning an empty container is so high that it wipes out the profit of the firm that transports it.
Repositioning of empty containers has been estimated to represent five to eight percent of the operating costs of shipping lines.
This is not even considering the maintenance and storage of empty containers, which contribute to the overall cost of empty logistics.
By the way, most carriers fail to properly forecast their needs for positioning, and the added costs of repositioning are not reflected in their operating costs. A large part of the problem is that carriers do not have accurate forecasts of future loadings.
When shipping valuable cargo over long distances, the durability of shipping containers is crucial. These sturdy structures are designed to withstand a variety of weather conditions and the extreme stress of heavy loads.
Nevertheless, there are some things you should keep in mind. If you want to maximize the lifespan of your shipping container, it is important to consider the following factors.
This article will discuss how shipping containers can help your business. It may be helpful to learn how shipping containers are constructed and what factors should be considered before purchasing one.
Rust. Rust is a major cause of shortening the lifespan of a container. This corrosion is made worse by moisture and seawater. The container’s lifetime can be shortened by exposure to wet environments and high-water exposure.
For these reasons, it is vital to keep moisture and saltwater away from shipping containers. Also, proper maintenance is necessary for these structures to remain in good condition and to provide optimum performance.
Durability. While shipping containers can be used to transport a variety of different products, their lifespan varies based on their use. In general, shipping containers can last from 10 to 25 years with proper care.
Nonetheless, if they are used for the same purpose for a long time, their lifespan can be extended to 50 years. This makes shipping containers an excellent alternative for housing or extra space in schools and construction sites.
They are also durable and affordable.
The construction of shipping containers is based on standardized dimensions. Despite their standardized sizes, shipping containers cannot be stacked higher than eight high.
The containers are designed to fit together and lock on four corner posts that support the weight of those above them. The shipping containers are generally delivered by truck, although some are loaded in shipyards using railcars.
It is recommended to place these containers in the best location possible to avoid damage.
The shipping container industry is experiencing a crisis, with oversupply and underpaid workers threatening the global supply chain.
While container shipping companies are reaping record profits, the shortage of labor is destabilizing the industry’s global supply chain.
As a result, many companies are offering bonuses and higher pay to attract more workers. This, in turn, is driving up the price of shipping containers, a crucial component of global trade.
The current shortage of workers has resulted in congested ports. This means that there aren’t enough laborers to fill all of the cargo ships arriving.
In recent months, the Port of Los Angeles, for example, has been experiencing major port congestion. Cargo ships en route from Asia dropped off hundreds of thousands of containers in ports across the Americas.
Without workers to unload the containers, companies could not load new products. As a result, thousands of empty containers are stacked up in ports, putting pressure on container prices.
The global economy is recovering, but the shortage of containers is a direct result of the pandemic. The cost of transporting goods from Asia to the West Coast has increased by 145 percent.
Meanwhile, sickness among longshoremen has exacerbated the situation. But the latest figures show that the COVID-19 cases are on the decline, which is encouraging news.
Experts do not know when the container shortage will end, but they say businesses should prepare for an uneven supply chain.
In March, a grounded container ship blocked the Suez Canal. Then, another container ship blocked a key port in southern China. This caused 350,000 empty containers to sit idle while operators waited twice as long to return them.
As a result, many cargo companies began storing their goods in shipping containers instead of leasing storage space. This is a more cost-effective solution than renting storage space. However, shipping companies should keep in mind that they’re unable to ship more goods due to a shortage of workers.
One way to alleviate the container shortage is to consider new business opportunities overseas. Companies with global distribution networks may be able to take advantage of opportunities that arise in other countries.
Those with established shipping relationships may also do well in navigating the container shortage. Ample lead time for orders and a higher budget for containers can help companies navigate the current chaos.
So, the best strategy for avoiding this situation is to prepare yourself. And remember to be prepared for ongoing disruptions.
While there are about 17 million shipping containers in the world, only six million are used for practical purposes. Containers are made from high-grade steel, which is wind and water-tight and durable.
Because of their durability, they are suitable for repeated use, but they are also expensive, and the system has become inflexible, which has pushed shipping prices to absurdly high levels.
For example, in the United States, a single 40-foot container can cost $2,500 to ship to California. But it will cost about $5,500 to send that container to Asia.
Before shipping containers were widely used, most goods moving in them were manufactured in one country and exported to another. But as cost-cutting measures became more common, manufacturers were able to spread their suppliers across the globe and did each part of the manufacturing process where it was most efficient.
By the late 1980s, manufacturers and retailers began building supply chains, involving several shipments and ending with a final shipment to the end-user.
When container ships are used only once, they often end up sitting in a warehouse, rusting and leaking. The resulting mess can contaminate other goods.
Because of this, shipping lines have been forced to invest $100 million in expedited ocean freight and air shipping. However, air-freight is eight times more expensive than sea shipment, and most cargo is carried in the cargo holds of passenger aircraft.
The economy of shipping containers only being used once is not entirely a myth. Studies have shown that when containers are reused, their use can be significantly higher. People often purchase reused containers in Kentucky, Nevada, and Wyoming.
In September and November, shipment volumes of exercise equipment and kitchen equipment doubled, while shipments of disinfectants rose almost six-fold.
In the same period, the number of containers used to ship disinfectants and kitchen appliances also increased by 68%. And that is not all.
Container ships have become bigger, with the largest vessels able to carry 24,000 20-foot containers. The size of a container ship is roughly equivalent to that of a 44-mile freight train.
A Globe ship with 19,100 20-foot containers could transport 156 million pairs of shoes, 300 million tablet computers, and 900 million cans of baked beans.
Even though the Ever Given has a capacity of 20,000 containers, it only had 18,300 containers when it got stuck in the Suez Canal.