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container interchange the 6R Model Approach
The document discusses container inventory management and collaboration among carriers through container interchange. It introduces the concept of a 6R model for container interchange that considers the right type, size, quality, quantity, location and time for containers. A case study in Sri Lanka found that container interchange could minimize imbalance and reduce repositioning costs by up to 92%. The relationships between variables in the 6R model were analyzed. The document concludes container interchange is feasible and beneficial, and recommends introducing the 6R model approach to the industry.
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container interchange the 6R Model Approach
- 1. Container Interchange: the6 R Model Approach Lalith Edirisinghe CINEC Maritime Campus , Sri Lanka Jin Zhihong Dalian Maritime University, China A. W. Wijeratne Sabaragamuwa University, Sri Lanka 1 Presented by Lalith Edirisinghe 2018.04.10 4/8/2018 GOL International Conference 2018, Le Harve 1
- 2. • Introduction tocontainer inventory management • Collaboration among carriers and container interchange • Conceptualizing the research • Results, analysis, and discussions • Introducing the 6 R Model • Way forward……….. Discussion topics
- 3. Container re-positioning costworldwide accounts for USD 20 billion annually 4/8/2018 GOL International Conference 2018, Le Harve 3 • Container inventory imbalance is the root cause • This cost may be reduced by 15-20 % through container interchange ©
- 4. Sea Container SupplyChain Laden Imports On-hired/Leasing Empty Imports Supply Sources Key Contributors Warehouses & Distribution Centers Customers CFS Lift-On/Off Port Stevedoring Repairs & Washing Port Demurrage/rent CFS Rent Importer Exporter 4
- 5. Container Inventory Management •However, equality in number of containers is not sufficient • Right type and ‘right size’ of containers • Containers at Right place at the right time • Right quality of containers in the right quantity A balanced inventory means, Exporters’ demand = Laden containers imported
- 6. Collaboration among carriersand container interchange Multiple carriers pool themselves and , 1. Share the information of present and future empty container stocks 2. Offer the excess containers to those who are deficit 3. Borrow containers from others who are excess when in shortage 4/8/2018GOL International Conference 2018, Le Harve 6
- 7. Is this feasible? •Slots and containers are complementary service components in shipping • If the “slots” can be shared between alliance partners why not “containers” ? • Slots-Intangible >> tangible • Containers < tangible> • Will carriers be interested………. 4/8/2018 GOL International Conference 2018, Le Harve 7
- 8. 4/8/2018 GOL InternationalConference 2018, Le Harve 8 Likewise many Alliance agreements………
- 9. Alliance agreements provideprovisions for equipment interchange -Transpacific Trade for 2006 through 2010 4/8/2018 GOL International Conference 2018, Le Harve 9 Carrier World ranking* TEU* Share* Name of Alliance Agreement/s NYK 12 501,856 2.7% The Grand Alliance II OOCL 11 506,179 2.8% The Grand Alliance II HL 6 746,057 4.1% The Grand Alliance II APL/HLAG Space Charter Agreement APL 10 581,422 3.2% APL/HLAG Space Charter Agreement KLine 17 359,865 2.0% COSCO/KL/YMUK/ HANJIN/Senator Worldwide Slot Allocation & Sailing Agreement YangMing 14 419,625 2.3% Hanjin 8 591,946 3.2% Cosco 5 799,851 4.3% HYMM 15 384,924 2.1% HMM/MOL Space Charter Agreement MOL 9 583,066 3.2% CMA CGM 3 1,586,134 8.6% CMA CGM/Maruba Cross Space Charter, Sailing And Cooperative Working Agreement CMA CGM/CSCL Cross Space Charter, Sailing And CWA-Central China/US West Coast, Yang Tse/ Maruba NA NA NA CMA CGM/Maruba Cross Space Charter, Sailing And Cooperative Working Agreement China Shipping 7 658,702 3.6% CMA CGM/Maruba Cross Space Charter, Sailing And Cooperative Working Agreement CMA CGM/CSCL Cross Space Charter, Sailing And CWA-Central China/US West Coast, Yang Tse/ Total 42.10% *World ranking, Vessel Capacity in TEUs, and share as per 18 July 2014 Source: (alphaliner.com, 2014)
- 10. A Case studyin Sri Lanka 4/8/2018 GOL International Conference 2018, Le Harve 10 Container Type& Size Imbalance when Work alone Imbalance when Collaborate reduction of empty reposition Savings from VCP USD Saving as % of reposition cost 20'GP 158221 156285 1936 672,953.60 1.22 40'GP 10486 794 9692 5,506,025.20 92.43 40'HC 44586 27842 16744 9,512,266.40 37.55 45'HC 2155 101 2054 1,166,877.40 95.31 20'&40'RF 5975 4791 1184 672,630.40 19.82 Total 221423 189813 31610 17,530,753.00 19.29 1. Interchange is feasible 2. But some features of containers will have barriers
- 11. Approach to theSolution • Awareness in the shipping community about VCP • Regulate the Container Inventory Management (CIM) • Introduce tools and change the container controllers’ psychology (reactive>>>proactive) • Propose local authorities to measure CIM competence of carriers • Propose international forums to link CIM competence with country index (LPI, GCI, Doing business) 4/8/2018 GOL International Conference 2018, Le Harve 11
- 12. Conceptualizing the study 4/8/2018GOL International Conference 2018, Le Harve 12 Type GP HC FT FR FB OT RF Size 20' 40' 45' Quality Quantity Location Time Exporters’ demand Carriers’ ability to supply Imbalance
- 13.
- 14. Six independent variables and “Exchange”R Square value is 0.623 The overall effect of all variables in ANOVA is statistically significant at P < 0.05.
- 15. The relationships amongthe independent variables 4/8/2018 GOL International Conference 2018, Le Harve 15 Variables Estimate S.E. T Statistic P Quantity Location 0.823 0.158 5.222 0.000 Quantity Type 0.365 0.145 2.522 0.012 Quantity Quality 0.594 0.100 5.942 0.000 Quality Location -0.053 0.044 -1.220 0.223 Size Time 0.482 0.073 6.642 0.000 Size Quality -0.257 0.049 -5.214 0.000 Size Quantity -0.064 0.160 -.402 0.688 Size Type 0.609 0.081 7.515 0.000 Size Location 0.950 0.095 9.984 0.000 Type Quality -0.008 0.042 -.198 0.843 Type Location 0.584 0.076 7.669 0.000 Time Location 0.537 0.070 7.661 0.000 Time Type 0.389 0.064 6.086 0.000 Time Quantity 0.695 0.138 5.018 0.000 Time Quality 0.139 0.039 3.527 0.000
- 16. Conclusions • Container InventoryImbalance could be minimized through collaboration among carriers. • The collaboration comes into effect in the form of exchanging containers between carriers. • The case study suggests the container interchange is realistic. • The ‘Container Interchange Matrix’ (6 R model) is an effective tool in container interchange process. 4/8/2018 GOL International Conference 2018, Le Harve 16
- 17. The way forward……… Introducingthe Container Interchange (6R model) to the industry 1. Make It a Logical Solution 2. Gain an Introduction 3. Choose the Right Time 4. Invite Expertise 4/8/2018 GOL International Conference 2018, Le Harve 17
- 18. Best Research inports and shipping -2016 4/8/2018 GOL International Conference 2018, Le Harve 18 Awarded by The Chartered Institute of Logistics & Transport Sri Lanka (CILT SL) ,Society of Transport & Logistics Sri Lanka, and East Asia Society for Transport Studies (EASTS) The Benefits of Container Exchange between Carriers: A case study
- 19. 4/8/2018 GOL InternationalConference 2018, Le Harve 19 Assessment of Strategies that Lead to Optimization of Utilization of Maritime Containers in Sri Lanka
- 20. 4/8/2018 GOL InternationalConference 2018, Le Harve 20 Colombo International Maritime Conference -2015 Colombo International Maritime Conference -2016
- 21. Thank you 4/8/2018 GOLInternational Conference 2018, Le Harve 21