This document summarizes a presentation on factors influencing container interchange. It discusses how operational, legal, branding, and other implications impact carriers' willingness to engage in container sharing with competitors. Specifically, it finds that carriers are most reluctant when tracking and potential legal issues are involved. There is also reluctance due to concerns about negative impacts on brands and the inability to quantify financial benefits upfront. However, container sharing was found to provide inventory balancing and cost savings opportunities. The presentation evaluates these factors and their relationship to carriers' decisions regarding container interchange.

1. 13th International Conference on Business
Management (ICBM- 2016)
Container Inventory Management:
Factors influencing Container
Interchange
L. Edirisinghe J. Zhihong A. W. Wijeratne

2. • INTRODUCTION
– CIM solutions
– Objectives of research
• LITERATURE REVIEW
• METHODOLOGY
• RESULTS AND DISCUSSIONS
Presentation
schedule
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3. Container Inventory Management
Methods
1. Balancing the supply and demand through
reposition of excess containers to where
those are deficit (a costly exercise)
2. Container leasing (on-hire)
3. Collapsible or foldable containers
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4. Objectives
1. To find the impact of operational; legal;
marketing; confidentiality implications on
container interchange
2. To study the perception about financial and
non financial benefits
3. To investigate the carriers’ presumptions
4. To understand the carriers’ reluctance to
associate with competitors
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5. The literature review
• Because of the trade and weight imbalance,
transpacific carriers need to return substantial
numbers of empty containers back to Asia
(FMC, 2012)
• unmet demands within a given period due to
insufficient empty containers will be lost
(Dong, et al., 2013).
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6. The paradox
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(a) TA-16 Carrier Agreements Active in the US/North Europe Trade for 2006 through 2010
FMC Number Name Members
1 11375 Trans-Atlantic Conference Agreement ACL, Maersk, MSC, NYK, OOCL
2 11280 Star West Joint Service Agreement Albion, Overseas
3 11854 Greensea Inc. Joint Service Agreement Green Chartering,
4 11982 Evergreen Line Joint Service Agreement Evergreen, Hatsu, Italia
5 11602 The Grand Alliance Agreement II HL, NYK, OOCL
6 11960 New World Alliance Agreement APL, Hyundai, MOL
7 10955 ACL/H-L Reciprocal Space Charter and Sailing Agreement ACL, HL
8 11415 MPA Space Charter and Sailing Agreement ACL, MSC
9 11705 Grand Alliance-CP Ships Atlantic Agreement CP, HL, NYK, OOCL, PO
10 11794 The COSCON/KL/YMUK/ Hanjin Worldwide Slot
Allocation and Sailing Agreement
Cosco, HJ, KL, YM
11 11867 Norasia/GSL Round The World Service Agreement
CMA CGM/CSCL/ELJSA Cross Space Charter,
Gold, Norasia
12 11955 Sailing, and Cooperative Working Agreement China, CMA, Evergreen
13 11912 Dole-HSud Space Charter and Sailing Agreement Dole, HSud
14 11927 ITS/Hatsu Marine MUS Slot Charter Agreement Italia, Hatsu
(b) TP-16 Carrier Agreements In The Transpacific Trade For 2006 Through 2010
Number Name Members
1 11602 The Grand Alliance II NYK, OOCL, HL
2 11435 APL/HLAG Space Charter Agreement APL, HL
3 11794 COSCO/KL/YMUK/ HANJIN/Senator Worldwide Slot
Allocation & Sailing Agreement
K-Line, Yang Ming, Hanjin, COSCO
4 11885 CMA CGM/MSC Reciprocal Space Charter, Sailing
And Cooperative Working Agreement
CMA CGM, MSC
5 11940 Cross Space Charter, Sailing And Cooperative Working
Agreement
CMA CGM, Maruba, China Shipping
6 11948 CMA CGM/CSCL Cross Space Charter, Sailing And CWA-
Central China/US West Coast, Yang Tse/ AAC2 Service
China Shipping, CMA CGM

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Source :(Mittal, 2008)
Current Practice in Global Container supply chain

8. 06/06/2019 ICBM 2016 8
The Matrix of intra-port Collaboration
Edirisinghe, L., Zhihong, J., & Wijeratne, A. (2015). Evaluation Of Expected Payoff
Through Container interchange between shipping lines: a solution to container
inventory imbalance in Sri Lanka. Int. J. Logistics Systems and Management, 21(4), 503-
533.

9. 06/06/2019 ICBM 2016 9
The Matrix of inter-port Collaboration
Edirisinghe, L., Zhihong, J., & Wijeratne, A. (2015). Evaluation Of Expected Payoff
Through Container interchange between shipping lines: a solution to container
inventory imbalance in Sri Lanka. Int. J. Logistics Systems and Management, 21(4),
503-533.

10. Methodology
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Operational
Legal
Branding
Benefits
Feasibility
Confidential data
Competitors
Container interchange
Factors that
influence
carriers/
decision to
interchange
containers

11. Results and discussions- 1
• The right balance of ‘Container inventory at a
given location is a vital factor in liner shipping
A Container inventory is a collection of
containers
• The container carriers have been successfully
exchanging the ships’ space (slots) for almost
two decades now
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12. Results and discussions- 2
1. A strong relationship between the carrier’s
resistances to container exchange and
container tracking was evident
2. The relationship between container sharing
and possible legal implications is also
significant
3. potential negative impact on the brand name
The perishability characteristic has a huge
impact thus branding play a role
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[1].
Factors that influence container interchange

13. Results and discussions- 3
4. Carriers are reluctant to share containers as
there is no mechanism to quantify financial
and non financial benefits in advance
5. Myopic view in the industry about the reality
of container sharing
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Factors that influence container interchange

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(Key: shaded boxes with (-) in front of the number indicate deficit inventory while clear boxes denote excess inventories)
Total empty container reposition in the proposed “Interchange” scenario
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 (without
OT/FR/FB) 221423 189813 31610 17,530,753.00 19.29
Benefits of exchange and savings for major types of containers- 2013 Port of Colombo

15. Results and discussions- 4
6. No statistical significance between the
container sharing and confidential data
7. No relationship between container exchange
and the carriers’ dislike to associate with
competitor lines.
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Factors that do not influence container interchange

16. Thank you
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