LONG BEACH, Calif. — Increased matching of inbound containers with export shipments and more use of ISO containers domestically could cut in half the amount the industry spends on empty truck and rail moves, a NYK Line executive said Tuesday.
Shippers, carriers and logistics providers spend roughly $660 million annually to reposition empty containers via roads and rails, estimates Gregory Tuthill, NYK Line’s senior vice president of sales and marketing. The industrial cost of moving empty containers via the rails back to the ports from the inland points is about $500 million, and $110 million is spent for repositioning vacant containers between ramps for export shipments. Plus, there is about $50 million spent on repositioning shipments on the truck side, Tuthill told attendees at JOC’s 13th annual TPM Conference.
Although match backing isn’t a new topic, the shipper and carrier community is increasingly interested in the approach because of the potential to cut down on costs. The empty container surplus is concentrated in the Los Angeles Basin, the Ohio Valley, the South and the New York metro area.
To increase accessibility of empty containers for exporters, the industry needs to continue to build out its transloading infrastructure. More domestic triangulation will also help, Tuthill said. NYK has increased its domestic moves 100 percent in the last three years, “because we have a heightened awareness to get empties back,” he said.
“We have taken empties from New York and brought them to Seattle and loaded them back. Those are domestic revenue loads at a discount to draw down on the empty repositioning costs ” Tuthill said.
He floated the idea of free equipment co-ops via a Web platform, giving “access to equipment that is available to anyone who could use it to get it back to the port areas.” He noted there were similar platforms already but that they charged users.
Another way to cut down on empty hauls would be providing incentives to major shippers to return the empty container to a transloading facility and give round trip pricing if they load the containers with export shipments.
IMS Worldwide President Curtis Spencer said his company is working to tap underutilized intermodal equipment by running a loop train between the Central Valley, the major agriculture region in California, and the ports of Long Beach and Los Angeles to reduce empty lifts at the terminals.
“We are going to run a loop train that drops off full containers as opposed to draying them up the Central Valley, pick up full loads of agriculture products back (to the ports) and export them,” said Spencer, who heads the Houston-based logistics and foreign trade zone consulting firm.