Of all the modes of freight transport, ocean freight is the most cost-effective. According to Econofact, ocean freight accounts for more than 80% of the world trade by volume. Shippers must ensure they use the maximum capacity since the rising cost of international shipping no longer allows them the luxury of shipping air if they want to remain competitive.
The Problem of Container Under-Utilization
A study of containers arriving in the US in 2018 reveals, on average, that the containers were only 65% full. Considering that the cost of shipping containers has gone through the roof in recent years, it is not difficult to see why improving container capacity utilization should be a matter of utmost importance for shippers. While a hundred percent utilization may not be achievable, even improving capacity utilization by 20% can bring about savings of millions of dollars for large businesses. Some handy tips on increasing container utilization to save money and improve competitiveness:
Product Packaging Design
While companies often pay a lot of attention to designing product packaging, often, they do not include containers in their considerations. The dimensions of the cartons can make a critical difference to the number you can stack on a container pallet. It can also permit double-stacking instead of wasting space by single-stacking. Reducing the carton height can allow double-stacking for better utilizing container space. You can also find out if altering the package dimensions will allow you to accommodate more products.
Shipping Container Size and Type
Many shippers do not think about the container type and size when booking ocean freight and prefer to leave it to their freight forwarders, who also provide online container tracking services. However, by optimizing the container type and size, they can achieve significant cost savings. If you find that by using a standard 40-foot container, you are not able to double-stack the pallets, you may consider using a 40-foot high cube container that is taller and will permit double-stacking. The additional cost is not too much, and you can ship much more. Similarly, sometimes, it may be preferable to book two 20-foot containers instead of a single half-filled 40-foot one.
Minimizing Packaging Dimensions
It can pay off to think about ways of reducing the amount of air you ship in the containers that can be used to carry your products. In addition to optimizing the shape and size of the packaging, you can also examine the potential for reducing the space inside the packaging to come up with slimmer or smaller cartons for better container capacity utilization. Sometimes, it may help to reexamine how you ship products because often shipping them in partially or completely knocked down condition may save a lot of space. Compressing and vacuum packing are other alternatives.
When you are paying for the use of the container, it does not make sense to leave the container partially full. By increasing the capacity utilization of the container, you will be able to reduce the per-unit shipping cost and the overall number of containers booked during the year.