[180710.EN.SEA] Efficient Container Moves Help Stretch Box Supply To Meet Demand

IN The Container Shipping Manager last week we began to analyse the current situation concerning the acute container shortage in the shipping industry, which has helped rebalance the supply and demand equation for vessel space.

Although the much improved supply and demand situation has benefited carriers to the point where freight rates are now at very healthy levels, the box shortage is still an issue that needs addressing.

One conclusion that we reached in last week’s story was that carriers would need to devise a way to turn their boxes around more quickly to eradicate the inefficiencies resulting from the inability of lines to get boxes to where they are needed.

Today in The Container Shipping Manager we will explore this issue in further detail by looking at the current levels of container turn time efficiency, and what can be done to help improve the current inefficiencies in the market.

To refresh our readers’ memory let’s now take a look again at the situation facing the industry in terms of the supply and demand balance in the above graph. Here we can see the demand for boxes, or laden export cargoes, (trade volumes), the supply of boxes (container boxes) and the supply of containership space (vessel fleet).

The graph illustrates that the supply of container shipping capacity is growing both demand for containers and the supply. Essentially, we can see the inefficiency of vessel space. But what we now need to see is the inefficiency of container moves.

In the below graph we can see the average turn time for containers on a per TEU basis. A container’s turn time is calculated as being the number of days a container takes from the last point where it received revenue to the next time.

The longest average turn time on record in the illustration is 2009, where containers across the industry averaged a turn time of 80.13 days.

Source : CSM, 18.07.10.