Digital platform simplifies shipper-owned container sourcing

Digital platform simplifies shipper-owned container sourcing

Online platform Container xChange aims to streamline the process of sourcing shipper-owned containers (SOCs) for a growing number of market participants who wish to save costs and gain control of logistics processes.

Traditionally, sourcing an SOC can be long-winded as a shipper would have to reach out to companies, set up legal agreements, negotiate terms, add container insurance and use separate tools for tracking and invoicing afterwards.

Florian Frese, Container xChange’s marketing manager, told CM: “Our mission, so to say, is to make booking a container as easy as you would book your flight or your hotel.”

Carrier-owned containers (COCs) account for a majority of the entire transport chain and are a fairly simple option as the shipper pays the carrier an “all-in” rate to move freight from A to B.

The carrier is then responsible for the in-between stages and providing the container – meaning that the shipper has no further obligations to move or utilise it once it is unstuffed.

In regions where trade imbalances have resulted in an overstock of empty containers, shippers using a COC could also benefit from significant freight rate discounts.

However, costs have the potential to go up on other routes, for example, when the end destination is at a port not necessarily on a popular trade route or it is located in remote hinterland.

Frese explained that, when compared to COCs, SOCs offer more flexibility and can significantly reduce demurrage and detention fees.

He said: “[Fees] can easily exceed US$200-300 per day and per container because the shipping lines are interested in a quick turnaround.”

Demurrage and detention fees on the platform are shockingly low in comparison at US$1-2 per container, which Frese attributes to the different interests of Container xChange’s users.

Container traders, leasing companies and to some extent Non Vessel Owning Common Carriers (NVOCCs) on the platform are more interested in simply moving containers.

Leasing companies make money through long leases and Container xChange helps them to move containers from one agreement to the other.

Container traders make up 20-30% of the platform’s customer base as they use it to move containers bought in bulk, usually from Asia, to sell in Europe, Dubai, the Middle East and the US where they make a profit.

Frese said: “Even shipping companies on xChange are not interested in a quick turnaround because they use xChange to reposition their empty containers to balance out the equipment.

“So if they’ve got too much of an equipment in one location, they use xChange to help users move their boxes to where they need the equipment the most.”

Container xChange is able to reduce the time-consuming process of sourcing SOCs for shippers from weeks to just minutes.

Frese said: “If you’ve got a customer waiting to ship their cargo from location A to location B they don’t want to wait for you for over a week until you finally find equipment.

“So with xChange, we provide this transparency and companies can just use our search functionality and find partners that can help them exactly where they need it.”

Frese acknowledged the fact that before Container xChange was launched in 2015, companies had established relationships to different parties and were already doing business.

When companies first start to use the platform, it is often a test for stretches out of the company’s core focus.

Frese explained: “If you’ve got core your core stretches from Europe to Dubai, for example, then the customer is reaching out to you and he wants to ship goods from South Africa to Europe it would be super hard for you to find passage there.

“If you cannot help your customer with their search request you will lose the customer or will not win the new customer, so this is where people reach out to us and find new partners all around the world.”

Container xChange caters to 2,500 locations, mainly port locations, and almost 300 small and large companies such as Kuehne + Nagel, SEACO and HMM use the platform.

Frese added: “We are not magicians – we help provide transparency where it is but, of course, there are locations where it is hard for us to find containers because there are none.”