If the foldable container is so good, why aren’t there hundreds of them in ports around the world? Here we explain some considerations about the implementation of foldable containers in the freight forwarding market.
A question we are often asked is, if the use of the foldable container has so many advantages, why hasn’t it been invented earlier, and why aren’t shipping lines, especially large ones, already using it?
The logistics industry has been trying to develop the idea of the foldable container as an answer to the problem of transporting empty containers for several decades. In Jim Hagemann Snabe’s words, the current chairman of Maersk, it has long been a dream of the shipping industry. But why hasn’t it worked to date?
The answer to these questions is complex. As complex as the dry container freight industry is. It has to do with which routes the containers travel, container operations, and the state of the technique, among other things.
The major shipping lines say they would need a large part of their fleet to be foldable containers in order to benefit from its advantages, as their containers do not typically make round trips on a closed route, but are shipped once empty to where there is demand for empty containers at any given time.
For example, currently, a standard container leaving the port of Ningbo (China) loaded, and carrying freight to the port of Rotterdam (Netherlands), can move to another port in the Netherlands to carry freight to Spain, and once empty pick up freight in France to take it to the U.S. … being that it might never return to China, or do so in a very long period of time.
And they are right. If the container in the example were a foldable container, the optimization of the exposed route would be to find other empty containers with which to group in Spain to move them to France. And there would have to be demand in France for enough empty containers to make it worthwhile to send several.
Does this mean that the foldable container only optimizes round-trip routes?
It does not necessarily have to be this way.
In a round-trip route the advantages are very easy to see and to calculate, compared to the scattered routes that a large shipping line container can make, and that is why they are used as an example in all foldable container use cases. These routes are more common in more modest shipping lines, with more local traffic. That is why they are the first routes where foldable containers, such as Zbox, have started to be implemented.
The large shipping lines have sufficient resources to convert their fleet to foldable containers little by little, and/or to start implementing them on some round-trip routes. What is holding them back?
Let’s keep analyzing ⬇
It is not only the route that influences the adoption of the foldable container. The operation is perhaps the most important aspect of implementation. The folding and unfolding operations are in addition to those of a standard container. They must be simple and economical for the time and cost savings provided by a foldable container to remain worthwhile. The same goes for maintenance operations.
The Zbox foldable container has been designed to optimize its folding, unfolding and maintenance operations to the maximum. Proof of this is that 85% of its parts are the same as those of any standard container. And it can be folded and unfolded in a matter of minutes using machinery available in any depot or terminal.
However, many operators point out that they should perform the folding and unfolding operations in a depot, when normally their containers travel directly from the port terminal to the collection of freight, so the adoption of the foldable container involves an additional step by depot.
So, for the potential savings to be made, does it pay to perform the additional operations required to operate a foldable container?
On paper, the additional operations are far outweighed by the potential benefits. But what about in reality?
This question brings us to the next point ⬇
State of the technique
Foldable containers have been developed in various forms for decades. Currently, there are several designs at different stages of market development. But none have (nor do we) enough experience to answer the above question.
Today, it is not known exactly how many years of service life a foldable container will have, or how much will need to be invested in its maintenance.
Fortunately, there are innovative companies that decide to take a risk and adopt the foldable container, and answer these questions in a real way.
The first experiences in which Zbox containers are traveling will allow us to obtain real data about the use of the depot for folding and deployment, maintenance operations, and other aspects linked to the operation and benefits of using Zbox, allowing us to reduce the uncertainty surrounding its implementation.
Last but not least, being a more complex system, the foldable container usually requires a higher initial investment than the standard container. Sometimes this can slow down the initiative to adopt foldable containers, since with the same budget for buying or renting containers, you get a smaller number of containers if some are foldable.
That is why it is necessary to go towards innovative business models such as the one we use in Navlandis for Zbox; in which the initial investment is not necessary, and whose price is based on the savings achieved. In addition, it must be taken into account that the fact that they can be folded can mean that fewer containers are needed to cover the same needs.
The most common questions that arise in connection with the use of the foldable container have been discussed, but real experiences with Zbox will reveal others.
On the other hand, real experiences will surely also reveal additional advantages thanks to the flexibility provided by the use of Zbox. For example, the possibility of opening routes that are currently not viable due to the cost of repositioning, or a more efficient way of operating with which to avoid the current situations of congestion and lack of space.
The positive opportunities for foldable containers continue to grow as more and more people, companies and institutions continue to embrace innovation.
Do you want to know the latest discoveries about the use of Zbox foldable containers? Subscribe to our newsletter 🙂