ARCON Container - Effective Container Management
What are the current challenges in India’s Container Market?
The Container Market is faced with the challenge of repositioning empty containers, which are currently seeing an oversupply in the market, and shortage of storage space. The container industry was on a roll post-pandemic, stabilising over the past 6 months. The prices of the containers went up by more than 100% for brand new containers and more than 300% for old containers. However, prices have now corrected to the pre-pandemic level.Due to the container shortage during Covid, the industry began to produce a bigger number of containers than usual; this led to an excess stock. It will take a few months before container prices stabilise and new demand emerges. Many shipping lines are planning to take delivery of new vessels and the slow streaming of vessels from the shipping lines may increase container demand soon.
Although availability of containers is no more a challenge, there is a shortage of their storage space, which is being seen across the world. There are many ports where containers are in imbalance, which leads to increased empty repositioning of the containers and add to their increased operational cost and low productivity.
How does your company meet these challenges?
ARCON works on a hub and spoke model wherein we tag container movements for demand locations only. This approach helps us minimise the need for repositioning empty containers. Generally, we prefer to store them in locations where storage cost is either free or low. We also maintaining a tight container inventory and expand it only when necessary.
How crucial are ICDs and CFS?
Inland Container Depots (ICDs) are a crucial component in promoting imports and exports to hinterland dry ports in India. They have played a vital role in promoting India’s global EXIM trade. Container Freight Stations (CFSs) are keeping our ports decongested and will continue to play a significant role in the growth of shipping and logistics in the EXIM trade. However, with the implementation of Direct Port Delivery Policy (DPD) by the Government, the economic viability of the CFS business is in question.
In what ways are government policies bringing more efficiencies in the logistics industry?
The Indian government is proactively reducing overall logistics costs through its new logistics policy which focusses on cost-effectiveness, scalability, and safety. Government initiatives such as Dedicated Freight Corridors (DFC), PM GatiShakti, and Sagarmala are driving the logistics industry forward. The DPD policy of the government has undoubtedly helped the industry in reducing its overall import logistics cost.The Government is also pushing domestic shipping, container transportation via rail, including double-decker rail, improving the quality of highway infrastructure, constructing new airports and ports, etc. As infrastructure improves, logistics operations become more efficient, leading to cost reductions and increased scalability. However, a lot needs to be done by the Government to achieve better results for the logistics industry.
What are the factors driving demand for containerization?
- Economy of scale
- Safety and security of the cargo including protection from adverse weather conditions
- Ease of handling
- Ease of transshipment
- The ability of containers to facilitate global trade by traveling worldwide
LIFTING & SPECIALIZED TRANSPORT, SEPTEMBER u2013 OCTOBER 2023
