Forwarders may well be tapped to help shippers secure shipper-owned containers but many are ill-equipped to meet those needs, according to a new survey Container xChange. Photo credit: Shutterstock.com.
Despite rising demand for shipper-owned containers (SOCs), only 10 percent of major forwarders are currently capable of providing an SOC to move goods from China to Germany, according to a mystery shopper survey from software provider Container xChange.
Hamburg-based Container xChange, which runs an online platform for buying, selling, and leasing shipping containers, submitted requests to 50 forwarders from a fictional company to gauge whether those firms are able to serve shippers wanting their own containers to avoid detention and demurrage costs and to assure access to equipment in a market where containers have been difficult to source.
According to Container xChange, 12 of the 50 forwarders surveyed accepted the booking for the fictional shipment of industrial coffee machinery parts via an SOC, but only five could source a container and, therefore, actually complete the move. That was an improvement from last year’s study, which found only three forwarders that could service such a shipment.
The use of shipper-owned containers remains low relative to total global container volume, according to Container xChange, with most boxes owned or leased by container lines. These containers, known as carrier-owned containers (COCs), enable shippers to pay an all-in freight rate, including the provision of the container itself. SOCs are used infrequently because it can be difficult for shippers to find reliable sources, Container xChange said in its survey report.
But use of SOCs could broaden in the wake of container scarcity that has plagued the liner shipping industry over the second half of 2020 and into 2021, Wolfgang Lehmacher, a logistics consultant and former head of supply chain and transport industries at the World Economic Forum, said in a statement at the release of the Container xChange report.
“SOCs empower forwarders and NVOs (non-vessel-operating common carriers) to offer a broader spectrum of options to their customers to increase flexibility, mitigate risk, and manage cost,” Lehmacher said. “The fact that ocean freight costs have skyrocketed will possibly lead to an increase in SOC market share. I think there are opportunities for SOC moves for agile forwarders.”
The ability to control trucking costs and avoid storage fees associated with COCs, he added, is a big plus for shippers, and can function as a service differentiator for forwarders that focus on providing SOCs. Container lines can also benefit from avoiding disputes about detention and demurrage, Lehmacher said. SOCs involve higher operational costs for shippers, but he said those costs might be offset by the avoidance of rate premiums and detention and demurrage costs in the current environment.
The Container xChange report also found that of the 12 forwarders that accepted the SOC booking, five already had access to the box, two offered to buy the container on behalf of the undercover company, and the remaining five suggested the shipper supply its own box.
Container pickup charges ranged between $300 to $2,700, a signal that some forwarders had relatively good access to available boxes, while others would need to purchase a container first.
Contact Eric Johnson at [email protected] and follow him on Twitter: @LogTechEric.
