I interviewed Marco Hazan who discussed Helping Shipping Lines and Container Operators with the Imbalance of Empty Containers and Repositioning Strategies.
What is the problem that shipping lines and container operators face today?
Well the shipping industry has been a complicated year, or at least couple of years. And uh, rates are going down or are at a very low part in these, especially these 2015. And that has taken this, shipping lines and container operators to be more concerned and aware of their operation and cost. And a big part of their operation and cost is related to the positioning of empty containers. So because of the nature of their business, each port means, each port turns into a surplus or deficit location most likely because they don't have the same amount of containers coming in that the amount of containers that are coming out of that same port. So they end up having surplus of containers in some ports and a deficit in others. And that brings them to the need of positioning in these empty units, to bring them from where they have a surplus to where they have a deficit. And on that it's a huge expenditure, basically the industry as a whole thing spent every year something around $16 billion US, just in using this empty unit from one port to another. And that's a big issue for them and there has been different approaches to this problem. But basically at some point you have to move the empty boxes from place to place. It has some environmental outcomes as well.
How can this problem be addressed?
Well one of the solutions that it's already there and we've seen is that some shipping lines and container operators like companies and those kind, basically sometimes they in very small clubs let's say, they know each other and they would call each other with asking them if they have spare containers or they have spare containers where they have surplus. So uh, in some cases they find this type of opportunities and they do what is called a one way exchange. Which is basically they borrow containers from each other and a company that has a surplus in a certain port would give those containers to someone who has a deficit at the same port that would return them to them and in a location that it's more useful than the original one. So basically both companies avoid uh, having to reposition this unit and the containers don't get moved empty, so they get moved with cargo.
Do you have any success examples?
Well yeah, we find those. We started being like, acting as a third party, neutral third party and independent from all shipping lines. Basically we're asking all of them or all the ones that are patriating with us about their inventory levels. So basically for each port if they have deficit or surplus. And then we start processing that information and trying to find these matching opportunities. When we start finding them, we start treating them opportunities in a blind manner, let's say without telling them whose the counter party that needs their surplus containers or vice versa. And um, once both parties agree on terms and conditions and on the same opportunity, then we release the information of who they are so they can do a one way direct exchange. And that has been proven successful so far. Today doing operations, we are having operations on a weekly basis and there's lots of opportunities to grow.
Can you provide a brief background of yourself?
Well I'm an industrial engineer and my basically, my experience comes from the management consulting industry. I had some past in some technology related businesses as well and then I got into retail and through retail I got into logistics and then I got deeper into logistics, being a customer for shipping lines, and that's how I got to know more about the shipping lines and the shipping industry. I got to see about this problem.
Great and thanks Marco, for sharing today on this important topic.
Thank you, Dustin it's my pleasure. Thank you really for the interest and for the interview.
About Marco Hazan
Serial Entrepreneur | Investor