Shipping containers get collapsible design seen as a remedy for traffic jams

By Augusta Saraiva (Bloomberg) –

Few of the tools of the global economy have survived without major innovations as long as the shipping container. Supply disruptions around the world offer an opportunity to test this situation.

As ports, marshalling yards, and warehouses become congested with standardized metal boxes both empty and full of cargo, the stars are lining up for a product that was hard to sell before the pandemic: containers of expedition that folds up like an accordion or foldable for up to one-fifth of their usual size. At least that’s what their supporters hope.

Nearly 27% of the 862 million cases measured in 20-foot equivalent units that pass through ports around the world this year will be empty, Drewry estimates. The cost to the shipping industry to get them to where they’ll be loaded is about $ 20 billion, the Boston Consulting Group has calculated. Many will spend days or weeks occupying space in already crowded waiting areas and depots, exacerbating delays along supply chains.

It all has executives everywhere, from Inc. to pop culture-inspired bobblehead maker Funko Inc. and alternative milk producer Oatly, struggling with how to get the shipping containers needed to transport. their goods.

“We can solve part of this imbalance, or at least the inefficiency of air transport,” said Hans Broekhuis, CEO of Holland Container Innovations Nederland BV, known as 4Fold.

In 2013, 4Fold’s 40-foot metal crates became the first collapsible units to achieve certification from the Convention on Safe Containers and the International Organization for Standardization, among others, meeting the standards required by shipping companies, terminals and railway companies. More than 15 carriers and shippers sailing in 60 ports around the world are testing the Delft, Netherlands-based company’s eco-friendly containers, which can be folded up to a quarter of their volume, taking up less space on trucks, ships and the docks.

These advantages have seen Jim Hagemann Snabe, president of the world’s largest shipping company, AP Moller-Maersk A / S, call collapsible containers “dream of the shipping industry ‘last year. At the same time, producers of consumer goods, including Procter & Gamble Co., are also trial technology.

Despite the hope raised by carriers and shippers, higher upfront costs and reluctance to switch to a new business model have kept collapsible containers from becoming mainstream.

As companies increasingly find themselves in a hurry to find answers to supply chain issues, the trade-offs of investing in new technology could get smaller, said Santtu Seppala, chief strategy officer at collapsible container company Staxxon LLC. After its 20-foot containers gained full certification at the height of the pandemic, the Montclair, New Jersey-based company plans to bring them to market next year. The company has dozens of potential buyers who have expressed interest, he said.

“Our solution would not only greatly help alleviate the current crisis, but we would also help a lot to prevent a similar crisis from happening again in the future,” Seppala said.

Shipping containers have remained virtually unchanged since the International Maritime Association standardized them about five decades ago. In an area that McKinsey & Co. refers to as “deeply conservative” where “change comes only slowly,” their foldable counterparts have struggled to gain momentum.

Carriers could save up to 57% on domestic transport costs by relying on collapsible containers, according to Shao Hung Goh, professor of logistics and supply chain at the University of Social Sciences in Singapore. Despite higher annual purchase and maintenance costs, foldable units would still be a more cost-effective option, according to his research.

The question remains as to what is the optimal mix of foldable and regular container carriers in their inventory, he said. If too few or too many collapsible boxes are deployed, the purchasing costs could outweigh the benefits. “You would need to find three more collapsible containers to make the same trip,” he said.

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