Hamburg, Germany – Container xChange is a maritime startup out of Hamburg whose mission is to fix the global container repositioning problem and in doing so, save shipping companies billions of dollars.
The company was launched by Johannes Schlingmeier and Christian Roeloffs in 2015 while both were working as consultants at the Boston Consulting Group (BCG). While there the two worked on a number of maritime assignments where they became aware of the magnitude of the container repositioning problem and hatched a plan to fix it.
The Container Repositioning Problem
Empty containers don’t make money. They cost money. To make money a container needs to be full of revenue-generating cargo to move around. Each day an empty container lies idle in a port, it costs the carriers a fortune in fees, handling charges and so on. Ultimately this affects the price consumers pay.
Every year, shipping lines have to spend billions of dollars on shipping empty containers full of nothing from point A to point B as they reposition their containers (ie move them to another port or terminal) to places where they can be filled with revenue-generating cargo. This is called the “Container Repositioning Problem” and it’s a big one.
More than 200 million containers are being moved every year with one-third being moved empty. For a typical carrier, repositioning costs represent 5 to 8 percent of total operating costs.
A solution to the Container Repositioning Problem
The solution sounds simple enough. Create an online platform where companies who have empty containers at a specific location can connect with companies who need empty containers at that location. That is the essence of what Container xChange does.
We bring transparency into container logistics and connect container owners and users on a neutral online platform.
Container xChange’s platform now covers 500,000 containers in 2,500 locations globally. The company reports that it is adding up to 25 new users monthly and facilitating several thousand transactions for its users monthly as well. The companies include SEACO, HMM and Kuehne + Nagel as early adopters and customers of its service.
Q&A with Florian Frese at Container xChange
PortandTerminal.com had the opportunity to speak with Florian Frese from Container xChange. The following is a summary of our discussion, edited for the sake of brevity and clarity.
Perhaps a dumb question, but why is there a Container Repositioning Problem?
It’s not a dumb question at all. The main reason is that there are trade imbalances in the world. Some countries export more to some of their trade partners than they import from them. That leaves an imbalance. The Chinese/American trade flows are a good example of this. China exports more to the United States in containers than it imports from them in containers. This leaves a bunch of empty containers in the USA without cargo to fill them for the return trip to China.
When that happens lines are left with little choice to but to reposition their containers by shipping them to other ports. That costs the shipping industry billions and creates some pretty negative environmental issues too. That’s the problem we’re trying to fix at Container xChange.
How big is the Container Repositioning Problem in dollar terms?
The problem is massive. $20 billion is lost over completely avoidable and company-specific container positioning imbalances each year.
You’ve also spoken about the negative ecological impact of moving empty containers around. Would you please expand on that a bit.
Sure. Let’s look at an example. An empty container shipped empty between China and Europe would end up contributing 1.9 kg of CO2 to the atmosphere without the benefit of actually moving any cargo from point A to point B. Now multiply 1.9 kg of CO2 by the number of empty containers that are being moved around and you see that there is a huge environmental issue here as well.
In an interview you gave some time ago you mentioned that one of the biggest hurdles Container xChange had to get over is trust and recognition. You said that it took about 2 years to get over that hurdle in the maritime space. You’re more established now. Have the discussions gotten easier?
Discussions have definitely gotten easier! Companies in our space are getting more used to working SaaS offerings like Container xChange and invest more time in finding innovative solutions that increase their own success. We operate xChange now for more than 4 years and more than 300 companies use the platform on a daily basis. That creates some sort of word-of-mouth and a certain “fear of missing out” because huge and well-kown companies like Seaco, HMM or Kuehne+Nagel use xChange to find SOC Containers and one-way partners.
What’s it like to work at Container Xchange? Would you describe yours’ as a tech start-up culture?
Container xChange is a great place to be at! We’re a team of 35 people from several different countries with high ambitions and great skills. Some of us have tech background while some already had a great career in container logistics which makes it quite unique for everyone. We develop 100% of the platform in-house and our customer service team speaks almost every possible language and is available nearly 24/7 for all of our customers around the world.
Last question Florian. Which companies or startups in the maritime space are you watching now? Who are the disrupters in our industry?
FreightTech is still relatively small compared to for example FinTech. That being said, although Flexport raised $1bn from Softbank’s Vision Fund we think that we’re at the beginning of a disruption. Digital freight forwarders like Flexport or Freighthub, marketplaces like Freightos or Container xChange, services like Xeneta or Kontainers … we all contribute to innovation, transparency, data standards and trust in transport and shipping together.
Copyright © 2019 PortandTerminal.com. All rights reserved. This material may not be published, broadcast, written or redistributed.