Nicholas Press: The Empty Shipping Container Problem Is Larger Than Just Poor Management
Executive Insights is a series by Shipping and Freight Resource that provides ongoing insights, enriching the knowledge of the readers with what is happening in the world of shipping, providing thoughtful analysis, and everything else you might want to know about the maritime, shipping, freight, logistics and supply chain industry..
Executive Insights is also a chance to pick the brains of industry veterans and leaders..
In this latest edition, Shipping and Freight Resource caught up with Nicholas Press CEO of CEC Systems for some insights into the challenges in the industry and the technologies..
CEC Systems is pioneering integrated industrial technologies to meet the challenges of shipping and logistics now and into the future..
What are the current challenges with regards to containers in the industry currently and how can CEC help in addressing these challenges?
N.Press: There are many challenges facing the industry at present. While many are attempting to digitalise the industry to generate new operational efficiencies and greater accountability, which is long overdue, the container problem is larger than just poor management.
The problems include the container itself as an asset within the operational environment. Regardless of where and when, empty containers will always exist as a result of trade imbalance. Countries import and export at different rates, and they often import and export different commodities.
As a result, the problem of storing, handling and transporting air will continue to grow as trade increases.
We are open in saying that you cannot solve the issue of empties, but CEC Systems strives to significantly reduce the impact and costs associated across the supply chain. CEC Systems develops containers and container-based solutions to help improve or generate new efficiencies for our clients.
What was the inspiration behind your innovative design?
N.Press: When I originally thought of the COLLAPSECON system, I was deployed with the Australian Army to Afghanistan.
Given the number of troops deployed, at one point we had thousands of containers at the major logistics hubs that were piling up because the cost to return them was greater than the cost of the unit themselves.
The design of the container and the method in which it collapses was inspired by the operational environment we were working in.
After assessing the complications containers created, I worked to develop a solution that was Simple, Efficient, Affordable and Safe (SEAS) not just for the end user, but across the entire supply chain.
Who are your ideal customers and how has the Collapsecon been received so far?
N.Press: We essentially target three main customer groups; these include the major shipping lines and container lessors, the regional (domestic) shipping lines, and the 3PL operators (mainly focused on rail logistics). To date, all parties introduced across these three groups have been very enthusiastic about the COLLAPSECON system and have requested to commence trials in 2019.
What are the main strengths and advantages of the Collapsecon and how does it compare against a conventional container
N.Press: COLLAPSECON has many strengths and advantages over a standard container.
Obviously, the fact that the container can collapse to a quarter of its size and combine with 3 others to achieve a 4-1 ratio is an advantage in itself. However, there are other advantages. Firstly, the container is strong and can take an active top load of over 380 Tonne.
This means that the space, handling and transportation of empty containers is reduced by up to 75% in comparison to a standard unit.
Additionally, when combined the empties can be placed at the bottom of the stack on a ship or at port which significantly reduces double and triple handling. The system combines using no external parts. The method of interlock is built into the design itself.
Who is your main competition in the industry and how has CEC distinguished its products and services, and what are some differences that we should be aware of?
N.Press: Our main competition at present is HCI from the Netherlands. They have developed 4FOLD which has been in the market for several years. Where we distinguish ourselves is our product. Their system collapses vertically, forming essentially, a flat pack.
Our patented COLLAPSECON design retains its height and collapses from a width perspective enabling us to pack containers like a toaster. Additionally, our patented end frames not only form our method of interlock, they allow for a significant amount of weight to be placed on top of the unit whether it is in the single or combined states.
We have also distinguished ourselves by developing a collapsing station that ensures the system is collapsed/expanded using the least amount of handling steps, in the fast time, while minimising wear and tear and ensuring the safety for operators.
The concept of foldable containers is not new. Have other players such as HCI reached critical market penetration to be a business case? If not, why not? If not, how CEC is going to address the challenges?
N.Press: The concept of collapsible containers is not new, it has been around since about the late 80’s early 90’s with many different designs considered.
HCI has been the most successful to date however, their design has its own limitations which has prevented it from reaching widespread market adoption. HCI and other previous designs have proven that the industry is overall in favour of collapsible container solutions but are yet to find a system that meets its needs.
Collapsible solutions have achieved the goal of saving space and reducing redistribution requirements, but to date, those savings have been outweighed by significant increases in operational handling.
CEC Systems has addressed these limitations through analysis, stakeholder engagement and design; with a solution that is simple to operate, generates real-time efficiencies throughout the value chain, is affordable to purchase and utilise in comparison to a standard unit and offers complete safety for operators.
How does CEC plan on establishing itself in a market which is already filled with established players with conventional containers which have been tried and tested over the years?
N.Press: We are realistic as to the state of the market and the appetite for our technology. Ultimately, we are not trying to revolutionise the industry, nor are we asking the industry to change its processes or infrastructure. We are trying to evolve a current product that has existed for decades to be more efficient.
We also state that our system is not meant to replace every container in the world. We are targeting long-term to capture 2.4% of annual global production (120,000 units) per year on predominantly closed loops.
We achieve this by working with customers to identify where the system could be most effective to them and then running trials to build the case for expanding COLLAPSECON’s use on those routes.
Which are the main markets in which Collapsecon is operating in currently and where can one get hold of your product?
N.Press: We are currently heavily focused towards the Asia-Pacific market. Soon we will be expanding into Europe and North America however, given the small number of units in our trial fleet and the size of our company, we work closely and methodically with our customers to ensure successful uptake.
With regards to getting a hold of our product, as we are constantly working to enhance the system we do not hold stock on hand. We only build when confirmed orders have been received.
Should customers want to trial the system, customers can contact us to request to trial up to 20 units for a period of 4-8 weeks.