4th International Conference on Logistics Operations Management (GOL), which will be held at the University of Le Havre.

1. Container Interchange: the 6 R Model Approach
Lalith Edirisinghe CINEC Maritime Campus , Sri Lanka
Jin Zhihong Dalian Maritime University, China
A. W. Wijeratne Sabaragamuwa University, Sri Lanka
1
Presented by Lalith Edirisinghe
2018.04.10
4/8/2018 GOL International Conference 2018, Le Harve 1

2. • Introduction to container inventory
management
• Collaboration among carriers and container
interchange
• Conceptualizing the research
• Results, analysis, and discussions
• Introducing the 6 R Model
• Way forward………..
Discussion
topics

3. Container re-positioning cost worldwide accounts for
USD 20 billion annually
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• Container inventory
imbalance is the root cause
• This cost may be reduced
by 15-20 % through
container interchange
©

4. Sea Container Supply Chain
Laden Imports
On-hired/Leasing
Empty Imports
Supply Sources Key Contributors Warehouses &
Distribution Centers
Customers
CFS Lift-On/Off
Port Stevedoring
Repairs & Washing
Port
Demurrage/rent
CFS Rent
Importer
Exporter
4

5. Container Inventory Management
• However, equality in number of containers
is not sufficient
• Right type and ‘right size’ of containers
• Containers at Right place at the right time
• Right quality of containers in the right
quantity
A balanced
inventory means,
Exporters’
demand = Laden
containers
imported

6. Collaboration among carriers and container
interchange
Multiple carriers pool themselves and ,
1. Share the information of present
and future empty container stocks
2. Offer the excess containers to those
who are deficit
3. Borrow containers from others who
are excess when in shortage
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7. Is this feasible?
• Slots and containers are complementary service components in
shipping
• If the “slots” can be shared between alliance partners why not
“containers” ?
• Slots-Intangible >> tangible
• Containers < tangible>
• Will carriers be interested……….
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8. 4/8/2018 GOL International Conference 2018, Le Harve 8
Likewise many
Alliance
agreements………

9. Alliance agreements provide provisions for equipment interchange
-Transpacific Trade for 2006 through 2010
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Carrier World
ranking*
TEU* Share* Name of Alliance Agreement/s
NYK 12 501,856 2.7% The Grand Alliance II
OOCL 11 506,179 2.8% The Grand Alliance II
HL
6 746,057 4.1%
The Grand Alliance II
APL/HLAG Space Charter Agreement
APL 10 581,422 3.2% APL/HLAG Space Charter Agreement
KLine 17 359,865 2.0% COSCO/KL/YMUK/ HANJIN/Senator Worldwide Slot Allocation &
Sailing Agreement
YangMing 14 419,625 2.3%
Hanjin 8 591,946 3.2%
Cosco 5 799,851 4.3%
HYMM 15 384,924 2.1% HMM/MOL Space Charter Agreement
MOL 9 583,066 3.2%
CMA CGM
3 1,586,134 8.6%
CMA CGM/Maruba Cross Space Charter, Sailing And Cooperative
Working Agreement
CMA CGM/CSCL Cross Space Charter, Sailing And CWA-Central
China/US West Coast, Yang Tse/
Maruba NA NA NA CMA CGM/Maruba Cross Space Charter, Sailing And Cooperative
Working Agreement
China
Shipping 7 658,702 3.6%
CMA CGM/Maruba Cross Space Charter, Sailing And Cooperative
Working Agreement
CMA CGM/CSCL Cross Space Charter, Sailing And CWA-Central
China/US West Coast, Yang Tse/
Total 42.10%
*World ranking, Vessel Capacity in TEUs, and share as per 18 July 2014
Source: (alphaliner.com, 2014)

10. A Case study in Sri Lanka
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Container
Type& Size
Imbalance
when Work
alone
Imbalance when
Collaborate
reduction of
empty reposition
Savings from
VCP USD
Saving as % of
reposition
cost
20'GP 158221 156285 1936 672,953.60 1.22
40'GP 10486 794 9692 5,506,025.20 92.43
40'HC 44586 27842 16744 9,512,266.40 37.55
45'HC 2155 101 2054 1,166,877.40 95.31
20'&40'RF 5975 4791 1184 672,630.40 19.82
Total 221423 189813 31610 17,530,753.00 19.29
1. Interchange is feasible
2. But some features of containers will have
barriers

11. Approach to the Solution
• Awareness in the shipping community about VCP
• Regulate the Container Inventory Management (CIM)
• Introduce tools and change the container controllers’ psychology
(reactive>>>proactive)
• Propose local authorities to measure CIM competence of carriers
• Propose international forums to link CIM competence with country
index (LPI, GCI, Doing business)
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12. Conceptualizing the study
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Type
GP HC FT FR FB OT RF
Size
20' 40' 45'
Quality
Quantity
Location Time
Exporters’ demand
Carriers’ ability to
supply
Imbalance

13. Exporters
view about
container
interchange

14. Six independent
variables and
“Exchange” R Square
value is 0.623
The overall effect of all
variables in ANOVA is
statistically significant
at P < 0.05.

15. The relationships among the independent
variables
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Variables Estimate S.E. T Statistic P
Quantity Location 0.823 0.158 5.222 0.000
Quantity Type 0.365 0.145 2.522 0.012
Quantity Quality 0.594 0.100 5.942 0.000
Quality Location -0.053 0.044 -1.220 0.223
Size Time 0.482 0.073 6.642 0.000
Size Quality -0.257 0.049 -5.214 0.000
Size Quantity -0.064 0.160 -.402 0.688
Size Type 0.609 0.081 7.515 0.000
Size Location 0.950 0.095 9.984 0.000
Type Quality -0.008 0.042 -.198 0.843
Type Location 0.584 0.076 7.669 0.000
Time Location 0.537 0.070 7.661 0.000
Time Type 0.389 0.064 6.086 0.000
Time Quantity 0.695 0.138 5.018 0.000
Time Quality 0.139 0.039 3.527 0.000

16. Conclusions
• Container Inventory Imbalance could be minimized through
collaboration among carriers.
• The collaboration comes into effect in the form of exchanging
containers between carriers.
• The case study suggests the container interchange is realistic.
• The ‘Container Interchange Matrix’ (6 R model) is an effective tool in
container interchange process.
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17. The way forward………
Introducing the Container Interchange (6R model) to the
industry
1. Make It a Logical Solution
2. Gain an Introduction
3. Choose the Right Time
4. Invite Expertise
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18. Best Research in ports and shipping -2016
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Awarded by
The Chartered Institute of Logistics & Transport Sri Lanka (CILT SL) ,Society of Transport & Logistics Sri Lanka,
and East Asia Society for Transport Studies (EASTS)
The Benefits of Container Exchange between Carriers: A case study

19. 4/8/2018 GOL International Conference 2018, Le Harve 19
Assessment of Strategies that Lead
to Optimization of Utilization of
Maritime Containers in Sri Lanka

20. 4/8/2018 GOL International Conference 2018, Le Harve 20
Colombo International Maritime
Conference -2015
Colombo International Maritime
Conference -2016

21. Thank you
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