Empty Container Optimization (ECO) (http://www.narcis.info)

Abstract

Given the strong focus on business sustainability nowadays, more and more companies view their return flows on a global scale. Life cycle management is becoming an integral part of global supply chains, which ultimately leads to more involvement with the installed base through service logistics and configuration management as well as proper take back and recycling systems for End-of-Life (EOL) products. Drivers behind globalization of recovery operations include globalisation of forward operations (e.g. outsourcing to low wage countries), installed base related operations (service, etc) and legislation on EOL products. Globalisation of recovery now often hindered by legislation creates opportunities for lower recovery costs, more efficient recovery and higher secondary market volumes. Furthermore, globalised return flows provide counter-balances against the current imbalances in trade flows between Asia, Europe and the USA, which might improve transportation efficiencies and reduce empty container kilometers. Moreover, on the right scale, return flows may provide mainports with important opportunities. For instance, the recovery of aluminum (8.3 million tons per year) has turned into a very profitable business with a well-established infrastructure for recovering scrap metal, because of the widespread use of aluminum and its intrinsically high value. The ultimate goal of this project is to investigate the business opportunities for the Port of Rotterdam (HbR) concerning closed loop supply chains, in particular to solve the empty container inefficiencies. In order to achieve this we divide the study into two phases (Table 1):.In phase 1 (the first year, see part B of this proposal) we focus on the IT sector, in phase 2 other sectors are considered. For each sector we consider three steps. The first step in the project is a conceptual study to determine and define the field of global sustainable closed loop supply chains, and fit it into the mainstream supply chains management and supply chain economics. The second step of the study is the development of a modeling approach to analyse global closed loop supply chains. In the resulting model, flows should be represented and forecasted in such a way, that different strategic and tactical scenarios can be evaluated. It should take into account that different actors have different goals. For instance, shipping companies care about ship turn-around time. Transport companies on the other hand just want to route there trucks efficiently. Another important issue to tackle is who will take the leadership in the supply chain and under which conditions. The third step of the study focuses on the repositioning of containers and other loading units. Worldwide repositioning of empty containers is a substantial problem for international container transport operators, and a major cost driver. This sub-project will therefore contribute to the analysis and development of strategies for the repositioning of loading units, using results of the previous steps. This part of the project will result in a number of market assessments. We use HbR for data on empty container repositioning in phase 1. Based on this, we can roughly assess the business opportunities. For this part of the research we will attract additional companies from the maritime sector. In phase 2, for extensive validation we apply simulation modeling. The fourth step of the study aims to develop strategies for gateways to improve their position in global recycling. An example of this is the Port of Rotterdam, who already has a considerable position in the facilitation of certain recycling flows (paper, cars, scrap metal, wood and so on). A better understanding of the developments in global recycling flows, through the analysis of global closed loop supply chains can help understand and extend this position. We define scenario s, based on those in phase 1, in which the imbalance of containers and other loading units is developed into business opportunities. Using data of different agencies as well as additional company data, we generalize the forecasts for other sectors, using the model developed in part 2. This step will ultimately result in a number of specific strategy documents for HbR.

Related organisations

Secretariat	Centrum voor Telematica en Informatie Technologie - CTIT (UT)
Collaboration	Operational Methods for Production and Logistics (UT)

Related people

Project leader

Dr. P.C. Schuur

Classification

A52000	Trade and international commerce
A56000	Distribution, logistics, planning
D43000	Economics