Shipping companies and freight forwarders charge repositioning charges to return empty containers to their origin or demand location. When products flow unevenly between locations, one area has too many empty containers and another has too few.
Repositioning charges are most commonly seen in ocean freight, where containers are often transported long distances between continents. For example, if there is a high demand for exports from Asia to Europe, but fewer imports from Europe to Asia, shipping companies will need to reposition empty containers back to Asia to meet the export demand. This additional cost is then passed on to shippers in the form of repositioning charges.
10 Tips for Shippers to Reduce Repositioning Charges:
- Utilize Container Sharing Platforms: Container-sharing platforms connect shippers with other shippers who have empty containers in the desired region. This allows shippers to share containers. It also reduces the need for repositioning charges.
- Explore Backhauling Opportunities: Coordinate with suppliers or customers to arrange backhauling opportunities. Backhauling involves utilizing empty containers on return trips to transport goods, reducing the need for repositioning.
- Leverage Freight Consolidation Services: Consolidate smaller shipments into larger, more efficient shipments. This reduces the number of containers required and potentially eliminates repositioning charges.
- Negotiate Freight Agreements: Negotiate favorable terms with shipping companies or freight forwarders to secure lower repositioning charges or eliminate them for certain routes or shipment types.
- Utilize Inland Rail Services: Consider using inland rail services for long-distance shipments. Rail transport often has a more balanced flow of containers, reducing the likelihood of repositioning charges.
- Optimize Packaging and Loading: Optimize packaging and loading practices to maximize container utilization. This reduces the overall number of containers required and potentially eliminates repositioning needs.
- Explore Alternative Shipping Routes: Evaluate alternative shipping routes that may offer better container availability and reduce the likelihood of repositioning charges.
- Stay Informed about Market Conditions: Monitor market conditions and anticipate potential imbalances in container flows. This allows shippers to plan accordingly and proactively address repositioning concerns.
- Utilize Technology for Real-Time Visibility: Leverage real-time tracking technology to monitor container movements and identify potential repositioning needs early on. This allows for timely intervention and cost optimization.
- Collaborate with Industry Partners: Collaborate with industry partners to develop shared solutions for reducing repositioning charges. This could involve joint planning, shared infrastructure, or collective negotiations with shipping companies.
