Reimagine efficiency with reduction in transportation costs

The background

Modern, sustainable, practical, and ready-to-assemble is how one would define the entire catalogue of our Swedish customer – the world’s largest furniture manufacturer. Ever since its founding in the 1940s, the company has been laser-focused on making affordable products for their customers. These values, combined with their DIY designs and environment-friendly policies, make them a household name in over 50 countries.

The challenge

In China, Maersk and Sealand - a Maersk company have been handling their import shipments, whereas the export shipments are managed solely by Maersk. As the customer focuses heavily on the affordability of their products, they keep a sharp eye on excess operational costs. A case of which had emerged between their DC in Shanghai and the port.

Imports

Whenever an import shipment arrived at the port, they had to pick the laden container from the terminal, move it to the DC, unload and return it back to the terminal or port.

Exports

Similarly, in the case of exports, they had to pick empty containers from the port or terminal, move them to DC for loading, and then take them back to the terminal or port.

Moving empty containers back and forth resulted in substantial transportation costs, reduction in usable time slots at the Shanghai DC, and excessive carbon emissions. None of which was acceptable to the customer.

The solution

Due to the distance between their factory, DC and port, our customer was losing a lot of time and money in returning and picking up empty containers. Since we were already handling their imports and exports, our team formulated an empty container triangulation system to eliminate unnecessary vehicle movement.

How Empty Container Triangulation works?

Triangulation helps in optimising empty container utilisation. In the case of our customer, we made sure that each empty container was reloaded soon after unloading, with either import or export shipment, depending on the unloading point.

The result

The customer was able to enhance the efficiency of their Shanghai DC and reduce transportation costs by improving container utilisation. In the process, they realised improvements in several other areas too.

• Container re-utilisation increased to 67%
• They were able to move shipments more frequently by reducing unnecessary trips between the DC and the port
• Carbon emissions had reduced by 40%

In the next phase, the solution will be implemented in more locations. The expansion will be helpful for the customer’s suppliers too; especially those from the Yangtze Rive delta – Kunshan, Suzhou, Jiaxing and more.