Can Non-Operating Reefer Containers Be a Solution For Empty Container Repositioning Problem?

The problem of empty container repositioning poses a significant challenge in the international container transportation industry.

This problem has a profound impact on logistics processes, cost-effectiveness, and environmental sustainability, making efficient management of empty containers crucial for supply chain continuity. This article aims to investigate the use of non-operating reefer (NOR) containers as a solution to the empty container repositioning problem.

Non-operating reefer containers are the same size as 40-foot reefer containers. Electric components, footwear & fabric, books & paper, and beverages & foodstuff are the most common commodities that are carried in NOR containers. Hazardous cargoes and scraps and metals are forbidden to be loaded in this type of container. This container is used like dry containers but with freezing ability. The purpose of this container to provide a solution for container repositioning with lower costs and carbon emissions.

The empty container repositioning problem refers to the challenge of managing the distribution and positioning of empty shipping containers to efficiently meet global trade demands. This issue causes imbalances in container availability in different regions. Containers often accumulate in regions with higher import volumes, while a lack of containers may occur in regions with higher export volumes. This imbalance affects supply chains, leading to increased costs to businesses. Also, wrong container placement causes inefficient resource usage. 

Logistics costs are also a result of the empty container placement problem. Businesses may face detention costs if containers are not quickly available at desired locations. This increases transportation costs and reduces profitability. 

A shortage or imbalance of empty containers can lead to delays and disruptions in global trade.

Importers and exporters may experience delays in transporting goods due to container availability issues, negatively impacting production schedules, customer satisfaction and overall supply chain reliability. 

The empty container repositioning problem also causes environmental impacts. Inefficient container placement and transporting containers long distances unnecessarily increases carbon emissions by fuel consumption. In addition, improper disposal or storage of excess containers can lead to environmental pollution, waste management challenges and creates negative effects in terms of both economic and environmental sustainability.

To address this issue, container shipping companies often provide customers with the option of using empty refrigerated containers, known as non-operating reefers (NOR), for transporting dry cargo. By repositioning these reefer containers to locations where they are in high demand, carriers can maintain a better balance in container availability, eliminating the need to transfer empty refrigerated containers and minimizing revenue loss. Non-operating reefer services are typically offered to customers at a reduced rate, offering a cost-effective solution, while also generating additional revenue for the shipping carriers. 

However, refrigerated containers, or reefer containers, have limited cargo capacity compared to standard dry containers.

This is due to the space occupied by refrigeration equipment and insulation, resulting in reduced storage space. Additionally, reefer containers have smaller door dimensions compared to dry containers. Moreover, not all types of dry cargo are suitable for transportation in nonoperating reefers. Carriers only allow cargoes that won’t damage the equipment or insulation materials inside the NOR containers. 

On the other hand, load weight is also a limiting factor, typically with a maximum allowable weight of 6,600 pounds (3000 KG/M). Hazardous chemicals, heavy machinery with sharp parts, oversized cargo, fertilizers, batteries, strong-smelling items, and similar goods are prohibited from being transported in non-operating reefers. NOR containers are commonly used for transporting food and beverages, textiles, toys, and similar items.

In conclusion, inefficient management of empty containers results in economic losses for ports, impacts low value-added product exports, and causes capacity loss and increased costs. While NOR containers offer advantages such as discounted freight and priority in booking and loading, they may not provide a complete solution to the empty container return problem due to limitations and handling risks.