Make Port Dray Street-turns Mainstream to Reduce Supply Chain Costs
Shipping containers used in the import and export process are the building blocks of global trade. These same containers are also one of the most underutilized assets in the supply chain.
Empty container moves cost the industry over $10 billion (USD), annually. One highly inefficient part of the supply chain is container usage inland. In between an expensive ocean move and a high-cost domestic transport is a short, relatively inexpensive, port drayage movement. This port drayage move is incredibly complex and ripe with opportunity for supply chain managers to utilize technology to reduce total cost.
An international port drayage move involves multiple stakeholders—ports, steamship lines, customs, truckers, container owners, chassis owners, and shippers—that all have to be on the same page to get the product successfully picked up and delivered. Because of the multiple stakeholders, there is a lack of transparency and little automation, which creates inherent waste in the supply chain.
One problem is trucks deliver full containers to import customers and, once emptied, the containers are returned empty to the port, container yard, or ramp. The same container is then dispatched, again empty, to an export customer to load and return it to the port for a second time. This increases the transportation, storage, handling, and driver costs.
street-Turns Spell supply chain savings
The vast majority of port transport moves for both imports and exports are only loaded 50 percent of the time. When you can pair an import transport move with an export transport move inland, without returning empty to the port, this is a matchback (street-turn or triangulation). When street-turns happen, everyone wins. Truckers have more revenue-generating miles, equipment owners increase the container and chassis efficiencies, and shippers pay less than they would if the container returns to the port empty.
The industry has struggled with how to execute optimal street-turns for decades. Here are just a few reasons why companies haven’t been successful in optimizing street-turns:
- No single party has all the pieces of the street-turn puzzle.
- Parties with an import container do not know where export bookings are located.
- Parties with an export do not know where the import container supply is.
- Steamship and rail lines lose visibility to merchant haulage freight on their controlled containers.
- Container size and type, chassis, rate negotiations, trucker interchanges, and steamship line reuse approval further complicates street-turns.
- Internal and closed solutions have limitations; these systems do not contain all the market data necessary to evaluate optimal solutions.
The list goes on and on. And, while there has been significant progress innovating other areas of the supply chain, the ability to execute optimal street-turns has been overlooked. Most companies still rely on spreadsheets, rolodexes, and other time-consuming procedures to identify and execute street-turns.
With the advancement of technologies, companies can now realize millions of dollars in street-turn savings. Each street-turn saves the industry more than $400, removes trucks from congested highways, and eliminates harmful emissions.
Matchback software applies each company’s unique and specific business rules, then runs scenarios through a patent-pending optimization algorithm to quickly return optimal matchbacks. The software automates and simplifies street-turns through a neutral industry platform. One of the unique aspects of the software is planner guidance and the ability to collaborate with the industry and within logistics ecosystems to plan, optimize, and communicate street-turns.
Here are just a few benefits of optimizing the matchback process:
- Reduce transportation costs by 20-30 percent
- Increase trucker loaded ratio from 50 percent to over 80 percent
- Eliminate days of assets inland, improving container and chassis efficiency up to 20 percent
- Reduce the need for additional drivers
- Reduce emissions by more than 30 percent
When every supply chain dollar matters, driving matchbacks mainstream makes a huge impact on the bottom line.