Reducing container inventory management cost: the smart use of Internet of Things (IoT)

Abstract

Since shipping derives its demand from international trading, the quantity of containers imported and exported to a country rarely match. As a result, shipping lines (SL) incur an additional cost: namely, the empty container reposition cost. This refers to either the export of excess containers to another country where they are needed or import of empty containers from a port where they are in abundance. Given that Internet of things (IoT) is gaining momentum, this paper proposes a method to enhance the effectiveness and efficiency of container inventory management (CIM) using IoT. The specific CIM tool to which the paper refers is the virtual container yard (VCY): an online tool that follows the fundamentals of collaboration between L). It operates through an algorithm to exchange containers between SLs. The paper examines the process of the VCY and ascertain how IoT could improve its ability to reduce CIM cost while improving service quality. It is identified that IoT could play a key role in identifying potential SLs for exchange, in determining the quantity of containers based on type, size, and other factors, and in exploring port pair option for the most economical exchange.