How NileDutch took empty container planning off spreadsheets
NileDutch moved global empty container planning off spreadsheets and onto a daily AI plan for the whole network, 10-12 weeks ahead. The Rotterdam-based carrier was acquired by Hapag-Lloyd in the second half of 2021, after this project was delivered.
The plan worked. The cost drivers were invisible.
Repositioning empty containers costs the shipping industry between 13 and 17 billion euro a year – up to 8% of a line operating cost, according to Boston Consulting Group. Add storage and maintenance and Transmetrics puts the total cost of empty assets above 12% of operating cost.
NileDutch managed this well by hand, but it took significant time from the Global Empty Repositioning team to keep the spreadsheets current. Two structural problems remained. Complex loading, repositioning, storage and repair decisions were made in Excel, on the experience of the team. And because logistics managed repositioning globally while procurement controlled vendor costs, the company knew what it paid each vendor in each location, but not what was driving the spend.
One daily plan for the entire network.
Transmetrics integrated over an enterprise-grade VPN and took in NileDutch shipping history from 2011 to 2018 – tens of millions of records covering bookings, booking routings, container scans, ship schedules and reference data. Cleansing and enrichment resolved the conflicts and redundancy across those tables to establish which container travelled on which ship between every two ports.
On that foundation, the forecasting module produces daily rolling demand forecasts for the next 10-12 weeks, replacing a master forecast assembled from agent estimates. The optimisation module then builds the global plan for repositioning, storage, repair and maintenance across the whole network at the lowest available cost.
Double-digit cost reduction, several thousand TEU released.
Every day, in a few clicks, an optimised empty container plan is recalculated for the entire company 10-12 weeks ahead. NileDutch benchmarked the system against its own dispatchers over three months and reported that the benefits were better than initially expected.
Total costs for managing empty containers fell by a double-digit percentage, with storage costs improving most sharply. The container fleet shrank by several thousand TEU – also a double-digit percentage – released through off-hire of leased equipment and profitable sale of owned containers. Multi-million cost items left Excel, every system now feeds one version of the truth, and teams across the world plan in the same place.
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