White Paper: Slashing Emissions, Building Efficiency and Minimising Cost
The movement of goods across continents is the backbone of global trade and the route from China to the Middle East is among the fastest growing. While the scale of this trade is impressive, it also comes with significant inefficiencies and environmental cost.
This article examines the costing elements and carbon emissions generated when shipping a 40-foot container (“FEU”) on a round voyage from China to Medina, Saudi Arabia, shedding light on the economic and environmental impact of this essential global supply line.
It also analyzes how GenFlat collapsible containers, shipped together as a bundle of four, can save approximately US$6,450 and 2.5 metric tonnes of carbon per trip.
The Red Sea Express Journey
Shipping containers can travel extraordinarily long distances via container ships. The typical Asia-Middle East route involves several stages:
Shanghai to Jeddah CY/CY:
Containers are loaded in Chinese base ports, the likes of Shanghai or Shenzhen.
Container ships sail south through the South China Sea, past Singapore through the strait of Malacca, across the Indian Ocean, through the Arabian Sea, and then north to the Red Sea Coast.
Carbon emissions occur during vessel propulsion and while berthed, as these massive ships burn vast amounts of fossil fuels.
The cost of shipping a single 40-foot container for this portion of the journey is US$1,750.
Distribution and Inland Transport
Containers are unloaded at the Port of Jeddah and transported to distribution centers or warehouses across Saudi Arabia, including Medina.
This stage involves trucking, which also contributes to the total cost and carbon emissions.
Saudi Arabia to China (Empty Container Repositioning)
Empty containers, having served their purpose, are repositioned for their return journey back to China.
They are transported via truck or rail back to the Port of Jeddah to then be shipped back to China to be reloaded with goods. Though empty, each container requires truck transportation back to the port.
The return voyage to China mirrors the cost and emissions generated on the outbound leg of the journey, even though the empty containers are only shipping air.
Though less fuel is used when shipping empty containers than full containers, there is still a significant cost and environmental impact when shipping empties.
The Cost of the China/Saudi Arabia Container Roundtrip
The average cost to ship a 40-foot laden container from Shanghai to Jeddah is US$1,750. From Jeddah, the cost to ship the container inland is approximately US$550.
With an inland distribution cost of US$550 to Medina, the total cost of the container journey from Shanghai to Medina is approximately US$2,300. With the goods delivered, the container owner now has the problem of having multiple empty containers in Medina that need to be transported back to Jeddah and loaded onto an ocean shipping vessel back to China.
The costing elements for the return journey, although usually mitigated slightly still have an average cost of US$2,150 per FEU. The roundtrip cost for one container is approximately US$4,450.
The GenFlat Cost Advantage
The benefit of GenFlat collapsible shipping containers is their ability to significantly reduce repositioning costs.
As discussed, repositioning is a necessary but costly aspect of the shipping industry. Conventional containers, once emptied, occupy valuable space and require costly transportation back to their origin or base ports.
Once collapsed, four GenFlat containers can be stacked in the approximate space as one 40-foot high-cube container, reducing the repositioning costs of four containers by as much as 75%.
For example, the cost of a round voyage for four standard FEUs from Shanghai to Medina is approximately US$17,800, this drops to US$11,350 for four GenFlat containers. That is a cost saving of US$6,450 for a bundle of four containers for a single round voyage. If those four containers make eight roundtrips per year, the GenFlat saving is US$51,600, equating to an annual savings per container of US$12,900 per year.
The GenFlat Environmental Advantage
Shipping containers from China to the Middle East and back contributes significantly to global carbon emissions. The shipping industry faces increasing pressure to reduce its environmental impact. Estimating the carbon emissions from shipping containers involves several factors:
Fuel Consumption: Container ships typically run on heavy fuels, emitting significant CO2, sulfur oxides (SOx), and nitrogen oxides (NOx).
Distance and Route: The longer the distance, the higher the emissions. The specific route taken by the vessel also affects emissions.
Container Size: Larger containers carry more cargo but also contribute to greater emissions due to the heavier load.
Container Repositioning: The empty container’s journey back to China adds another layer of emissions.
Inland Transport: The emissions associated with trucking or other forms of inland transportation.
Efforts to reduce carbon emissions by transitioning to cleaner fuels and alternative propulsion vessels are positive developments in the shipping industry, though they require massive investments of money and time.
GenFlat’s reduction of carbon emissions is achieved by reducing the space required by empty containers. By stacking empty collapsed containers in bundles of four, shippers require fewer trucks, rail cars, and vessels to carry empty containers to their place of origin.
The carbon emissions emitted by laden container journeys from China to Medina are the same using GenFlat containers or standard containers. The emissions from repositioning trips back to China, however, can be reduced by up to 75% using GenFlat containers instead of standard containers.
Stacking and shipping four collapsed GenFlat containers from Medina to Shanghai REDUCES carbon emissions by 2.5 METRIC TONNES, compared to shipping four empty standard containers.
The Overall GenFlat Advantage
GenFlat containers represent a paradigm shift in container design and utilization. As discussed above, four GenFlat containers shipped together saves approximately US$6,450 and 2.5 metric tonnes of carbon per trip, while having little operational impact.
The GenFlat innovation offers several other compelling advantages that make them a valuable investment:
Space Optimization: One of the primary advantages of GenFlat containers is their ability to optimize space, especially at Ports and Container Yards. When empty or during return transport, these containers can be collapsed to ¼ of their size. This results in substantial cost savings and reduction in the space required for storage and transportation.
Durability: These containers are constructed with durable Corten steel, ensuring they withstand the rigors of the shipping industry. They are built to be stronger and more durable than standard containers.
Competitive Edge: By embracing GenFlat containers, shipping lines and other shippers can gain a competitive edge in an industry that increasingly values sustainability and efficiency. Such a move can enhance their reputation and attract environmentally conscious customers.
As the marine shipping industry seeks to address climate change, reduce emissions and reduce cost, stakeholders must continue to innovate and adopt innovative solutions to mitigate its environmental footprint while continuing to explore greater efficiencies in support of global trade.
GenFlat containers provide an economically and environmentally friendly solution to these pressing issues.