Johannes Schlingmeier and Christian Roeloffs launched xChange in Hamburg, Germany, in November 2015, as they wanted to tackle the issue of repositioning containers by digitizing the process and allowing for carriers and logistics companies to interchange their empty boxes with the aim of cutting operating costs and the environmental footprint.
The cost of repositioning empty containers amounts to $15-20 billion per year industry-wide, impacting container carriers, leasing companies and other logistics companies such as non-vessel owning common carriers (NVOCC) and container traders, according to Johannes Schlingmeier.
As part of his doctoral thesis about empty container repositioning, Johannes Schlingmeier analyzed equipment data covering 56% of the industries global equipment: More than 200 million containers are being moved every year with one-third being moved empty. As such, for a typical carrier, repositioning costs represent 5 to 8 percent of total operating costs.
It all started with an excel sheet
“It all started with an excel sheet collecting deficits and surpluses of equipment in different locations – the list exploded quickly via word of mouth among companies involved in container shipping!” Christian Roeloffs said.
Today xChange is the one-stop-shop for one-way containers and SOCs:
Browse the market: Using xChanges smart search or their news feed you easily gain market transparency and find containers to supply/ use in more than 2500 locations worldwide
Reduce your effort: xChange implemented tracking and tracking alerts as well as an easy online negotiation process and API/EDI integrations to save you long hours in the back-office
Be safe and secure: Through a continuous vetting process, company profiles and a standardized contractual framework xChange created a community based on trust
However, that was a long journey for xChange, Johannes Schlingmeier Remembers: „It took us about 2 years to be taken seriously and the comments at e.g. trade fairs were quite literally: Hey, you guys are still around!? This must be worthwhile at last… can we have a chat? “
Now xChange has more than 200 members and the majority of the top 10 leasing companies and top 20 container liners on board, which provides a great liquidity basis. Moving forward the biggest growth potential is seen in NVOCCs and traders who use/supply containers on xChange.
Florian Frese (Head of Marketing): “Currently we see a few thousand transactions per week with ~20% month-on-month growth”
Benefits of interchanging containers
The average savings per interchanged container range between USD 200-400, arising mainly from the avoidance of expenses related to land transportation and the use of terminals. This corresponds to potential annual savings (per carrier) of approximately USD 350 million to USD 700 million. Scaling up this impact to the top 100 carriers would promote annual savings of up to USD 4.5 billion, according to The Boston Consulting Group (“Think outside your boxes”, 2015).
In addition, the interchanging of containers helps reduce CO2 emissions from shipping as moving an empty container between Europe and China produces 1.9 kilos of CO2.
Especially for users of containers xChange increases flexibility in their bookings – giving NVOCCs/ Freight Forwarders a wide range of SOCs and one-way opportunities.
Whereas xChange broadens purchase options through additional port-to-port one-ways while avoiding middleman and finding the best source for a move for suppliers of containers.
Competition and the future of xChange
xChange covers more than 2500 port locations and sees most activity in the belt between Europe, the Middle East/ India and South East Asia.
„Other hotspots of course are newbuilt containers ex China into North America, ANZ and Europe. We see increasing traffic on stretches such as ex China to the US, ex China to Australia/ New Zealand and in South Africa,” Roeloffs said.
Speaking about the competitors and risks, Schlingmeier said that when it comes to competition, there were “no real digital competitors to what we do … as a platform we’re unique”.
“However, there are of course competitive products which are (a) brokers who match container supply and demand manually and without creating transparency and (b) quite simply personal contacts between market participants.”
“As for the risks, cyber risks are certainly high up on the list but we think the biggest risk for us is losing neutrality and thereby our clients trust. Without trust, we will not get any updated information anymore and could close up shop.”
xChanges will remain focused on the container in the future and will facilitate collaboration between market participates along the entire transportation and logistics value chain. That means increased system integration through API/ EDI but also extending service offering to e.g. container resale or slot-booking.
You can learn more on https://container-xchange.com/public/index.html.
