A Strategic Empty Container Logistics Optimization in a Major Shipping Company (CSAV)
Abstract: Compañía Sud Americana de Vapores (CSAV) is the sixth largest shipping company in the world. CSAV developed a system (ECO), to manage the problem of inventories and imbalances of empty containers, since some regions are net importers of empty containers (e.g. China), while others are net exporters (e.g. Saudi Arabia). A multi-commodity, multi-period model manages the repositioning problem, while an inventory model determines safety stocks required at each location used by the firm to insure high service level despite uncertainties. A hybrid forecasting system was developed to support both the inventory and the network flow model. Major improvements in data gathering, communications in real time, and automation of data handling were needed to feed the models. A collaborative web-based optimization framework allowed agents from different zones to interact in decision making. The use of ECO led to direct savings of $75 million for CSAV, with a reduction in inventory stocks of 50% and an increase in container turnover of 60%.