Cost-effectively filling shipping containers

The effects of COVID-19 on global supply chains hit the shipping industry hard, with displaced containers blocking ports and causing global shortages. This had a knock-on effect on the cost of international shipping, with container prices surging in 2021 due to limited availability and increased demand.

While costs reduced somewhat in 2023, global events have seen them soar in 2024, peaking in July. The Drewry World Container Index shows that prices are falling again, but are still 180% more than the average pre-pandemic rate.  

What’s causing shipping rates to increase?

The price increases can mainly be attributed to the war in the Middle East. The risk of attacks on cargo ships has meant ocean freight companies have rerouted ships to longer, safer routes that avoid the Red Sea. Shipping from Asia to NW Europe via the Cape of Good Hope is adds an extra $932,905 USD per voyage while increasing transit time from 16 days to 32 days according to a report by LSEG Shipping Research.

Longer journeys also impact the availability of ships, which puts pressure on their demand, increasing their cost.  

Making the most of every shipping container

With the price of containers and shipping so high, making every shipment of goods count is critical. This means ensuring you never ship half-full containers or fill up with items that are not business-critical.

One of our customers told us that due to four different surcharges placed on LCL (Less than Container Load) shipments, it’s more cost-effective to fill a 40-foot shipping container. The challenge is filling the container with items that have demand and you’re confident you will sell or need in upcoming production runs.

The benefits of filling shipping containers with the right stock

Filling shipping containers with the right stock can bring cost and efficiency savings.

• Ordering the right stock items can save you money. Your business will benefit from keeping only the items you need in stock. This way, you won’t tie up cash in extra stock or items that may not sell.
• Having the right stock in place improves stock availability and reduces the risk of stockouts. This provides a better customer experience by fulfilling orders on time and in full (OTIF).
• Optimizing the space in every container could lead to fewer shipments in the long run. This reduces your carbon footprint and improves your bottom line.

So, how do you know what items you need and which will be the most beneficial to have in your warehouse? Order fill-up calculations help you fill shipping containers, and you can do these calculations manually or use software.

Manual shipping container order fill-up calculations

When a container isn’t full, adding more of the same items or more of your fastest-moving items is tempting. However, this is a trap! When you come to your next order, because you’ve already over-ordered a bulk of your high-demand items, you risk not filling the container again…and again…and again. You’ll be stuck in a constant cycle of topping up with your fastest-selling items rather than ordering naturally.

Instead of fixing the problem, you’ll create a recurring problem of potentially running out of stock of items you need, so you’ll be trying to fill containers more frequently. It makes more sense to look at your upcoming demand and add these stock items instead.

Calculating future stock levels and demand forecasts manually can be time-consuming. You need to align your forecasts for upcoming periods and create order schedules.

If your inventory management and order fulfillment strategies involve rolling average forecasts that rely on historical data, they won’t consider trends and items with seasonal demand, meaning they won’t be accurate. If you use spreadsheets to manage inventory, your data might be outdated. This can lead to ordering the wrong stock. The wrong stock could lead to stockouts of some items, while others could sit on the shelves for months. You’ll tie up much-needed capital and risk items becoming dead stock.

As the calculations won’t be quick, this can delay the time it takes to place your order. The longer you take to place the container order, the more chance you will lose your spot, incur further delays and risk stockouts.

Automated shipping container order fill-up calculations

Automated inventory optimization software like EazyStock helps save time. It uses order fill-up functionality to reduce the pain of manual calculations.

When a container is below capacity, you can ask EazyStock to recommend items from the same supplier with upcoming demand and prioritize the most needed stock. EazyStock will look at upcoming forecast periods and create an order schedule that considers trends and scheduled promotions. The schedule will also account for supplier shutdowns and seasonality to fill containers. This avoids the need for guesswork or selecting items at random. This way, you’re ordering stock you know you will soon need instead of items that could lead to excess stock levels or stockouts.

You can use the order fill-up functionality to set targets for minimum value, number of units or maximum weight. You can fill up your order in a few clicks by automating the process. You reduce costs and have time to focus on other areas of stock management.

Find out more

To understand more about how EazyStock can help you fill your shipping containers cost-effectively, talk to one of our experts.