Logistic Optimization in a Major

Shipping Company (CSAV)

1. Cost savings for CSAV

From the case study analysis it is clear that, most of the business operations of CSAV are
dependent on container fleet, as it is proved to be second optimized company in terms of cost
savings and vessel fuel. It is given over the review that, empty container logistics will save the
cost for CSAV and this due to the fact that, operational costs are reduced due to the impact of
cargo container cycle management strategies. As a general process if the container is filled with
the respective products at the destination, it is again sent back for the procurement routines and
thus the overall transshipment are charged along with the move of the container till it reaches the
respective destination. Now the container is transported to the consignee and once it is emptied it
is again sent to nearest CSAV port, where the respective maintenance activities are held. Thus
from the entire process it is clear that, the container is moved couple of time with the vessel and
thus the operational costs are more when compared to the scenario, when it is moved as an empty
vessel and thus the overall costs can be saved and optimized as well. Even the risk of imbalance,
uncertainty and information sharing is also reduced and thus this can be considered as the
optimized solution for CSAV.

2. Quality benefits with empty container movement

Apart from the cost benefits and optimization, there are few quality benefits for CSAV while
moving the empty container over the general logistics management. Information sharing and
banding with the third parties will be reduced and thus the logistic accountancy aspects can be
done in a more secure manner. As CSAV processes include 400000 containers maintain the
information sharing in a secure manner is always required as a part of quality control over the
company. Decision making strategies can be well coordinated that were made at local level rather
than involving third party suppliers or logistics as with the empty container the corresponding
problems associated can be resolved at this level. By moving the empty container over multiple

locations will enhance the coordination in decision making and thus enhances the quality control
over shipment and logistics management of CSAV.

3. Benefits with forecasting model

Forecasting model implemented by CSAV in the process of adopting the required solution for the
empty container problem is proved to be beneficial in many aspects. Empty Container Logistic
Optimization (ECO) is the methodology adopted by CSAV to compromise the forecasting mode,
where the required data is gathered and analyzed over the respective regional offices via the web
interface and thus the ease of access is achieved in this context, where maintenance has also
become simple with the multi commodity (MC) network flow as well. Based on the actual
container demand, required space can be created with the respective methodology based on the
information available against the implementation of forecasting models. MC network flow model
also contributes to the safety stocks and feeds movement and is one of the key benefits with the
forecasting model implemented by CSAV.

4. Empty Container problem solution adopted by other

companies

Empty containers are one of the substantial problems for most of the companies and the solution
adopted by them varies based on the operational capabilities. When the case with Rotterdam port
is considered, it followed the data driven approaches based on the level of information gathered
from multiple sources, where the top priority in this context is given to the data accuracy and
guarantee by the company. Empty container reposition strategies adopted are estimated on the
current day logistics and support from third party vendors, where CSAV never strived on the data
of third party and thus proved to be the secured and quality measure followed by it.

5. Cost reduction system

Cost reduction is always important to optimize the resource utilization and improve the revenues
for any organization. Apart from the shipping logistics issues, similar problem can be considered
over software development and deployment level. When the software is ready for release and
about to deploy, all the quality issues are pre-estimated and thus with the proper feedback
control, most of the bugs can be resolved prior to the installation on production server. If the
similar problems arise once the software is deployed on the application server, changing a minor
aspect of the software will cost a lost and in some cases it leads to entire system crash. Thus the
empty container problem with logistics can be applied to this scenario, where the direct
interaction clients will be reduced and based on the internal audit, all the possible post
production bugs can fixed before deploying the software at production site. With this
methodology, overall performance of the software can be optimized, while the cost of
maintenance is also reduced a lot.