Staxxon International: A Breakthrough Idea that Could Transform the Industry

 

The box shipping industry has long been accused of lacking innovation. With the obvious exception of advancements in IT, the container shipping industry is pretty much the same today as it was in its infancy in the early 1960’s. So when  a company like Staxxon International comes out with foldable container technology, the industry ought to take notice.

As reported in this space last year, Staxxon has patented technology that allows five containers to fit into the space of a single box. This week Staxxon announced production of its foldable container in conjunction with SeaBox Inc. in East Riverton, NJ.

According to the announcement, the first containers produced at SeaBox will be used for “Convention for Safe Container testing, field testing at marine terminals and non-commercial sea trials.

The fact that a reputable company like SeaBox has taken on the project can be construed as evidence of the commercial potential of Staxxon’s technology. Make no mistake, these are early state production and trials. There is still a long way to go. But, the industry is in desperate need of this kind of innovation. And here are some reasons why.

1) Anemic U.S. Economy.  Sluggish growth in the U.S. economy due to high unemployment is impacting consumer spending. This coupled with a weak housing market has impacted import growth. Fewer imports mean fewer containers available for exports.

2) Low U.S. dollar.  The positive side of a low U.S. dollar against other currencies is the rising level of exports. According to the Journal of Commerce Exports are up 11% this year against imports at 5.4%. Again, a rise in exports mean demand for containers.

3) Container production. At the lowest point of the recession in 2009, global container production was at about 350,000 containers against the usual 4,000,000 the previous year. In 2010, container manufacturers stepped up production but not nearly enough to compensate for the demand in the recovery. As a result container shortages were rampant, mostly due to the cost/time of moving them to profitable, demand areas.  The ratio of containers to shipments is about 1.9:1, against  3:1 prior to the recession.

4) Ultra Large Container Ships. It’s not rocket science. Larger ships in service tie up more containers. This year, the Asia-Europe trade has seen 13,000 TEU + ships delivered into service, with other “smaller” ships cascading to other trades. Given the current order book, the trend will continue.

5) Export Demand in land locked areas. Import containers are generally delivered to large cities, while exports commodities are generally sourced from less populated areas. As a result, many areas are deficit of containers during peak demand times, generally in the fall through to the spring.

With the general trend in the U.S. of slowing imports and surging exports, there are bound to be problems getting containers where they need to be. Shippers are reluctant to pick up the cost of empty repositioning due mostly to the marginal nature of the commodities business, leaving carriers to pick up the tab for empty repositioning or de-selecting the business altogether, and sending containers back to Asia for the head haul trade.

Successful commercial implementation Staxxon’s technology would provide a wide-sweeping solution to many problems of container repositioning and significantly reduce carrier’s costs. . Imagine moving five containers on a rail car for the price of one. Or loading a ship where a single lift moves five empty boxes.   

Indeed, this is an idea whose time has come.