The encyclopedia · Engineering & Operations · Operational decision · 2008–2012
CSAV's ECO model balanced empty containers worldwide, saving $81 million.
Chilean shipper CSAV built a multicommodity optimization system to reposition and stock empty containers, with direct savings of $81 million.
Compañía Sud Americana de Vapores (CSAV)
the move
CSAV runs a fleet of about 700,000 containers and makes thousands of decisions a day; some regions pile up empties while others run short.
Working with the University of Chile, it built ECO, which uses a multicommodity multiperiod model to reposition empty containers and an inventory model to set safety stock, all fed by a hybrid forecasting system.
The use of ECO produced direct savings of $81 million, cut inventory stock by 50% and raised container turnover 60%, helping CSAV through the 2008 crisis.
why it works
- Container surpluses and deficits varied by region and time
- A multicommodity model moves empties where demand needs them
- Safety stock at each location covers demand uncertainty
- Measured: $81 million saved, 50% less inventory, 60% more turnover
what transfers
When a fleet of assets is distributed unevenly, a single multicommodity model that moves empty assets where they are needed beats every region managing its own stock.
what came after
ECO became CSAV's global way to run empty-container logistics and was recognized as a Franz Edelman finalist and a Chilean engineering award.
references
- Institute of Engineers awards Andrés Weintraub and Rafael Epstein for CSAV project
- A Strategic Empty Container Logistics Optimization in a Major Shipping Company
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