Cargoshell pushes shipping industry to go green | Business| Economy and finance news from a German perspective | DW | 22.11.2010
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Cargoshell pushes shipping industry to go green

The shipping industry is a big producer of CO2 emissions, but Dutch company Cargoshell says it's found a way to be more environmentally friendly and cut costs at the same time.

A Cargoshell container

The future of shipping?

Shipping is a multi-billion euro industry that is expected to grow massively in the next decade. One of the main concerns of the industry in the current economic climate is not only how to reduce costs but also how to be more environmentally friendly. According to a 2008 UN report, shipping creates double the CO2 emissions of the aviation industry.

Dutch company Cargoshell thinks its new, foldable fiberglass cargo containers are the solution to both of these problems. The company claims they are an innovation compared to the steel shipping containers that have been the industry standard for over 50 years. Cargoshell CEO John Houtman said the unique folding design of the glass and resin containers make them perfect for cutting costs.

A foldable container

Cargoshell's containers are foldable, making them space-saving when empty

"About 25 percent of all shipments are empty containers," he said. "When you collapse an empty Cargoshell container, it is just a quarter of the normal size. So when you transport the containers, you can pile many more empty containers onto one shipment, and that's better for the environment."

However, Cargoshell containers are currently three times more expensive to manufacture than their steel equivalents, raising doubts that shipping operators will be willing to make the initial investment in order to green their business.

"I think the product has potential, but if the price is too high, then it raises questions about getting it onto the market," said Sander Sprengers, a general manager at CMA CGM, the world's third-biggest container shipping group.

Price barrier a concern

"Another concern is that the maintenance and repair costs may also be high, and that the extra handling costs for the manpower needed to fold the containers up and down could be higher than today's type of operation," Sprengers said.

A completely folded Cargoshell container

Completely folded, a Cargoshell container can lie flat

Houtman said his company is aware of the concerns but added they would be minimized if Cargoshell containers were to go into large-scale production. Shipping operators should also bear long-term savings in mind, he added.

"If you look at the total transporter chain, the cost-saving potential is tremendous," Houtman said. "A single ship might go from China to Rotterdam with 8,000 containers. Our containers weigh 400 kilograms less than metal ones, so in one transport, you get fuel savings of 526,000 euros, not to mention the CO2 savings."

Cargoshell containers offer a further benefit: they enable the use of radio signals to track the containers' progress, something that is currently difficult to do with the steel model.

"Composite is radio neutral - we can track and trace each container from all over the world," said Houtman. "We can be informed of the status of each container, whether it's open or closed, what the inside temperature is. All of this information can be sent to the company."

Developers say the Cargoshell containers will have a lifespan of 90 years, but it's the next decade that they're focusing on at the moment. The design needs to pass a series of international standard tests to make sure it has the strength and durability of the conventional steel containers. The results should be known later this year.

Company hoping for four percent share

If it gets the green light, Cargoshell hopes to have a million containers in use by 2020, taking a 4 percent share of the market.

Steel containers on a ship

Shipping operators are used to working with steel containers

"I think four percent is quite a lot," said Bart Kuipers, an economist based at Rotterdam's Erasmus University. "Much depends on how serious the shipping companies are about making their operations greener."

Kuipers thinks there might be other niche markets for the foldable containers - in the aid and military logistics markets, for example.

"Think of the problems with a country like Afghanistan, which has no ports, and very difficult roads across mountain landscape," Kuipers said. "I think Cargoshell is a very attractive proposition for these kinds of niche markets."

Cargoshell launched its revolutionary containers eight months ago, but the first batch of foldable containers has yet to be produced. Still, Houtman is encouraged by the initial backing he's received from major shipping companies, and a high degree of interest in the product from around the world.

"We know that some countries, such as Australia and Belgium, are very interested in the product, and we have received lots of queries from China and India," Houtman said.

Author: Dave Goodman (dc)
Editor: Sam Edmonds

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