Mar.13, 2012

Nissan Motor boosting container filling rate

Nissan Motor Co. is stepping up its drive to reduce logistics costs. By enhancing the filling rate of production parts that are loaded in each container, the company has successfully raised the ratio by more than 10% compared to the filling rate recorded two years earlier, when the program started. Production parts exported from Japan totaled about 86,000 container units (40-foot and 20-foot containers combined) in fiscal 2010 (April 2010-March 2011). There might have been negative factors that came into play, such as the Great East Japan Earthquake, the flooding in Thailand and the high yen, but with the expansion in demand centering on the emerging economies and other positive elements, the company still projects that its exports will grow to a little less than 100,000 units in fiscal 2011.

Production parts shipped by Nissan to overseas destinations totaled 86,000 units in fiscal 2010, 90% of which were hauled through 40-foot containers. Of this volume 60,500 units, accounting for about 70% of the total shipments, were loaded at Yokohama port. As for the rest, 20,400 units (accounting for around 24% of the total) were loaded in Kyushu and a little more than 5,000 units were loaded in Chubu.

The ratio of containers that Nissan shipped out from Kyushu's Moji port (the other port is Hakata port) has been climbing in recent years. Virtually all the parts bound for Nissan's factory in St. Petersburg, Russia are stuffed in containers at Kitakyushu Kanda and then loaded onto ships at Kyushu port. The company is expanding the local procurement of production parts in Russia, but the production of cars with Nissan Kyushu serving as the mother base is currently Nissan's main thrust, so shipments from Japan will remain large in volume, along with the volume of containers used for transport.

Nissan is also moving to position its production and shipping bases at adjacent locations, as evidenced in the transfer to Shimizu, from Yokohama, of the shipment of transmission systems to some of its factories beginning December 2010. The said project, which will become the first full-fledged regional port, will take more than five years to get a foothold, with containers loaded onto ships at Shimizu port already exceeding 3,000 units as of the end of January this year.

However, Kiyoshi Onoe, general manager of Nissan's Parts Logistics Dept. in the SCM headquarters, claimed that, "It is highly probable that the ratio of cargoes loaded at Kyushu port will be curtailed to about 40% at the most."

Nissan has been exerting utmost effort toward enhancing the container filling rate under its program to reduce logistics costs. In line with this, it kicked off the Challenge 60 initiative in April 2010. Under this program, the company embarked on various steps toward boosting the filling rate, from the modification of returnable racks, up to the development of packing containers that comply with the high-cube design that has become the mainstream. Prior to the start of the campaign, the volume of parts loaded per 40-foot container had been 53-54 sqm in terms of capacity. The Challenge 60 initiative is aimed at raising that volume to 60 sqm For fiscal 2011, such target will be further increased, with Nissan mounting the so-called Challenge 65 campaign that targets the enhancement of the container filling rate. As of January this year, the company has increased the packing volume per container to more than 60 sqm and improved the filling rate by more than 10% compared to the rate recorded prior to the commencement of the campaign. And the company's drive is still going.

Enhancing the filling rate will have enormous effects on cost reduction. Assuming that 100,000 marine containers will be shipped to overseas destinations, if the filling rate can be increased by 10%, then it would translate to a reduction in containers by as much as 10,000 units.

Apart from the above, Nissan is also setting its eyes on the weight regulations applied to marine containers in a bid to further cut costs. In the case of a 40-footer, the conventional biaxial chassis can only load up to about 20 tons (cargo weight), but with a three-axis chassis, the loading capacity can be pushed to more than 26 tons. With this in mind, the company is striving to maximize the use of three-axis chassis between the vanning factories and the ports while taking into account the regulations overseas. Further, Onoe commented that, "We are able to mount these activities aimed at enhancing the filling rate thanks to the cooperation extended by the transport companies."

Search for Top 5 Countries:
Enter HS Code (i.e. 1234567890)
FREE Access to USA Trade Data
Power by Zepol