Container Inventory Management: Introducing the 3F Model

Container inventory imbalances (CII) can primarily be attributed to global trade imbalances that cause a substantial indirect cost in shipping. Therefore, it is imperative that carriers adopt highly efficient and effective container inventory management (CIM) systems to overcome the CII issues. This research intends to develop realistic guidelines for CIM that minimise CII costs. The components of the 3F model are chosen based on the rating scores given by the experts for 22 common CIM strategies followed by a standard filtration process. It ultimately comprises six strategies, namely: reduce import freight; reduce export freight; service agreements; synchronised budget; agile inventory; and export priority. These variables are rooted in three dimensions namely: freight, forecasting and flexibility. To identify the relative contribution by each component, this paper proposes a double weight allocation procedure for each strategy. The 3F model helps managers to think beyond traditional container reposition and increased profits.