At age 18 I joined the Australian Regular Army, commencing my military career at the Royal Military College Duntroon. By 19 I had graduated, been commissioned as a Lieutenant and was commanding a platoon. Not long after, I was on my first operational deployment to East Timor. It was the start of the highest operational tempo for the Australian Defence Force since the Vietnam War, and whilst serving I ended up deploying to a number of places, quickly developing as a professional soldier because what we were doing was not training anymore, it was real-time. It was one of the greatest times in my life.
It was the Army that dictated my career path. When I graduated Royal Military College Duntroon I originally requested to be assigned to Signals Corps, but received my second choice, being placed into the Royal Australian Transport Corps. Whilst initially disappointed, I ended up having a fantastic career in transport, eventually even doing my Master’s degree in Management Logistics. Fate took its path and since then I’ve always enjoyed working in the logistics/supply chain field.
Our goal at CEC Systems is to ultimately generate real savings for the shipping lines, container owners, and leasing agents and thereby generate flow on effects through the value chain. Twenty percent of port space … is empty containers.
The reality was, once they came into country, there was no way they were getting back out or at least, not from a reasonable economic point of view. From both a life and a cost perspective, it was cheaper and easier to simply leave the containers there. That approach led to a huge accumulation of containers at bases, which often did not have a lot of space to begin with.
I realized that there was a definite problem to solve, and I was encouraged to build a better understanding of how big the problem was within the global supply chain. For instance, there are approximately 38 million containers in the world right now. Of that 38 million, at any one time, about 20% of the fleet is empty due to the global trade imbalance. There are countries that are importing far more than they’re exporting and vice versa. Australia and China is a good example. For every 100 containers coming into Australia, our export capacity is only about 35%.
The reality is that in many cases, it can be cheaper and easier for a shipping lines to just leave containers in certain areas and backload when the opportunity arises. Eventually however, all containers have to move because there are peaks and troughs in global production. For example, in the months leading up to Christmas and Chinese New Year, more containers are needed in China for all the manufactured goods. According the United Nations, the physical act of storing, handling, and redistributing empty containers is currently costing the shipping and logistics industries over USD $30.1 billion a year in loss.
Once I got a sense of the global problem and challenges, I knew there had to be a better solution, particularly as global trade is predominantly a trade in and out of containers. This is when CEC Systems came about. Our company is a developer of industrial technology solutions for the shipping and logistics industries.
Our goal at CEC Systems is to ultimately generate real savings for the shipping lines, container owners, and leasing agents and thereby generate flow on effects through the value chain. Twenty percent of port space (port dependent), for example, is empty containers. To reduce that through collapsible containers where you can move and store 4-to-1 containers creates a massive saving, effectively giving the port 15% back for use, ultimately deferring port expansions for a significant period.
Our offerings are essentially physical products. Using our SEAS design philosophy, we develop solutions that are Simple, Efficient, Affordable and Safe; and whilst the industry is pushing to digitalize their systems, we are clear that we are not an IT developer, but we do seek to incorporate digital solutions through collaborative partnerships into our systems. At this time, we are working with other companies to bring out an integrated tracking system for containers and although there are plenty of solutions on the market, what we are trying to do is make containers incredibly smart through IoT.
The shipping industry is a very conservative industry that for a long time has been reluctant to change – “this was the way we have always done things and this is the way I’m going to continue doing things.” I look at what CEC Systems is doing as an evolution not a revolution. As a company, we are not seeking to disrupt the industry; we are seeking to evolve the industry and generate new efficiencies.
At this time, we are working with other companies to bring out an integrated tracking system for containers and although there are plenty of solutions on the market, what we are trying to do is make containers incredibly smart through IoT
To date, when we show industry veterans our solutions, particularly COLLAPSECON collapsing, they are inspired by the dynamic nature and their whole perception of collapsible containers changes. They become quite excited about it because it’s so different. Additionally, as we are not fundamentally asking them to change the way they do business. We’re offering better solutions to how they do business, integrating new capabilities that generate savings, and operational efficiencies.
It’s amazing how a simple solution can have so many different impacts – economic, environmental, operational – throughout the value chain.
By its very nature, CEC Systems is a truly global company. Whilst we develop technology in Australia we’ve also opened an office in Singapore, to be close to decision makers in the shipping and logistics industry, as well as our manufacturing.
By 2060, to match global trade, the world will need approximately 76 million containers which basically doubles the fleet over the next 30-40 years. Despite the huge market potential, as a company we are realistic in our expectations. We are not aiming to capture 20% of the container market, we’re not even trying to capture 1% of the market; in time we are aiming to capture 0.5% of annual production, but that’s still hundreds of thousands of units per year.
Our mission is to evolve the way in which the industry operates. It is a multi-decade slow burn, but within a global industry and with very large numbers involved, patience is sometimes required.