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The Container Management Quandary

Containerization of cargo has been instrumental in increasing supply-chain velocity in both the military and commercial sectors. Although transload efficiency has increased exponentially since containerization was introduced more than 5 decades ago, the current management processes and procedures have created a near-crisis for logisticians in the U.S. Central Command (CENTCOM) area of operations.

The U.S. military has become dependent on the greatly enhanced transportation efficiency offered by containerization. Army logisticians, however, are reluctant to acknowledge that the fluid and sometimes unpredictable nature of land warfare makes container management, accountability, and tracking problematic. Logistics managers must realize that if they fail to make changes to the current container management system, a container shortage may be imminent.

To maintain the current level of sustainment efficiency within the CENTCOM area of operations, some critical changes must be made to the container management system. If implemented effectively, these changes could also significantly reduce the costs of replacing thousands of “lost” containers.

History of Containerization

In 1959, the commercial shipping industry was loading and unloading an average of 0.627 tons of cargo per man-hour, according to Matson research. By 1976, with containerized shipping well-established, that figure skyrocketed to 4,234 tons per man-hour. The exponential gains in container management efficiency during the 1960s and 1970s did not go unnoticed by the U.S. military. The capability of moving more cargo farther and faster made perfect sense to the military, which had become more involved in sustaining global engagements.

By the time the United States became involved in the Vietnam War, containerization had become an extensively used logistics method of operation. Combined with the development of automated supply-ordering systems, containerization of cargo accelerated the movement of supplies through the logistics pipeline from continental United States installations and depots to overseas units and depots.

In 1965, the Army and Air Force jointly owned almost 200,000 containers. Every major Army unit moving into Vietnam carried its accompanying spare parts and supplies in containers. The demand for containers increased as the conflict escalated, and eventually, the Southeast Asia theater inventory exceeded 75 percent of the containers then owned by the Army and Air Force.

The 150,000 containers in theater represented about 6 million square feet of covered storage. This figure is impressive when compared to the fact that only about 11 million square feet of covered storage had been built in the entire Southeast Asia theater by mid-1969. These containers also satisfied a wide variety of Soldier, unit, and support activity needs for convenient and readily available storage and shelters. U.S. forces often used containers as dispensaries, command posts, post exchanges, and bunkers. Few of the containers moved to Southeast Asia were ever returned to the United States.

Throughout the post-Vietnam era, cargo containerization continued to be an integral component of support to globally deployed U.S. forces. Containers offered a low-cost, easily sourced method to build the logistics footprint, increase sustainment velocity, and reduce transportation support and manpower requirements. In August 1990, for Operation Desert Shield, the Army again widely employed cargo containers for a massive military buildup and deployment.

During Operation Desert Storm in 1991, about 40,000 commercial and Special Middle East Shipment Agreement containers were sent to Southwest Asia. The shipping was relatively easy; determining the contents of containers was not. About half of the containers had to be opened and manually searched or inventoried to ascertain their contents. Many were never even opened. Supply requests went unfilled or had to be submitted multiple times, degrading the readiness and operability of the requesting units.

After Operation Desert Storm in 1991, the rapid evolution of logistics automation systems led to improvements in container content identification and distribution. These improvements permitted the transition from “iron mountain” logistics to a leaner, smarter “just in time” system, which eliminated the time-consuming act of opening containers at the port. These developments, combined with the use of coordinated land operations along ground lines of communication, significantly increased the military’s ability to transport and position supplies to sustain deployed forces. Containerized cargo made logistics support and sustainment operations more precise, flexible, and far-reaching.

Current Operational Picture

Containerized cargo enters the Operation Iraqi Freedom (OIF) theater through both the commercial Port of Shuaikh, Kuwait, and the military seaport of debarkation (SPOD) at the Port of Ash Shuwaiba, Kuwait. From the ports, ground and air transport are used to move containerized cargo to the warfighter.

Annually, an average of 11,000 containers are received at the commercial port, transloaded from
carrier-owned to Government-owned or -leased containers, and moved by convoy or contracted barge to the supply support activities (SSAs) and forward operating bases (FOBs) within the Iraqi battlespace. A system of 10 empty-container collection points (9 in Iraq and 1 in Kuwait) receives, processes, updates automated records of, and recirculates containers through a road network covering an area roughly the size of Texas. Deploying units arrive in theater at nearly the same time as their containerized and heavy organic equipment, which is efficiently moved with relatively few problems from the port to the training and staging areas and from there to the FOBs and SSAs in theater.

Container Shortage

Although the container management system was well conceived and well planned, the U.S. military is experiencing an increasing shortage of containers within the Southwest Asia area of operations. This shortage stems not from low aggregate numbers of containers but from a low availability of containers caused by poor container turn-in and accountability and the use of containers for functions other than moving cargo. The incorrect use of containers is creating a shortfall where a sufficient supply of containers would be expected to be available for circulation.

Approximately 11,000 containers are required annu-ally to transport sustainment resources in Iraq and Kuwait. Today, containers arriving at the SPOD may be identified by radio-frequency tracking devices. Information on container consignees is known before shipments arrive. Container managers and users are given appropriate access to the equipment tracking system to observe the movement of convoys transporting containers from the SPOD to the FOB. With an average of 11,000 containers entering the theater annually, we would expect to see empty containers numbering in the thousands at each collection point once the contents have been removed from them. This, however, is not the case.

Container Management System

As with every commodity and resource owned or employed by the U.S. military, accountability is paramount when it comes to containers. The Army had solved the problem of how to efficiently transport and track (through radio-frequency identification devices) containers, as well as how to identify containers and their contents. The challenge that still faced military logisticians was how to eliminate the unrestricted disposition of containers. To deal with this problem, the Army developed the Integrated Booking System-Container Management Module (IBS–CMM). This system is currently the primary electronic management and tracking tool used to account for containers.

IBS–CMM allows logisticians to track containers on a digital database. Every time the containers are moved, logisticians can add or remove the identification numbers of the containers at an identifiable physical location. This process is called in-gate/out-gate. When done consistently and reinforced by a physical inventory, IBS–CMM can provide near-real-time tracking of each container’s location and its dwell time at each location.

The problem encountered by military logisticians using this container management system was the difficulty in enforcing the in-gate/out-gate procedures. Lack of timely data input and the accumulation of data-entry errors over the past 6 years have made data in IBS–CMM inaccurate and unreliable.

Today, IBS–CMM lists about 120,000 records for containers at sites in Iraq and Kuwait. However, when duplicate numbers, missing data entries, and undocumented exports of containers from theater are factored in, the database may have as few as 60,000 to 80,000 valid records. A 2008 Lean Six Sigma team analysis of this problem, using IBS–CMM data, showed error rates of the sampled container site population as high as 81.6 percent, with an average error rate of 23 percent.

Container management experts from the 1184th Container Management Element (CME), deployed from May 2008 to May 2009, were assigned to clean up inaccurate IBS–CMM data in the OIF theater. The 1184th CME worked day and night to correct inaccuracies in the database so container numbers and site information would be reliable. The CME’s goal was to update and maintain accurate records by enforcing the in-gate/out-gate procedures. The cleanup process was tedious and progressed slowly. The CME, working with limited staff to undo 6 years of poor data management practices, successfully identified more than 20,000 false or duplicate records.

Container Accountability

When automated accounting and inventory management systems are used effectively, containers are accurately tracked by number and location. So why is the relatively simple in-gate/out-gate tracking process not properly enforced? Containers are not diligently processed because container users do not think containers are items that require proper tracking or accountability procedures. This mindset is perpetuated by the categorization of containers as class II (general supplies), which are viewed as relatively low-cost, expendable, common-use assets. In short, users of nonassigned containers are not being held accountable for proper container disposition.

Transport equipment is annotated on unit property books and individual hand receipts. But containers are often not placed on property books and generally are accounted for only when issued to a specific unit or installation support activity. Otherwise, no particular entity accounts for them. No maintenance support activity is responsible for repairing or restenciling them. They are common-user assets and can be used without assigning any accountable or responsible parties.

Trucks, trailers, and materials-handling equipment are usually under the control of an assigned operator. They have maintenance schedules, property book entries, and hand receipt holders. If a piece of equipment is lost or damaged beyond fair wear and tear, the responsible party can be held financially liable. Containers, on the other hand, are procured and managed under a program in which many different individuals, units, and support activities use them. Each user has no more or less accountability and responsibility for the containers than the others. No existing requirement adequately assigns accountability and responsibility to the many users of nonassigned containers.

Containers Versus Warehouse Storage

During the Vietnam War, 150,000 empty containers provided approximately one-third (6 million square feet) of the required 17 million square feet of covered storage space. The 11,000 containers annually put into circulation in the OIF theater are supposed to be available only for transloading and recirculation in sustainment operations. However, as in Vietnam, a similar need for warehouse space also exists in the Southwest Asia theater. Of the 60,000 to 80,000 containers that may currently be available in the OIF theater, a large number are being used for storage by numerous units and contracted logistics support activities, thus effectively removing them from circulation.

Military units and contracted operators in theater need the readily available storage capability provided by containers to perform their missions. Contractors avoid the cost of building warehouse space by using the “free” container storage space. A 20-foot container is a preconstructed facility with 160 square feet of floor space. This amount of warehouse space would cost $13,120 to build, based on the U.S. national average cost of $82 per square foot, or $160 per month to lease. A 15-month, continuous lease of 160 square feet of space would equal the cost of a newly purchased container. By using containers, the U.S. military avoids the capital cost of warehousing. But when containers are used as warehouse space, they can no longer fulfill their intended purpose as mobile transport assets.

As the OIF theater matured and hundreds of units rotated in and out of theater, operational priorities shifted and so did materiel requirements. Military logisticians had to adjust to meet the theater’s changing need for supplies. Existing unused Army supply stocks in theater, however, remained. Unused class II, IV (construction and barrier materials), VI (personal demand items), VIII (medical materiel), and IX (repair parts) items pushed from SSAs to end-users throughout the areas of operations were not retrograded. Where could the U.S. military store 6 years worth of excess, nonexpended, and possibly under-accounted-for supplies and materiel in theater? These items are likely to be found in thousands of containers at camps and supply points in Iraq and Kuwait.

In November 2008, a Lean Six Sigma team studying the problem of container shortages in theater sampled a pool of 1,433 containers to determine their dwell time. Although the sampled containers were identified as being available for transloading and continuous circulation, 68 percent, or 972 of them, were found to have been at their present locations for more than 180 days. The estimated time for containers to move from Kuwait to Iraq and back after offloading should not have exceeded 40 days. This led the study group to conclude that many of the containers transported to Iraq, like those in Vietnam, had been transformed into warehouse space.

Although the need for storage space is increasing, warehouse construction is restricted by host-nation governments, which do not allow the U.S. military to create a permanent presence or permanent structures in most locations. At U.S. camps in Kuwait, military activities are expressly prohibited from building permanent facilities. Similar restrictions for the creation of a permanent U.S. military footprint are in effect in Iraq.

The use of containers as storage space also grew out of increased logistics support to supply larger military forces deployed to the theater. In March 2003, the U.S. military contracted supplies for only 50,000 troops for 180 days to support OIF. Today, the Logistics Civil Augmentation Program (LOGCAP) support contract is sustaining a force of more than 200,000 personnel across the full spectrum of operations. The LOGCAP sustainment contract has been in effect for 6½ years in theater. However, despite steadily increasing logistics support and storage requirements, U.S. forces continue to operate under a plan in which no permanent structures will be built to meet the growing need for warehouse space in Kuwait and Iraq.

Recommendations for Change

To maximize the availability and circulation of cargo containers in OIF and minimize the cost of replacing these valuable assets, we must improve and enforce the system under which containers are currently managed. The four recommendations listed below can help ensure that we maintain an adequate supply of available containers in circulation in theater. If implemented, these recommendations could significantly reduce the likelihood of a potential container shortage.

Institute stronger enforcement of in-gate/out-gate procedures. The automated container management system, IBS–CMM, is sufficient, available, and in place in the theater for container managers. But the system is only as good as its users make it. High data-input accuracy rates must be enforced to ensure that the data are valid. Data in IBS–CMM reports should be verified by physical inventories. CME staff must ensure that all system users are sufficiently trained on inputting data. They also must conduct periodic quality control checks to verify data input accuracy.

A quarterly or cyclic container inventory schedule should be developed at all container collection sites. This action would provide an updated count and ver-ify the location of all containers at each collection site. It would also help ensure that container site data are reliable so container managers can monitor container circulation rates, movement, and usage in supporting sustainment operations. Accurate container counts would also produce reliable data on available containers, enabling the development of valid projections for any necessary container replacements.

In-gate/out-gate procedures and container-use policies should be clearly spelled out and disseminated to military and contractor users. For contractors, the contract scope of work language should also address financial penalties for failure to comply with container management policies and procedures. Contractors should also be assessed a current market value fee for leasing Government-owned containers, thus encouraging minimal use of containers for storage space. Contractor compliance should not be difficult to achieve since the Government can enforce contracts or not renew contracts based on noncompliance.

Information on rules for container use, enforcement of the in-gate/out-gate procedures, and policies for the appropriate use of containers must also be conveyed to military container users to gain their compliance with container policies and disposition requirements. Compliance by military users may not be as easy to enforce.

Track Government-owned and -leased containers by satellite.
Satellite tracking as a means for managing containers would not replace the IBS–CMM system. However, along with cyclic inventory physical inspections, satellite tracking would provide a versatile method of verifying container locations. When containers are moved into remote locations, satellite tracking provides an immediate means of pinpointing their locations in real time.

Using satellite tracking to provide in-transit visibility of sustainment cargo has advantages over the interrogator radio-frequency tracking network. Satellite tracking does not rely on containers crossing certain known points, and when logistics sites shift to better support units engaged in military operations, satellites can track containers without relocating the interrogator tracking devices. Interrogator equipment can become a target for enemies seeking to disrupt supply operations by destroying or damaging it, and this equipment can mark our main supply routes for the enemy.

Satellite readers or tags from commercial vendors can be purchased for as little as $150 per tag, adding about 6 percent to the cost of each container purchased. If the cost increase is determined to be prohibitive for every container, a smaller supply of tags could be purchased and affixed to containers before transloading and movement. Once affixed, the tags would relay container locations until removed. The removed tags could be affixed to other containers scheduled for movement.

The satellite tracking data on container movements could also be used to update the IBS–CMM data or as another means of checking data in the system.

Assign accountability and responsibility to container users. Unassigned containers are currently tracked as aggregate numbers of units available for use, rather than as individual equipment items that have lifecycle use. Assigning accountability and responsibility to container users would significantly increase the container manager’s ability to reclaim cargo containers. Accountability assignment would require that all Government-owned or -leased containers be added to a unit’s property book or hand receipted to a designated user. The property book may be a regional or unit property book or a separately developed property book linked to the military transportation asset provider, the commercial carrier, the movement control battalion, or the CME. These organizations should have justification or authority for container ownership or control.

The organization most likely to develop a separate property book for container accountability would be an enhanced CME. Hand receipting containers and requiring the hand-receipt holders to follow inventory procedures would document each container. Accountability records would enable container managers to know how many containers are put into the distribution network and how many containers come out of the distribution network on a monthly basis. Without assignment of accountability and responsibility, it is hard to know which containers are re-entering the pool, how long they take to circulate, or where the choke points in the distribution network are found.

Data on assigned container use, including road distance moved, the time to travel from the port to the FOB and back, and container dwell time, could greatly benefit container managers. More importantly, assignment of accountability and responsibility would give container managers the authority to enforce the container use policies designed to ensure that containers are not “lost” in the system and are more likely to be returned for reuse.

Obtain contractor- or Government-provided mobile warehouses. The Lean Six Sigma team’s container shortage analysis revealed the team consensus that the U.S. military is experiencing not so much a container shortage as a storage space shortage. Containers are being “lost” to use as storage space. This is consistent with how containers were used in Vietnam.

With information on theater container usage, the U.S. military can plan for adequate storage space to support sustainment operations. Military planners anticipate sustainment needs and may build in excess stocks to ensure supply shortages do not become war-stoppers. Having excess stock, however, leads to a greater need for storage space.

A lack of fixed storage facilities increases the likelihood of containers being converted into warehouse space. The OIF theater needs mobile, compartmental-ized storage facilities that offer a maximum volume of temporary storage space. Air-supported structures could fill this need and have several advantages—

  • At $15 per square foot for construction and erection, air-supported structures would cost approximately 80 percent less than conventional, permanent structures.
  • Military-owned and -warehoused air-supported structures can be ordered and received in as little as 6 weeks.
  • Air-supported structures are easily transported; a 60,000-square-foot structure can be transported on five standard pallets, with four pallets for the struc-ture materials and one pallet for the fan assembly and power unit.
  • After use, the air-supported structure can be taken down, decontaminated, and repackaged for ship-ment, storage, and reuse
  • Air-supported structures do not require significant ground preparation or equipment for installation, and no sheet metal, concrete, or skilled labor is required.
  • Maintenance and repair of the fabric is done with a patch and a heat gun.
  • The structures are durable, have a lifespan of 20 years, can withstand 130-mile-per-hour winds (with arrester cabling assemblies), and will stay inflated with large tears.
  • The structures have a low operating cost because power is provided off-grid by the organic generator and the fabric the structures are made from is translucent so artificial light is not needed during daylight hours.

The use of air-supported structures can be justified and required in a contract performance work statement either requiring a contractor to procure one or requiring the contractor to use one provided by the U.S. military.

As temporary facilities, the air-supported structures would help reassure the host-nation government that the U.S. military does not intend to be a permanent presence in the country.

Containerization of cargo has enabled exponential increases in transloading efficiency, greatly enhancing logistics support to combat operations. However, poor management of existing container assets could cause significant container shortages in the near future. To avoid this problem, military logisticians must improve container management procedures for tracking container movements, accurately recording container location data, assigning container user accountability and responsibility, and ensuring that containers are employed within the scope of their intended purpose. Another way to reduce container losses would be to procure and set up convenient, temporary, portable, cost-effective, and reusable warehouse space to adequately meet the theater’s expanding need for supply and materiel storage.

In today’s fluid, unpredictable environment of land warfare, military logistics operations must be capable of moving cargo farther, to more locations, and more rapidly into theater than ever before. In this effort, cargo containers play an important role in the support of global military operations. Mobile, durable, and reusable, these assets are critical to the current logistics capability of the OIF theater and should be carefully conserved in order to effectively continue sustaining the warfighter.

Major Darryl R. Weaver, USAR, is the transportation officer for the 63d Regional Readiness Command in Los Alamitos, California. He holds a B.S. degree in history from Central Missouri State University and is a graduate of the Transportation Officer Basic Course and the Combined Logistics Captains Career Course.

The author thanks Major Belinda A. May, public affairs officer, 311th Expeditionary Sustainment Command, for her assistance in preparing this article for publication.

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