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H2020

4FOLD Phase 2 Report Summary

Project ID: 711257

Periodic Reporting for period 2 - 4FOLD Phase 2 (4FOLD Reduction of the International Transport of Empty Containers by Folding)

Reporting period: 2016-12-01 to 2017-03-31

Summary of the context and overall objectives of the project

In 2016 the European Union decided to include HCI in the Horizon 2020 Research and Innovation Program (Agreement 711257) because of the environmental aspect of the 4FOLD: Foldable containers reduce empty transport. With this endorsement of 2.5 Million Euros from the European Union, HCI now has a production line in China that allows production of 4FOLD containers on a large scale at lower costs and an acceptable lead time.
Due to the global imbalance of import/export ca. €25 billion a year is spent on repositioning empty containers and unnecessary emissions of CO2, NOx and PM are generated. The technical solution proposed by HCI is the 4FOLD foldable container. 4 folded 4FOLD containers stacked have the same dimensions as 1 container, enabling the reduction of transport movements up to 75%. An increase of the shipping lines’ profit margin of 600% is possible, corresponding to savings up to 25% on the operational costs and 27% on the total CO2 emissions of container transport at sea.
A reduction of 25% on operational costs can be achieved, giving an huge economic boost to the EU logistics sector and the total EU economy. The 4FOLD strengthens the EU transport sector by making container transport more time and cost efficient, creating new jobs and tackling the mentioned environmental and mobility defies.
The overall goal of the Phase2 project is to catalyse market uptake of the 4FOLD foldable container. A large scale demonstration is necessary to convince the conservative logistics sector of the added value and usability of the 4FOLD and opens the market for this innovation. In this objective, feasibility, cost price, lead-time, durability and scale is very important in order to be successful.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

To kick-off the EU project, HCI gave several demonstrations at different places in Europe to showcase 4FOLD to a wider audience. HCI demonstrations were held in Radicatel, France; Rotterdam, the Netherlands; Hamburg, Germany; Istanbul, Turkey; and Haifa, Israel. Furthermore, HCI sent a bundle from Venlo, the Netherlands by train to Busto, Italy as a showcase the use of 4FOLD by train. HCI also participated in the Intermodal in Rotterdam, the largest container exhibition in the world. At HCI’s booth, HCI spoke with many new and current prospects. Please see pictures in the appendix of different demonstrations. One demonstration party has performed a trial with several 4FOLD containers. Other trial runs, under the EU project have not yet started.
To support the usage of the 4FOLD containers and folding demonstrations, HCI also created live documents in the form of manuals, on how to operate the container, as well as how to maintain and repair the containers. HCI also created a spare parts list (http://hcinnovations.nl/wp-content/uploads/2016/10/4FOLD-Spare-Parts-October-2016.pdf).
Furthermore, HCI has developed and started implementing an international training program to certify several depots worldwide to become a ‘certified 4FOLD depot’. This means certification means after the depot has completed training from HCI, can independently (un)fold, operate, maintain 4FOLDs. In the appendix is a list of all depots (http://hcinnovations.nl/folding-facilities/).
The first batch of containers is now in production and is expected to be finished in the first quarter of 2017. HCI has discussed further improvements regarding the production process with the factory, as well as updates to the container design where necessary. The order of the second batch of containers is expected early in the second quarter of 2017, and at that time further production improvements are to be implemented.

The first batch of containers was finished and delivered January 2017, these containers are now used in the various demonstration project to and from Europe. Further results are expected by the end of 2017.
HCI created an updated marketing and communication strategy, which are both being implemented at this time. One of the focus points of the marketing strategy is the use of sales agents in locations where HCI has little or no presence. At this time HCI has about 5 agents in different parts of the world and this number is growing. On the manufacturing side HCI has implemented further updates to bring the labour costs down for the building of containers, one of the key objectives of the project. This is done through design updates as well as the increased use of jigs and moulds in the factory. HCI expects to place an order for a second larger batch of containers in Q2 of 2017 in order to increase the number of 4FOLD containers for the demonstrations projects.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Ever since this project was granted, HCI has increased the number of postings with the appropriate reference to H2020 project to keep all stakeholders up-to-date. HCI has received attention in a variety of media from professional magazines to environmental competitions.
The current batch containers in production will be ISO certified (a standard container certification) by two agencies, most likely Lloyds Register and the Chinese Classification Society (CCS). 4FOLD has already received clearance from Chinese Customs authorities for railway transport, opening opportunities for the usage of 4FOLD on rail to Europe following the Silk Route. With 128 boxes entering the fleet in 2017, HCI is looking for an experienced market party to manage the fleet.
Splitting the containers into two batches is a strategic choice made by HCI. Extending the time in between the two batches creates an opportunity to lower the cost price directly for the next batch, which, in turn, will result in huge savings. HCI has devised a clear plan for the near future on how to reduce the cost price while increasing the order volume. HCI has nearly finished a final improved design that will ease production and lower material cost, and as a result the cost price for this batch will drop further.
Since the market is very rural, the total TEU capacity increased by 20% in the last four years. The expected top 10 shipping lines in 2017 has the same market share as the top 20 in 2013, almost 87% of the total market share. These figures reflect a shift in the competitive landscape in 2013 when 10 out of the 20 shipping lines either merged or went bankrupt, including two of HCI’s biggest clients, APL and HANJIN.
HCI has been gathering data from market parties to form a comprehensive marketing strategy for the EU market launch. A point of interest here is that HCI not only focuses on the large shipping lines, but also explicitly has started to target smaller companies that sometimes operate in challenging environments with high imbalances. Furthermore, has HCI started to designate sales agents for specific territories where HCI may not have presence.

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