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Containerization & Shipping Containers 1

There is a sharp distinction between the term “Container” and “Containerization” which needs to be explained for clear-cut understanding. The term a container or an intermodal container means a large standardized shipping container or metal box into which cargoes are packed systematically for shipment abroad. The container is designed and built as a loading unit which is suitable for use under different modes of transport – from ship to rail to truck & burges – without unloading and reloading the cargo. Intermodal containers are basically used to transport products efficiently and securely in the global containerized intermodal freight transport system. These containers are described in different names in the trade, such as container, freight container, ISO container, shipping or ocean container, container van or box etc.

20 foot dry freight container
20 foot dry freight container

There are many types and standardized sizes of containers in the trade to suit customer’s requirement but ninety percent of the global container fleet is composed of “General purpose” containers. These containers are closed steel boxes having either twenty or forty foot (6 or 12m) standard length. The common heights of the containers are 8 feet 6 inches (2.6 m) and 9 feet 6 inches (2.9 m). The containers with taller heights are known as “High Cube” container.

The term “Containerization” 

40 foot dry freight container
40 foot dry freight container

The term “Containerization” refers to a system where containers of standard dimensions are increasingly used to cover transportation of all kinds of general cargo in the international trade. The unique role of intermodal container in the modern global trade is the driving force for the advancement of containerization over any other conventional mode of transportation. The main advantage of containerization system is that ISO containers can be loaded & unloaded, stacked, transported efficiently over long distance, transferred from one mode of transport to another i.e. from container ship to rail – to trailer trucks and barges, without being opened at a cheaper rate, faster speed and more secured way which the age old conventional break-bulk system failed to do.

Let us see why traders switched over from break-bulk system to containerization. Upto the beginning of 1960s, cargo carried by maritime shipping was known as “general cargo” and the vessels used to carry those general cargos, were small general dry cargo ships (twin-decker & multi-decker ship). Under this break-bulk system, goods were moved from land to sea using crates, barrels, sacks, pallets, and boxes and the cargoes were stowed into the ship’s holds / hatches in small pre-packed consignments involving labor intensive & time consuming method for loading and unloading. Due to this traditional system of loading and unloading, the ships turnaround time at port was longer. All these factors contributed to increase the cost of transport and other related variable costs to ship owners & thereby hindered the growth of international trade. On the contrary containerization has reduced the loading and unloading time remarkably through using mechanized cargo handling system. Containerization has now succeeded to ensure sailing of ship from any port after completion of loading/unloading operation within a period of 24 hours time.

The far-reaching impact of containerization started to change the situation radically during late 1960s onwards, when container trade launched between the United States and Europe. Subsequently this revolutionary change in the mode of transportation was adopted speedily by rest of the world. General cargoes are now increasingly carried in containers of standard dimension i.e 8’*8’6”*20’ feet unit known as – Twenty Feet Equivalent Unit (TEU). This container penetration in general cargo noticed exponential growth of cargo lifting by containers throughout 1970s & 1980s. At the same time traditional general cargo vessels were replaced by specialized cellular container ships of ever-increasing dimension which has resulted in higher productivity & lower transport cost in the shipping sector.

International Standard Organization
International Standard Organization

At the initial stage, there was some difference of opinion and confusion regarding dimension of a standard 20 foot container which can be used conveniently by international trade. International Organization for Standardization(ISO) played a significant role to solve this critical problem of fixing the standard acceptable to all the countries and in 1961 they successfully set standard sizes for all the containers. The two most important, and most commonly used sizes even today, are the 20-foot and 40-foot lengths. The 20-foot container, referred to as a Twenty-foot Equivalent Unit (TEU), became the industry standard & accordingly the cargo volume and vessel capacity are now measured in TEUs. The 40-foot length container – literally 2 TEUs – became known as the Forty-foot Equivalent Unit (FEU) and is the most frequently used container today. Moreover as per recommendations of ISO standard, a wide variety of container sizes & specifications are now available in the trade to meet the increasing demand of the customers.

It is worthwhile to mention that after 1970 onwards, world transport industry witnessed unprecedented growth of containerization in the developed and developing countries during next few decades which created opportunities for massive investment in the building of cellular container ships of ever increasing capacity, setting up of new fully container terminal equipped with latest container handling equipments, container fleet development and overall infrastructural development for intermodal transportation. World fleet of container ships including Roll-on / Roll-off Ships, are now capable to cater about 60% of the sea-borne cargoes transported internationally per year. According to Drewry Maritime Research, the global container fleet reached to a volume of 36.6 million TEU in 2014. (Reference source: Wikipedia ) which is a landmark in the history of containerization.

All the above developments in the intermodal freight transportation system is the outcome of containerization that has been taking place during the last 50 years.

Containerization VS Globalization

The decisive role of Container and Containerization paved the path of Globalization of international trade in the form as we observed today. The importance of Container is not confined to a closed steel box used for loading cargo only. It acted as an engine of growth for transforming and integrating the mode of maritime transportation into the framework of intermodal system. Containerization replaced the conventional break-bulk system with most modern transportation network which has guaranteed movement of goods from shipper’s door to consignee’s door i.e. door to door service, at a cheaper rate, faster speed and most secured way. That is why Containerization is synonymous to the terms Globalization and

Intermodalism. Containerization directly contributed for the globalization of trade to grow at the speed and magnitude which we notice today during the past fifty years.

The factual position of Industry Globalization as per below statistics, would focus some light on how the Containerization made the breakthrough historically. The container ship named “Sea-Land Fairland” made the first international sea voyage from Port Elizabeth, USA to Port Rotterdam, Netherland with 236 containers on 23 April 1966. During Vietnam War, the US military faced logistic problem to ensure mass supplies to the troops deployed in the war zone and used container shipping as the best solution to their problem. The years from 1968 to 1972 witnessed rapid growth of container shipping. In 1968, 18 container ships were built with a capacity of 1000 TEUs each. In 1969, 25 ships were built with larger capacity of about 2000 TEU. In 1972, container ships with capacity of 3000 TEU were completed.

The container shipping flourished tremendously during the period from 1970 – 1980. By the end of this decade, the trade between Europe, North/South America, South/Far/Eastern Asia, South Africa, and Australia/New Zealand were brought under containerized system. In 1973, US, European and Asian container ship operators were carrying 4 million TEUs all over the world which volume rose to 12 million TEUs by 1983. This phenomenal growth of shipping industry connecting all the major countries of the world truly reflects the globalization of trade in true sense of the term. The driving force behind the spectacular growth of international trade is undoubtedly the role of container as a durable, safe & cost effective means of freight transportation.

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