What is Container Shipping?

Container shipping has a history of more than 60 years. More than 60% of the sea freight is containerized cargo. Day by day large container vessels add to the world vessel fleet by shipping lines to cater to the demand for containerized cargo. There are different shipbuilding companies for ship construction and the largest container vessel in the fleet can carry up to 24,000 TEUs.

Containerization Definition

Stuffing cargo in a container for transportation is called containerization.  The oxford learners dictionary has given the definition fo containerization as “​the process of packing and transporting things in containers (= large metal or wooden boxes for transporting goods on ships, trains, etc.)”

History of Containerization

Back in thousand years shipping goods was not easy. Each individual good packed in barrels, sacks, and crates had to load and unload separately as the only known loading and unloading technique was break-bulk shipping.

Since this process is labor-intensive ships had to spend hours in ports for cargo loading and unloading, consuming times with the risk of accidents, thefts, and losses.

Later individual goods were bundled using ropes to ease the cargo handling, yet no logical system was presented.

Introducing box shipping was a real turning point in shipping history. Container shipping has more than 60 years of history. Malcolm P. McLean, an entrepreneur from North Carolina, USA changed the shipping industry with his smart idea of introducing container shipping. 

MacLean has realized the delays and risks involved in cargo transportation in break bulk shipping. So he came up with the idea of transporting them on a trailer which later developed into the container uses today.

MacLean’s idea was to simplify and smooth the shipping and transfer cargo from ship to other transport modes with the trailer to reduce unnecessary cargo handling.  His theory was to improve efficiency through intermodalism.

In MacLean’s steamboat company, On 26 April 1956, he has shipped 58 metal container boxes along with 15,000 tons of bulk petroleum from Port Newark to Port Houston in the USA. Malcom McLean’s converted the World War II tanker, the Ideal X to ship containers and she has transported the world’s 1st container.

Due to the popularity gained by MacLean’s Sea-Land services, the 1st container transporting company, Matson Navigation Company entered into container shipping two years later. Their 1^st container carrying ship Hawaiian Merchant began container shipping in the Pacific, carrying 20 containers from Alameda to Honolulu.

Sea-Land constructed the very first dedicated ship for containers, the  Gateway City, made its maiden voyage on 4 October 1957 from Port Newark to Miami. Starting a regular journey between Port Newark, Miami, Houston, and Tampa. Gateway City’s productivity was 264 tons per hour with two gangs of dock workers.

In January 1960, Grace Line’s Santa Eliana became the first fully containerized ship to trade internationally with her sailing to Venezuela.

ISO Standards for Containers

With the fast development and use of containers due to their usefulness, the need of having globally agreed container sizes arises. Having standard container sizes could utilize the space when stacking them in ships supporting the stowage plan, trucks, and yards. Further, the cargo handling equipment including cranes could be manufactured on standard sizes.

In 1961, the International Organization for Standardization (ISO) set the standard sizes of containers further smoothing and supporting the container industry.  With the standards, the most common container sizes are 20 FT and 40 FT in length. 

Hence 1 TEU is equal to a Twenty-Foot Equivalent Unit or one 20 foot in length. The capacity of a container vessel and cargo volume is also measured by the TEU’s. Further 40 FT length container or commonly name as 40 footer is the length of two, 20 FT length containers.

What types of Goods can be Containerized?

In general, any good which fits the size of the container can be containerized.  There are different types and sizes of containers are available for you to find the best fit container for your goods.

Containers

Containers are generally constructed of aluminum or steel. With the going green concept, there are containers with bamboo floored being eco friendly.

Regardless of the manufacturer, all the containers are built as per the ISO standards. There are general type containers and containers specifically made to carry specialized cargo.

Few examples are open top containers, flat racks, tank containers, and reefer containers. As per the World Shipping Council, there are more than 34 million TEUs available in the world container fleet.

Full Container Load

Full container load is commonly known as FCL. When a shipper has cargo to fill a container or when the container is fully loaded we call it full container load.

Less Than Container Load

When the cargo volume is smaller to fill a container we call it less than container load or LCL. By combining few LCL shipments we can fill a container. Or we could say the combination of LCL shipments become FCL

Laden Container

A container filled with cargo is a laden container. In shipping, laden container flow is high from Asia to Europe as Europe countries import goods from international market and Aian countries are more into exports of Europe demanded goods

Empty Container

Some countries import cargo more and export less. So the containers came with cargo need to be shipped back with cargo or without cargo. The containers ship without cargo are the empty containers.

Types of Containerization

Air Freight Container

Same as in sea transportation, air freight also has standardized container sizes. Click here to know more about air freight container sizes.

Importance of Containerization

Introducing containerization or container shipping was a revolution in the maritime industry. An industry-only knew to ship as breakbulk has experienced numerous advantages over the new concept.

Intermodalism enabled cargo to be loaded at shippers’ place and deliver to customer’s place combining different transport modes without destuffing them in-between.

So the container shipping made a great impact on faster ship turnaround time, faster truck turnaround time as well as the dwell time of cargo in ports.

This has further added value to the concepts like Just In Time (JIT) delivery, lean inventory, and improved the overall Supply Chain and Logistics performance of a company.

What are the Disadvantages of Containerization

Capacity of Sea Ports

With the development of container shipping, shipping lines buy bigger container ships to carry a higher number of containers at once to gain from economies of scale. Sea ports have to accommodate these bigger ships in terms of berthing, navigation, and cargo handling equipment.

So the deeper draughts ports, turning basin of ports, access channels, and cargo handling equipment should be capable of handling the bigger ships.

High Capital Investments

Containers and container related equipment and facilities are capital intensive. Automating container terminal also requires procuring capital intensive superstructure. i.g: Granty Cranes, Portal cranes

Empty Containers

Because of the trade imbalance, there are a lot of empty containers that are to be re positioned.  These empty containers require the space same as the laden containers, yet do not add any value to the trade flow or to the shipping line.

Encourage Illegal Businesses

Once the cargo is stuffed in a container and sealed cargo inside is not visible at all. Border control bodies do not physically check each and every container while at import export clearance.

Hence there is a high risk of people engaging in illegal activities like transporting drugs and declaring wrong quantities or commodities to gain from taxes.

The 9/ 11th incident in the USA also happed due to this reason where USA had taken initiatives on implementing 24Hr AMS filing to safeguard the country.

What are the Advantages of Containerization

Reduce the Cost of International Trade

Stuffing cargo in a container reduces the number of handling involved throughout the supply chain. This reduces the labor and machinery cost involved in cargo handling. While at the port, stevedoring charges for cargo handling, warehousing charges on storing, and dockage charges due to faster ship turnaround time could reduce.

Time

Earlier 10 packages had to handle 10 times where all 10 packages inside the container could handle at once now. So the cargo transferring time has been drastically reduced. This increases the turnaround time of ships and trucks.

Standardization

Since the containers have standard sizes everyone has the understanding of container handling and storing requirements as the container sizes are known. This is one of the biggest advantages of container shipping.

Safety and Security

A container can be locked once the cargo is stuffed. When the lock is placed at the shipper’s place, it won’t be oped until the container reach the consignee unless customs break the container lock for cargo screening. So there is an assurance that there could not be any threat or theft to the cargo.

Warehousing

Containers could store in open yards. Generally, cargo carry in boxes with all four sides are covered. So there is no need to have closed warehouses to store containers. Further containers can stack on top of another. Even inside the ships, containers stack in the same manner by enabling ships to reach economies of scale.

Container Vessels and Sea Ports

In order to achieve economies of scale container lines adopt strategies and practices like alliances, hub, and spoke models in liner shipping. When the ships get bigger and bigger seaports should have the facilities to accommodate those big vessels.

For example draught of the port, available equipment, berthing capabilities are key factors to consider by a seaport. Further, a ship could be built within 2-4 years. But it will take a few years to construct or expand a port.

If the container operation of a terminal is automated, there are limitations for the same terminal to facilitate bigger ships than the designed capacity.

The containers are typically loaded onto Terminal Tractors from the vessels. These trucks are designed for short-distance haulage, in order to move containers from the ship to the storage yard where the containers wait to be picked up by a truck or a train.

Reach stackers and rubber-tire gantries are highly used to load and unload containers in the yard. Rubber-tire gantries have wheels. These cranes are able to fully straddle containers.

Some cranes run on tracks and can straddle multiple rows of containers. Reach-stackers have a long arm that can easily be used to stack containers several rows deep or to load them onto semi-trailers and rail cars.

Some ports like Rotterdam port has crane operators, remotely operating the gantry crane via computer software that unloads containers from a ship.

The container unloads onto a fully automated terminal truck which drives it to the storage area to be unloaded by an automated stacker crane. Knowing exactly what date and time a container needs to be picked up, a computer can plan the most efficient way to stack containers.

This ensures the container isn’t covered up too deep in the stacks in the loading date is nearby. So the number of operational moves required to access the container is less when need to move it out from the yard.

Automation provides some unique benefits over the human operation, such as the accuracy of repetitive tasks and logical planning of efficient processes.

 Automating a container port is very expensive, yet ports gain benefits such as increased productivity, and safety.