Shipping containers and containerization aren’t something that most people, even supply chain managers, think about that much. That’s not surprising, as these containers are so ubiquitous it’s easy to overlook just how much they have revolutionized global trade. Since containerization was introduced, it’s become a vital part of supply chain infrastructure, and it’s worth digging into the facts behind containerization a little more.
Here are answers to the questions you didn’t know you had about containers, containerization and how they make getting products from A to B as efficient as possible.
What is containerization?
Containerization is a way of using specialized intermodal container assets, commonly known as shipping containers, to transport ingredients, raw materials, parts and finished products from one place to another.
Why are these intermodal shipping containers so revolutionary?
The most important feature of the shipping container is that it is intermodal—it can be transported easily using several different types of transport. Whether a container is being pulled by road on a truck, carried on the railway or shipped overseas on a container ship, standardization makes transporting and handling these containers fast and easy. That means cost and efficiency savings throughout the supply chain. Every minute saved translates directly to faster transfer of goods, reduced waste and environmental impact, and better margins.
What are the benefits of using shipping containers?
Shipping containers provide numerous benefits to supply chain management (SCM), logistics companies, distributors, manufacturers, retailers and any other organization involved in the global supply chain.
These benefits include:
What impact did containerization have on previous methods of transporting cargo?
Prior to containerization, ports and warehouses spent a great deal of time packing, unpacking, sorting, transferring and consolidating goods. The move to shipping containers significantly reduced the overheads involved with handling “break bulk” cargo.
This break bulk cargo was moved between factories, transport, warehouses and final destinations piece-by-piece, requiring a great deal of manpower and specialized equipment. As containerization became more automated, there was less manual intervention resulting in massively-reduced congestion for ports, transport and warehouses.
Logistics and other distribution and shipping businesses became leaner and maximized efficiency, as standardization resulted in less need for custom equipment or expertise. SCM became streamlined, as the movement and handling times of shipping containers was more predictable and easier to manage.
When was containerization invented?
Containerization has existed in one form or another for centuries, but there have been several major developments over the last 60 years that have popularized it as the default way to transport goods internationally. Some milestones include:
How much are containers used today?
Over 90 percent of international, non-bulk cargo is moved in shipping containers on container ships.3 Overall, global ocean container transport accounts for around 60 percent of all world ocean trade, and this container trade is worth over 7 trillion dollars a year.4
Almost 2 billion metric tons of goods are transported in shipping containers each year,5 and the global container ship fleet has a capacity of around 20 million standard containers.4 It’s estimated that there are between 20 and 25 million shipping containers in active service, with around 5 or 6 million being moved at any specific time.6
International seaborne trade carried by container ships from 1980 to 2017 (in million tons loaded)
Source: Statista, used in accordance with their terms and conditions
Who owns shipping containers?
Shipping containers are typically owned by a container shipping line or by leasing companies. Some major container shipping lines include China Ocean Shipping Company, Maersk Line, CMA-CGM, Mediterranean Shipping Company, Hapag-Lloyd and Evergreen. Some major container leasing companies include Triton Container/TAL International, Textainer Group, HNA/Bohai Group, Florens Container Leasing, SeaCube Container Leasing and CAI International.7,8
Find out how a leading asset owner used Blume solutions to optimize the capacity of its containers.
Are problems caused by empty shipping containers?
Ideally, containers should always be full when they are moved. This is the most efficient way to transport goods and results in the lowest costs. Unfortunately, due to global trade imbalances and other issues, only transporting containers when they are full is impossible.
This is an issue for several reasons:
Because of these imbalances, the repositioning of empty containers is a major issue and cost for shipping lines, leasing businesses and other supply chain organizations. Around 2.5 million “twenty-foot equivalent units” of containers are stored empty. That’s around 10 percent of all container assets and over 20 percent of all containers handled by ports.9
How can the movement of empty containers be reduced?
There are several strategies that supply chain organizations and SCM can use to reduce the cost, effort and other resources involved in transporting empty containers.
New supply chain technologies have a big part to play in these initiatives. For example:
Whatever happens, containerization is here to stay. As supply chain managers and other organizations get more insight into the global supply chain, the need for greater efficiencies will demand powerful technical solutions to the empty container problem and trade imbalances.
Learn how Blume Assets enables carriers, service providers and enterprises to manage their key assets—including containers, chassis, trailers and more—across the entire supply chain lifecycle.
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