Containerisation

A Study of Container Shipping By Kieran Alcock| Introduction “Containerization (or containerisation) is a system of intermodal freight transport using standard intermodal containers as prescribed by the International Organization for Standardization (ISO). These can be loaded and sealed intact onto container ships, railroad cars, planes, and trucks. ” The shipping container is one of the most significant inventions of the twentieth century. Along with the internet, it has revolutionised the global economy and the way we conduct business today.

Consumers in Ireland are aware that the products they purchase on a daily basis come from all over the world.

But few realise the effect that intermodal transportation, which is the seamless movement of containerised goods via sea, rail and road, has on the availability of our everyday items. Before containerisation, the movement of goods was a slow and inefficient process. Cargo ships could spend as much time in port being loaded as they did on the open seas reaching their destination and then as much time again being unloaded.

This ruled out moving perishable goods as the time taken to reach their destination far exceeded their longevity.

Today, the container ships are loaded and unloaded at state of the art facilities where thousands of containers are then transported by rail or road on to their destination to the consumer. The container has made transporting goods more cost effective and also increased the security of the goods being transported. The standardisation of container sizes, shapes and form has considerably lowered freight charges and costs.

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This uniformity means ships can be loaded and unloaded quickly and cargo ships spend less time in port meaning reduced transportation times. The container increased security of transporting goods.

Firstly, the container hides the cargo from view and gives no indication of what is being transported. It is sealed when loaded and any attempts at tampering are immediately noticed. They also protect the goods when being transported from external forces, such as weather and damage when being moved. The global economy would not be what it is today without the introduction of the container, invented in 1956. Today it carries approx 90% of all goods in world trade. Almost all goods can be loaded and transported in the “Box”, as it is often referred to. As a result, containerisation has played a major role in globalisation.

History Containerisation of sorts has been going on since the early eighteenth century. People have been transporting goods in boxes or “containers” of various sizes for quite some time. By the 1830’s, railroads were carrying containers that could be transferred to other modes of transport. These containers were small by today’s standards. At the beginning of the 20th century, some standardised containers were being used in the UK railroad system. But it wasn’t until 1955 that Malcolm McLean worked with engineer, Keith Tantlinger, to develop the modern intermodal container.

They designed a shipping container and a method of loading and locking them onto ships. The design included a twist-lock mechanism atop each of the four corners, allowing the containers to be easily secured and lifted by cranes. This was the beginning of the international standardisation of shipping containers. In 1956, the year the container was introduced, the world was full of small companies selling to local markets. By the end of the 20th century, there were very few purely local markets left as globalisation grew on the back of the shipping container.

McLean transported his first load of 58 trailer trucks on a refitted tanker named the Ideal X from Newark to Houston on the 26th April 1956. Arriving in Houston six days later, the trailer trucks were unloaded by hoist and placed on new running gear and delivered to their intended destination without being handled by longshoremen, McLean had orchestrated a pioneering voyage. In 1957, McLean launched the Ship Gateway City, a converted WW II cargo ship classed as a C-2 vessel. This vessel was converted to stack containers atop one another below deck and above deck.

This 450-ft vessel could accommodate 226 trailers compared to the 56 the 524-ft Ideal X carried one year earlier. Five sister ships joined that year and the earlier vessels were retired. In 1960, McLean renamed his maritime company “Sea-Land Service” and remained at the forefront or the container revolution through the late sixties with the Vietnam War. McLean convinced the US military of the benefits of placing supplies in containers to maintain an effective supply chain. He argued it would reduce the incidents of theft, both at the outbound port and at the receiving port.

He was also able to use the returning vessels to bring back goods that were produced in Asia to new markets in the US. Container ships continued to grow and are typically compared in terms of carrying capacity. The twenty-ft container is the smallest in use and all vessels are measured in TEU’s, or Twenty-ft equivalent units. Therefore, a 1,000-TEU container ship can carry 1,000 twenty-ft containers or 500 forty-ft containers. The company Malcolm McLean built up was sold to A. P. Moeller Group in 1999 and was absorbed into the Maersk Line, the largest container ship fleet in the world.

The largest container ship in the world at the moment is the Emma Maersk, a 1,303-ft long, 184-ft wide, 207-ft high ship capable of carrying 11,000 TEU’s. Containers- Environment “The Container is at the core of a highly automated system for moving goods from anywhere, to anywhere, with a minimum of cost and complication on the way. ” This movement of goods by various means including ship, rail and road is known as “Intermodal”. It allows the transporting of freight from origin to destination without any handling of the goods themselves, when changing from one mode of transport to another.

Companies use intermodal transport as the most efficient, timely, cost effective and environmentally friendly method of moving goods. Intermodal can use all modes of transport such as road, rail, sea or air. Container shipping is the most environmentally efficient way to move large volumes across the globe. For example, for every kilometre that a container ship carries a ton of cargo, it is far more energy efficient and emits much less in the way of harmful CO2 emissions than any other type of freight transport. It is estimated that a container ship emits around 40 times less CO2 than a large freight aircraft and over hree times less than a heavy truck. Container shipping is also estimated to be two and a half times more energy efficient than rail and seven times more so than road. Another example of the industry’s environmental awareness was the decision taken for container ships operating on the Asia to Europe trade to slow from 24 to 20 knots.

This has resulted in emissions being cut by up to 35%, whilst maintaining service levels. This stresses the importance of environmental practices to reinforce the fact that shipping is the most energy efficient form of freight transport. Standard Containers 0′ X 8’6″STANDARD DRY VAN 40′ X8’6″STANDARD DRY VAN 40′ x 9’6″ HIGH CUBE/DRY CONTAINERS 20′ OPEN TOP CONTAINERS 40′ OPEN TOP CONTAINERS 40′ X 9’6″ REFRIGERATED CONTAINERS Containers- Advantages and Disadvantages The shipping container has increased the efficiency of transporting goods across the globe. It has allowed companies to explore and expand into, and create larger markets. It has also reduced the costs involved in transporting goods. In many cases before containers were being used, freight costs could account for anything up to 25% of the cost of the goods themselves.

Maersk Line CEO Eivind Kolding, states that the public were unaware of the importance of the industry in putting products on shelves, and at what little cost it was able to do so. According to Kolding, the sea freight element of the landed price of a US$ 700 television set was just $15, while for a kilo of coffee, it was only 15 cents. It has also allowed goods to be transported in a timelier manner. The reduced time taken to load and unload large container ships by using standardised containers has sped up the transfer of goods across continents.

The increased security of placing goods in containers is a distinctive advantage. They are sealed, so tampering is more evident. The cargo stored inside is not visible, so a container might contain computers or cushions. This has reduced pilferage and contributed to cost reduction. They are also very secure against the elements and can deal with the rigours of traversing across the high seas. The disadvantages are that as global trade is on the increase, so is the size of the container ships plying our seas. They can only dock at certain sea ports able to take the capacity and size.

This can mean time delays as feeder vessels wait to be loaded when the larger ships have been unloaded. This also means that you can by tied to shipping timetables and can only receive goods on particular days. There are hazards involved as containers are increasingly being used to smuggle contraband and therefore the need for containers to be scanned and searched adds delays. There is also the risk of loss at sea. Containers sometimes fall overboard during storms and rough seas. The Future for Container Shipping As container ships get bigger and bigger the number of container ports that can accommodate them become fewer and fewer.

In Europe pressure on infrastructure and huge growth in Eastern Europe has put tremendous strain on certain ports to cope with demand. Drewry Shipping consultants predicted that from the third quarter of 2007 to 2011, the number of 10,000-TEU ships will increase from 6 to 152. These ships will mostly operate on the Far East to Europe shipping lanes to reflect predicted growth forecasts. Drewry Shipping forecast that global container capacity demand would outstrip supply by 2012, with world container capacity reaching 773m TEU’s, while global traffic reaches 774m TEU’s, based on annual 9. % growth. The global recession managed to upset all the normal relationships in the container industry. Continued uncertainty in the wider economic environment means that retailers and major importers are unsure of even their short-term inventory requirements.

Until these patterns return to some form of normality, whatever that is, the supply/demand balance will continue to be difficult to forecast. Container volumes have been surprisingly strong in the first seven months of the year and we have upgraded our 2010 global growth forecast to 10. %. This would indicate that global trade has made a surprisingly speedy recovery from 2009 and this has allowed ocean carriers to re-deploy laid-up tonnage and work new builds into their core east-west services with relatively few problems. The European Directorate-General for Energy and Transport has come up with the idea of the Motorways of the Sea. The aim is to move more freight by sea to free up the continental road network. It is more economical and more environmentally friendly to move freight by sea.

For example, the sea route from Spain/ Portugal to Ireland is 600 to1200 kms shorter than truck journeys through France and England. By increasing the shipping services on this route this would reduce the congestion on the road network. The European Union has identified four key corridors to become the Motorways of the Sea: The Baltic Sea, Western Europe( Atlantic Ocean- North/ Irish Sea), South-Western Europe( western Mediterranean), and south-eastern Europe( Adriatic, Ionian and eastern Mediterranean Seas). Conclusion Containerisation has revolutionised global trade.

It allows a company to load its goods at its own premises and transport the goods door-to-door to the buyer’s place of business without being handled, other than loading and unloading of the container itself. It reduces the risk of damage to the goods due to decreased handling and reduces pilferage due to decreased visibility of the goods being shipped. It has reduced the costs involved in shipping to overseas markets and allows us to enjoy fresh fruit from exotic locations and the latest in electronic equipment from the Far East at a fraction of the cost they once were. There are over 4,000 container ships afloat around the world.

They have the capacity to carry several large warehouses worth of goods, which makes every journey very efficient. They are the most energy efficient and environmentally friendly way to transport goods and carry an estimated 85-90% of the world’s cargo between countries. They truly are one of the twentieth century’s most important inventions and revolutionised the way we conduct our business today and into the future.