Shipping Containers – The humble hero
Containers have been more important for globalisation than freer trade
THE humble shipping container is a powerful antidote to economic pessimism and fears of slowing innovation. Although only a simple metal box, it has transformed global trade. In fact, new research suggests that the container has been more of a driver of globalisation than all trade agreements in the past 50 years taken together.
Containerisation is a testament to the power of process innovation. In the 1950s the world’s ports still did business much as they had for centuries. When ships moored, hordes of longshoremen unloaded “break bulk” cargo crammed into the hold. They then squeezed outbound cargo in as efficiently as possible in a game of maritime Tetris. The process was expensive and slow; most ships spent much more time tied up than plying the seas. And theft was rampant: a dock worker was said to earn “$20 a day and all the Scotch you could carry home.”
Containerisation changed everything. It was the brainchild of Malcom McLean, an American trucking magnate. He reckoned that big savings could be had by packing goods in uniform containers that could easily be moved between lorry and ship. When he tallied the costs from the inaugural journey of his first prototype container ship in 1956, he found that they came in at just $0.16 per tonne to load—compared with $5.83 per tonne for loose cargo on a standard ship. Containerisation quickly conquered the world: between 1966 and 1983 the share of countries with container ports rose from about 1% to nearly 90%, coinciding with a take-off in global trade (see chart).
[Read more: http://www.economist.com/news/finance-and-economics/21578041-containers-have-been-more-important-globalisation-freer-trade-humble]
Comments
I view with interest the activity on the high seas, but didn’t go beyond. A great article.
The standardization of the containers also made it possible for shippers to maximize the space within the containers, thereby minimizing freight costs.
The concept described in the article is called “Intermodal” – Door-to-Door Service in a container. From origin by truck, to rail, to shipping port, to rail or truck, to destination anywhere in the world, efficiently. Closer to home: There is talk of using the Georgetown, Guyana ports for shipment of containers from Manaus, Brazil – a shorter and more efficient distance than, say, to Rio de Janeiro. This will open possibilities for rail service from Manaus to Georgetown, and upgraded deep-water ports, with container cranes. Guyana was the first country in South America with rail service. I believe the service will return, through necessity. They have already done studies regarding truck and rail service with containers. Short-haul is for trucks. Long-haul is for trains. Over the long-haul trains are more efficient Environmentally: less trucks tearing up the highways, using less fuel, with less pollution, and so on. I suppose we will have a highway from Brazil to Georgetown before the rail service, of course. But, the possibilities for the economic future of Guyana, excite me!!