The Global Alliance accelerates worldwide commerce, resulting in increased investment and growth. Maybe you’re eating a banana, drinking coffee, or sitting in front of your computer, taking a break from work to read this post. Those items, as well as your smartphone, refrigerator, and nearly every other thing in your home, were most likely put onto a big container in another nation and transported hundreds of kilometers by ship across the ocean before arriving at your door.
Today, an estimated 90% of the world’s products are transported by sea, with 60% of that – including nearly all of your imported fruits, electronics, and appliances – packaged in huge steel containers. The remainder consists primarily of commodities like oil or grains that are put straight into the hull. In all, around US$14 trillion of the world’s goods are stored within a large metal box.
A recent scarcity of these containers is driving up prices and clogging supply systems for thousands of items throughout the world. The circumstance emphasizes the significance of the basic yet vital cargo containers, which resemble Lego blocks floating on the water from a distance.
Trade was there before the container
People have used various sizes of boxes, bags, barrels, and containers to transport products across great distances since the start of business. In 1600 B.C. In Egypt, Phoenicians transported timber, textiles, and glass in sacks through camel-drawn caravans to Arabia. Hundreds of years later, the Greeks utilized amphorae, ancient storage containers, to transport wine, olive oil, and grain aboard triremes that sailed the Mediterranean and adjacent seas to other ports in the region.
Even as commerce evolved, the process of loading and unloading products as they were transported from one mode of transportation to another remained labor-intensive, time-consuming, and costly, in part due to the fact that containers came in a variety of forms and sizes. Containers from a ship, for example, had to be unpacked and repacked onto a boxcar before being transported to a smaller rail car.
Different-sized packages also meant that ship space was wasted, as well as weight and balance concerns. As a result of exposure, goods were more likely to be damaged by handling or stolen.
A trade revolution
During World War II, the United States military began investigating the use of standardized tiny containers to more effectively deliver weapons, explosives, and other material to the front lines.
However, it wasn’t until the 1950s that Malcolm McLean, an American entrepreneur, realized that by standardizing the size of containers used in global trade, ship and train loading and unloading could be at least partially automated, allowing for a seamless transition from one mode of transportation to another. This allows items to remain in their containers from the moment of manufacturing through delivery, resulting in lower labor and potential damage expenses.
McLean invented the standard shipping container in 1956, and it is still widely used today. He began with a length of 33 feet – which was soon enlarged to 35 feet – and dimensions of 8 feet broad and tall.
The cost of loading and unloading a ship was significantly lowered by this technique.
In 1956, Manually loading a ship cost $5.86 per ton; with the standardized container, that cost dropped to 16 cents per ton. Because containers are built of sturdy steel and stay secured throughout shipment, they make it considerably easier to safeguard cargo from the elements or pirates.
During the Vietnam War, the United States made extensive use of this invention to send supplies to soldiers, who occasionally utilized the containers as shelters.
A “20-foot-equivalent container unit,” or TEU, is a measurement of 20 feet long, eight feet wide, and nine feet tall, which is the standard container size today. There are a variety of sizes available, such as 40 feet long or somewhat taller, but they all have the same width. One of the primary benefits is that no matter what size a ship is, they all fit perfectly together with practically no vacant areas, much like Lego pieces.
This breakthrough enabled the present globalized world to exist. Containerized cargo increased from 102 million metric tons in 1980 to over 1.83 billion metric tons in 2017. The majority of container traffic travels across the Pacific Ocean or between Europe and Asia.
Ships get massive
Standardization of container sizes has also resulted in an increase in ship size. The more containers that are loaded into a ship, the more money a shipping business may make on each voyage.
In fact, the average size of a container ship has more than doubled in only the last 20 years. The biggest ships on the ocean today can handle 24,000 containers, which is equivalent to the carrying capacity of a 44-mile-long freight train. The Ever Given, the ship that snarled Suez Canal traffic for over a week in March 2021, had a comparable capacity of 20,000 containers.
Consider this: the usual pre-pandemic cost of moving a 20-foot container containing more than 20 tons of cargo from Asia to Europe was roughly the same as an economy ticket to fly the same distance.
Cost of success
However, as the Ever Given event demonstrated, the increasing size of ships comes at a cost. Maritime shipping has become increasingly essential to global supply networks and trade, but it was mostly unseen until the Suez Canal became clogged and blocked. Strong gusts pushed the Ever Given to the bank as it made its journey along the 120-mile canal, trapping it in the muck with its 200,000 tons of cargo.
This canal carries around 12% of the world’s maritime traffic. At one time during the blockade, at least 369 ships were stranded on each side of the canal, costing an estimated $9.6 billion per day. This equates to $400 million each hour, or $6.7 million per minute.
Shipyards are continuing to work on bigger container boats, and there is no indication that this trend will change very soon. According to some analysts, ships capable of hauling cargoes 50 percent greater than the Ever Given will be on the open seas by 2030.
In other words, the shipping container is still popular — and in demand – as it has ever been.