Containerization Explained

Containerization or containerisation (see spelling differences) is a system of freight transport based on a range of steel intermodal containers (also "shipping containers", "ISO containers" etc.). Containers are built to standardised dimensions, and can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to another—container ships, rail and semi-trailer trucks—without being opened. The system, developed after World War II, led to greatly reduced transport costs, and supported a vast increase in international trade.

History

Origins

Containerisation has its origins in early coal mining regions in England from the late 18th century on. In 1795 Bejamin Outram opened the Little Eaton Gangway upon which coal was carried in wagons built at his Butterley Ironworks. The horse-drawn wheeled wagons on the Gangway took the form of containers, which, loaded with coal, could be transhipped from canal barges on the Derby Canal which Outram had also promoted.[1]

By the 1830s, railroads on several continents were carrying containers that could be transferred to other modes of transport. The Liverpool and Manchester Railway in the United Kingdom was one such. "Simple rectangular timber boxes, four to a wagon, they were used to convey coal from the Lancashire collieries to Liverpool, where they were transferred to horse drawn carts by crane."[2] Originally used for moving coal on and off barges, "loose boxes" were used to containerize coal from the late 1780s, at places like the Bridgewater Canal. By the 1840s, iron boxes were in use as well as wooden ones. The early 1900s saw the adoption of closed container boxes designed for movement between road and rail.

In the United Kingdom, several railway companies were using similar containers by the beginning of the 20th century and in the 1920s the Railway Clearing House standardised the RCH container. Five- or ten-foot-long, wooden and non-stackable, these early standard containers were a great success, but the standard remained UK-specific.

From 1926 to 1947 in the US, the Chicago North Shore and Milwaukee Railway carried motor carrier vehicles and shippers' vehicles loaded on flatcars between Milwaukee, Wisconsin and Chicago, Illinois. Beginning in 1929, Seatrain Lines carried railroad boxcars on its sea vessels to transport goods between New York and Cuba.[3] In the mid-1930s, the Chicago Great Western Railway and then the New Haven Railroad began "piggy-back" service (transporting highway freight trailers on flatcars) limited to their own railroads. By 1953, the CB&Q, the Chicago and Eastern Illinois and the Southern Pacific railroads had joined the innovation. Most cars were surplus flatcars equipped with new decks. By 1955, an additional 25 railroads had begun some form of piggy-back trailer service.

During World War II the Australian Army used containers to help overcome the various breaks of gauge. These non-stackable containers were about the size of the later 20 foot ISO container and perhaps made mainly of wood.[4]

The break of gauge station at Kidatu in Tanzania is well suited to ISO containers.

In 1955, former trucking company owner Malcom McLean worked with engineer Keith Tantlinger to develop the modern intermodal container. The challenge was to design a shipping container that could efficiently be loaded onto ships and held securely on long sea voyages. The result was a 8feet tall by 8feet wide box in 10feet-long units constructed from 2.5mm thick corrugated steel. The design incorporated a twistlock mechanism atop each of the four corners, allowing the container to be easily secured and lifted using cranes. After helping McLean make the successful design, Tantlinger convinced him to give the patented designs to the industry; this began international standardization of shipping containers.[5]

Toward the end of World War II, the United States Army used specialized containers to speed the loading and unloading of transport ships. The army used the term "transporters" to identify the containers, for shipping household goods of officers in the field. A "transporter" was a reusable container, 8.5feet long, 6.25feet wide, and 6.83feet high, made of rigid steel with a carrying capacity of 9,000 pounds. During the Korean War the transporter was evaluated for handling sensitive military equipment and, proving effective, was approved for broader use. Theft of material, damage to wooden crates, and prolonged handling time by longshoremen at the Port of Busan, convinced the army that steel containers were needed. In 1952 the army began using the term CONEX, short for "Container Express". The first major shipment of CONEXes, containing engineering supplies and spare parts, was made by rail from the Columbus General Depot in Georgia to the Port of San Francisco, then by ship to Yokohama, Japan, and then to Korea, in late 1952; shipment times were almost halved. By the time of the Vietnam War the majority of supplies and materials were shipped with the CONEX. After the U.S. Department of Defense standardized an 8'×8' cross section container in multiples of 10' lengths for military use, it was rapidly adopted for shipping purposes.[6] [7]

These standards were adopted in the United Kingdom for containers, and largely displaced wooden containers in the 1950s. The railways of the USSR had their own small containers.[8]

Purpose-built ships

See main article: Container ship. The first vessels purpose-built to carry containers began operation in Denmark in 1951. In the U.S., ships began carrying containers in 1951, between Seattle and Alaska. The world's first intermodal container system used the purpose-built container ship the Clifford J. Rodgers, built in Montreal in 1955 and owned by the White Pass and Yukon Route. Its first trip carried 600 containers between North Vancouver, British Columbia and Skagway, Alaska, on November 26, 1955; in Skagway, the containers were unloaded to purpose-built railroad cars for transport north to the Yukon, in the first intermodal service using trucks, ships and railroad cars. Southbound containers were loaded by shippers in the Yukon and moved by rail, ship and truck to their consignees, without opening. This first intermodal system operated from November 1955 for many years.

The U.S. container shipping industry dates to April 26, 1956, when trucking entrepreneur McLean put 58 containers aboard a refitted tanker ship, the Ideal-X, and sailed them from Newark to Houston.[9] What was new in the USA about McLean's innovation was the idea of using large containers that were never opened in transit between shipper and consignee and that were transferable on an intermodal basis, among trucks, ships and railroad cars. McLean had initially favored the construction of "trailerships"—taking trailers from large trucks and stowing them in a ship’s cargo hold. This method of stowage, referred to as roll-on/roll-off, was not adopted because of the large waste in potential cargo space onboard the vessel, known as broken stowage. Instead, McLean modified his original concept into loading just the containers, not the chassis, onto the ships, hence the designation container ship or "box" ship.[10] [11] (See also pantechnicon van and trolley and lift van.)

Towards standards

During containerization's first 20 years, many container sizes and corner fittings were used; there were dozens of incompatible container systems in the U.S. alone. Among the biggest operators, the Matson Navigation Company had a fleet of 24feet containers while Sea-Land Service, Inc used 35feet containers. The standard sizes and fitting and reinforcement norms that now exist evolved out of a series of compromises among international shipping companies, European railroads, U.S. railroads, and U.S. trucking companies. Four important ISO (International Organization for Standardization) recommendations standardized containerization globally[12]

In the United States, containerization and other advances in shipping were impeded by the Interstate Commerce Commission (ICC), which was created in 1887 to keep railroads from using monopolist pricing and rate discrimination but fell victim to regulatory capture. By the 1960s, ICC approval was required before any shipper could carry different items in the same vehicle, or change rates. The United States' present fully integrated systems became possible only after the ICC's regulatory oversight was cut back (and abolished in 1995); trucking and rail were deregulated in the 1970s and maritime rates were deregulated in 1984.[13]

Double-stack rail transport, where containers are stacked two high on railway cars, was introduced in 1984, with the first use in the United States.

Effects

Containerization greatly reduced the expense of international trade and increased its speed, especially of consumer goods and commodities. It also dramatically changed the character of port cities worldwide. Prior to highly mechanized container transfers, crews of 20-22 longshoremen would pack individual cargoes into the hold of a ship. After containerization, large crews of longshoremen were no longer necessary at port facilities and the profession changed drastically.

Meanwhile the port facilities needed to support containerization changed. One effect was the decline of some ports and the rise of others. At the Port of San Francisco, the former piers used for loading and unloading were no longer required, but there was little room to build the vast holding lots needed for container transport. As a result the Port of San Francisco virtually ceased to function as a major commercial port, but the neighboring port of Oakland emerged as the second largest on the West Coast of America. A similar fate met the relation between the ports of Manhattan and New Jersey. In the UK, longshoremen's unions protested the change to containerization, resulting in the elimination of London and Liverpool as major ports. Meanwhile, Britain's Felixstowe and Rotterdam in the Netherlands emerged as major ports. In general, inland ports on waterways incapable of deep draft ship traffic also declined from containerization in favor of seaports. With intermodal containers, the job of sorting and packing containers could be performed far from the point of embarcation.

Twenty-first century

approximately 90% of non-bulk cargo worldwide is moved by containers stacked on transport ships; 26% of all container transhipment is carried out in China.[14] For example in 2009 there were 105,976,701 transhipments in China (both international and coastal; excluding Hong Kong), 21,040,096 in Hong Kong (which is listed separately), and only 34,299,572 in the United States. In 2005 some 18 million containers made over 200 million trips per year. Some ships can carry over, for example the Emma Mærsk, 396 m long, launched August 2006. It has been predicted that, at some point, container ships will be constrained in size only by the depth of the Straits of Malacca, one of the world's busiest shipping lanes, linking the Indian Ocean to the Pacific Ocean. This so-called Malaccamax size constrains a ship to dimensions of 470m (1,540feet) in length and 60m (200feet) wide.[11]

However, few initially foresaw the extent of the influence of containerization on the shipping industry. In the 1950s Harvard University economist Benjamin Chinitz predicted that containerization would benefit New York by allowing it to ship its industrial goods more cheaply to the Southern United States than other areas, but did not anticipate that containerization might make it cheaper to import such goods from abroad. Most economic studies of containerization merely assumed that shipping companies would begin to replace older forms of transportation with containerization, but did not predict that the process of containerization itself would have a more direct influence on the choice of producers and increase the total volume of trade.[11]

The widespread use of ISO standard containers has driven modifications in other freight-moving standards, gradually forcing removable truck bodies or swap bodies into standard sizes and shapes (though without the strength needed to be stacked), and changing completely the worldwide use of freight pallets that fit into ISO containers or into commercial vehicles.

Improved cargo security is also an important benefit of containerization. The cargo is not visible to the casual viewer and thus is less likely to be stolen; the doors of the containers are usually sealed so that tampering is more evident. Some containers are fitted with electronic monitoring devices and can be remotely monitored for changes in air pressure, which happens when the doors are opened. This reduced the thefts that had long plagued the shipping industry.

Use of the same basic sizes of containers across the globe has lessened the problems caused by incompatible rail gauge sizes in different countries. The majority of the rail networks in the world operate on a gauge track known as standard gauge, but many countries (such as Russia, India, Finland, and Lithuania) use broader gauges, while many others in Africa and South America use narrower gauges on their networks. The use of container trains in all these countries makes trans-shipment between different gauge trains easier.

Containers have become a popular way to ship private cars and other vehicles overseas using 20 or 40 ft containers. Unlike roll-on/roll-off vehicle shipping, personal effects can be loaded into the container with the vehicle, allowing for easy international relocation.

Container standards

ISO standard

See main article: Intermodal container.

There are five common standard lengths, 20-ft (6.1 m), 40-ft (12.2 m), 45-ft (13.7 m), 48-ft (14.6 m), and 53-ft (16.2 m). United States domestic standard containers are generally 48feet and 53-ft (rail and truck). Container capacity is often expressed in twenty-foot equivalent units (TEU, or sometimes teu). An equivalent unit is a measure of containerized cargo capacity equal to one standard 20 ft (length) × 8 ft (width) container. As this is an approximate measure, the height of the box is not considered, for instance the 9 ft 6 in (2.9 m) High cube and the 4-ft 3-in (1.3 m) half height 20feet containers are also called one TEU.

The maximum gross mass for a 20feet dry cargo container is 24,000 kg, and for a 40-ft (including the 2.87 m (9 ft 6 in) high cube container), it is 30,480 kg. Allowing for the tare mass of the container, the maximum payload mass is therefore reduced to approximately 22,000 kg for 20feet, and 27,000 kg for 40feet containers.[15]

The original choice of 8feet height for ISO containers was made in part to suit a large proportion of railway tunnels, though some had to be modified. With the arrival of even taller containers, further enlargement is proving necessary.[16]

Air freight containers

See main article: Unit load device.

While major airlines use containers that are custom designed for their aircraft and associated ground handling equipment the IATA has created a set of standard aluminium container sizes of up to 11.52m2 in volume.

Other container system standards

Some other container systems (in date order) are:

Container loading

Full container load

A Full Container Load (FCL) is an ISO standard container that is loaded and unloaded under the risk and account of one shipper and only one consignee, in practice it means that the whole container is intended for one consignee. FCL container shipment attracts lower freight rates than an equivalent weight of cargo in bulk.Ideally FCL means the container is loaded to its allowable maximum weight or volume. In practice, the FCL in the ocean freight does not always mean packing a container to its full payload or full capacity.

Less than container load

Less than container load (LCL) is a shipment that is not large enough to fill a standard cargo container. The abbreviation LCL formerly applied to "Less than (railway) Car Load" for quantities of material from different shippers or for delivery to different destinations which might be carried in a single railway car for efficiency. LCL freight was often sorted and redistributed into different railway cars at intermediate railway terminals en-route to the final destination.[30]

Less Than Carload or Less Than Container Load is "a quantity of cargo less than that required for the application of a carload rate. A quantity of cargo less than that fills the visible or rated capacity of an inter-modal container." It can also be defined as "a consignment of cargo which is inefficient to fill a shipping container. It is grouped with other consignments for the same destination in a container at a container freight station".[31]

A system of transportation used in international trade, where various shippers pool their boxed goods in the same container.

Issues

Additional fuel costs

Containerization increases the fuel costs and reduces the capacity of the transport as the container itself, in addition to its contents, must be transported; stackable standardised containers are usually heavier than packaging with less stringent requirements. For certain bulk products this makes containerization unattractive. However, for most goods the increased fuel costs and decreased transport efficiencies are more than offset by the savings in handling costs. On railways the maximum weight of the container is far from the railcar's maximum weight capacity, and the ratio of goods to railcar is much lower than in a break-bulk situation. In some areas (mostly the USA, Canada and India) containers can be carried double stacked by rail, but this is usually not possible in other rail systems.

Hazards

Containers have been used to smuggle contraband. The vast majority of containers are never subjected to scrutiny due to the large number of containers in use. In recent years there have been increased concerns that containers might be used to transport terrorists or terrorist materials into a country undetected. The U.S. government has advanced the Container Security Initiative (CSI), intended to ensure that high-risk cargo is examined or scanned, preferably at the port of departure.

Empty containers

Containers are intended to be used constantly, being loaded with new cargo for a new destination soon after having been emptied of previous cargo. This is not always possible, and in some cases, the cost of transporting an empty container to a place where it can be used is considered to be higher than the worth of the used container. Shipping lines and Container Leasing Companies have become expert at repositioning empty containers from areas of low or no demand, such as the US West Coast, to areas of high demand such as China. However, damaged or retired containers may also be recycled in the form of shipping container architecture, or the steel content salvaged. In the summer of 2010, a world wide shortage of containers developed as shipping increased post-recession, while new container production had largely ceased.[32]

Loss at sea

Containers occasionally fall from the ships, usually during storms; between 2,000[33] and 10,000 containers are lost at sea each year.[34] For instance, on November 30, 2006, a container washed ashore[35] on the Outer Banks of North Carolina USA, along with thousands of bags of its cargo of Doritos Chips. Containers lost in rough waters are smashed by cargo and waves and often sink quickly.[33] Although not all containers sink, they seldom float very high out of the water, making them a shipping hazard that is difficult to detect. Freight from lost containers has provided oceanographers with unexpected opportunities to track global ocean currents, notably a cargo of Friendly Floatees.[36]

In 2007 the International Chamber of Shipping and the World Shipping Council began work on a code of practice for container storage, including crew training on parametric rolling, safer stacking, the marking of containers and security for above-deck cargo in heavy swell.[37] [38]

In 2011, the MV Rena ran aground off the coast of New Zealand. As the ship listed, some containers were lost, while others were held on board at a precarious angle.

Trade union challenges

Some of the biggest battles in the container revolution were waged in Washington, D.C. Intermodal shipping got a huge boost in the early 1970s when carriers won permission to quote combined rail-ocean rates. Later, non-vessel-operating common carriers won a long court battle with a U.S. Supreme Court decision against contracts that attempted to require that union labor be used for stuffing and stripping containers at off-pier locations.[39]

Other uses for containers

Shipping container architecture is the use of containers as the basis for housing and other functional buildings for people, either as temporary or permanent housing, and either as a main building or as a cabin or workshop. Containers can also be used as sheds or storage areas in industry and commerce.

Containers are also beginning to be used to house computer data centers, although these are normally specialized containers.

BBC tracking project

See main article: The Box (BBC container). On September 5, 2008 the BBC embarked on a year-long project to study international trade and globalization by tracking a shipping container on its journey around the world.[40] [41]

See also

Further reading

Notes and References

  1. Ripley, David (1993). The Little Eaton Gangway and Derby Canal (Second ed.). Oakwood Press. ISBN 0-85361-431-8.
  2. Essery, R. J, Rowland. D. P. & Steel W. O. British Goods Wagons from 1887 to the Present Day. Augustus M. Kelly Publishers. New York USA. 1979 Page 92
  3. Seatrain: Railroad or steamship line?, Robert E. Mohowski, Classic Trains, Spring 2011, pp. 64-73
  4. With Iron Rails p8.26 by David Burke 1988, SRANSW
  5. The Box that Changed Britain. McGough, Roger (Narrator), McAulay, Graeme (Director & Producer), Crossley-Holland, Dominic (Executive Producer). documentary. BBC4. BBC. 2010.
  6. http://www.transchool.eustis.army.mil/museum/CONEX.htm "History & Development of the Container"
  7. http://www.dtic.mil/doctrine/jel/doddict/acronym/c/01190.html CONEX
  8. Web site: Photos of containers in Baku. Freespace.virgin.net. 1999-03-09. 2011-11-28.
  9. Book: Marc Levinson. The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. Princeton Univ. Press. 2006. 0-691-12324-1. 1.
  10. Cudahy, Brian J., "The Containership Revolution: Malcom McLean’s 1956 Innovation Goes Global". TR News. (c/o National Academy of Sciences). Number 246. September–October 2006. (Adobe Acrobat *.PDF document)
  11. Levinson (2006), The Box.
  12. Rushton, A., Oxley, J., Croucher, P. (2004). The Handbook of Logistics and Distribution Management. Kogan Page: London.
  13. News: Postrel. Virginia. The Box that Changed the World. Dynamist.com. 2006-03-23. 2008-02-14.
  14. Web site: Container port traffic (TEU: 20 foot equivalent units) | Data | Table. Data.worldbank.org. 2011-11-28.
  15. Web site: Shipping containers. Emase. 2007-02-10.
  16. http://railwaysafrica.com/index.php?option=com_content&task=view&id=3493&Itemid=36
  17. News: ENGINEERING.. The Argus (Melbourne, Vic. : 1848 - 1956). Melbourne, Vic.. 16 February 1922. 25 October 2011. 11. National Library of Australia.
  18. News: FREIGHT HANDLING.. The West Australian (Perth, WA : 1879 - 1954). Perth, WA. 30 July 1925. 29 October 2011. 4. National Library of Australia.
  19. News: NEW TRANSPORT METHOD.. Examiner (Launceston, Tas. : 1900 - 1954). Launceston, Tas.. 7 June 1929. 25 October 2011. 11 Edition: DAILY. National Library of Australia.
  20. News: COMMERCIAL.. The Sydney Morning Herald (NSW : 1842 - 1954). NSW. 13 May 1929. 26 October 2011. 13. National Library of Australia.
  21. News: RAILWAY CONTAINERS.. The Sydney Morning Herald (NSW : 1842 - 1954). NSW. 2 January 1936. 27 October 2011. 9. National Library of Australia.
  22. News: THE COUNTRY PAGE.. The Argus (Melbourne, Vic. : 1848 - 1956). Melbourne, Vic.. 12 December 1928. 27 October 2011. 26. National Library of Australia.
  23. News: THROUGH ROAD, RAIL AND WATER TRAFFIC.. Morning Bulletin (Rockhampton, Qld. : 1878 - 1954). Rockhampton, Qld.. 26 April 1929. 28 October 2011. 10. National Library of Australia.
  24. News: NEW RAILWAY CONTAINER.. The Sydney Morning Herald (NSW : 1842 - 1954). NSW. 8 September 1930. 25 October 2011. 11. National Library of Australia.
  25. News: INTERNATIONAL CONTAINER.. The Sydney Morning Herald (NSW : 1842 - 1954). NSW. 31 December 1931. 26 October 2011. 9. National Library of Australia. ICC
  26. News: INTERNATIONAL CONTAINER BUREAU.. The Sydney Morning Herald (NSW : 1842 - 1954). NSW. 18 April 1933. 27 October 2011. 13. National Library of Australia.
  27. News: New Freight Containers For S.E. Railway Services.. The Advertiser (Adelaide, SA : 1931 - 1954). Adelaide, SA. 23 April 1936. 26 October 2011. 19. National Library of Australia.
  28. News: MILK BUSINESS.. Cairns Post (Qld. : 1909 - 1954). Qld.. 14 February 1946. 26 October 2011. 4. National Library of Australia.
  29. http://www.k-tainer.eu/en/container-trading/standard-container Containertrading - Standard Container
  30. Book: This Fascinating Railroad Business. Henry, Robert Selph. The Bobs-Merrill Company. 1942. 319–321.
  31. Web site: KNOW NET 2: The Federal Logistics SuperSite - The Federal Transportation Management Desk Reference: Glossary - Definitions.
  32. Web site: Posted on Thu, Aug 19, 2010 @ 05:03 PM. Shipping Container Shortage Pushing Up Prices. Universalcargo.com. 2010-08-19. 2011-11-28.
  33. http://www.ttclub.com/TTCLUB/PubArc.nsf/D5E4C4B3A805731980256792004C617E/02CE747115C182F780256A6500596BF5?OpenDocument Containers Overboard!
  34. Podsada, Janice. (2001-06-19) 'Lost Sea Cargo: Beach Bounty or Junk?', National Geographic News.http://news.nationalgeographic.com/news/2001/06/0619_seacargo.html Retrieved 2007-04-17
  35. Web site: © November 30, 2006. Photos: Spilled Doritos chips wash up on Outer Banks | HamptonRoads.com | PilotOnline.com. HamptonRoads.com. 2006-11-30. 2011-11-28.
  36. http://www.cbsnews.com/stories/2003/07/31/eveningnews/main566138.shtml "Rubber Duckies Map The World"
  37. Murdoch & Tozer. A Master’s guide to Container Securing Lloyd's Register & Standard P&I Club. Accessed: 26 February 2011.
  38. News: Banana box slip a worry. Lloyd's List Daily Commercial News. Informa Australia. 2008-02-07. 2008-02-14.
  39. Web site: 854 F.2d 1338, 129 L.R.R.M. (BNA) 2001, 1988 A.M.C. 2409, 272 U.S.App.D.C. 129, 57 USLW 2147, 109 Lab.Cas. P 10,681, NEW YORK SHIPPING ASSOCIATION, INC., International Longshoremen's Association, AFL-CIO, Council of North Atlantic Shipping Associations, Atlantic Container Line, Ltd., Dart Containerline Company, Limited, Hapag-Lloyd Aktiengesellschaft, "Italia" S.P.A.N., Nedlloyd Lines B.V., Puerto Rico Maritime Shipping Authority, Sea-Land Service, Inc., Trans Freight Lines, Inc., and United States Lines, Inc., Petitioners, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents. NEW YORK SHIPPING ASSOCIATION, INC., et al., Petitioners, v. FEDERAL MARITIME COMMISSION and United States of America, Respondents, American Trucking Assoc., Inc., American Warehousemen's Assoc., West Gulf Maritime Assoc., National Customs Brokers & Forwarders Association of America, Inc., International Association of NVOCCs, et al., Intervenors. Nos. 82-1347, 87-1370. United States Court of Appeals, District of Columbia Circuit. Argued Dec. 17, 1987. Decided Aug. 9, 1988. Ftp.resource.org. 2011-11-28.
  40. News: The Box takes off on global journey. BBC News. 2008-09-08.
  41. Web site: BBC - The Box. 5 September 2008. BBC. 2008-09-05.