Containerization

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Port Congestion Surcharge

The origins of Containerization go back to 18th century where coal traffic in England was handled with some sort of containers (more like wagons) and they were shipped from horse drawn carriages to barges. Originally they were made of timber with rectangular shapes and due to durability reasons, iron replaced timber in terms of raw material around year 1850. The use of standardized equipment like containers revolutionized the design of ships, where new ships were designed to handle maximum capacity of containers and rail systems where rail cars are designed to handle from single to double stack equipments. Various types of containers were used until 1955 where an engineer called Keith Tantlinger first designed the modern day container. It was his design first that utilized the durability of steel as raw material and it included a twistlock mechanism allowing the container to be easily secured and handled during transportation. The original design of a container (it was called “transporter” at that time) was allowed to handle maximum 9,000 lbs and was 8.5 feet in length, compared to modern day equipment this was quite simple but revolutionized the trade and military at that time.

The first vessels to handle this kind of equipment were designed in Denmark around 1950. The maximum capacity was 600 containers and its first voyage was from Vancouver to Alaska. It was this time that the first rail road built to handle containers was utilized in Alaska where shipping, rail and trucking options were all utilized to handle containers. During the first 20 years, there was not a standardization where different sizes and corner fittings were used and this caused many problems in handling of cargo upon arrival. For example, Matson was using 24 foot equipment and Sealand was using 35 foot equipment. Due to global recognition of the technical difficulties in handling, ISO came up with 4 standard recommendations that transformed the industry starting 1968.

Containerization greatly reduced the costs especially for commodities and consumer goods and sped up the process by utilizing all shipping methods from ocean to rail and trucking. It also eliminated a lot of longshoremen jobs at the ports where large crews of longshoremen were no longer needed and the profession changed rapidly. Another part that containerization changed and revolutionized is the optimization systems. Since containers can be utilized continuously once they are delivered to a particular user, it brought the difficulty and solution of designing systems where idle time is kept at minimum and they are moved from one large area to another according to demand. One interesting fact that happened in 2010 is due to increased shipping demand after the recession of 2008 there was a big shortage of containers worldwide and slowly the production is catching up with the demand.

As of this year, approximately 90% of non bulk cargo is moved via containers and 26% of all container transshipments are handled in China. Even though Singapore is a very small country, in 2007 their ports handled over 27 million TEU’s which is almost double the amount handled by port of Los Angeles. Every year between 2000 and 10,000 containers are lost at sea due to accidents, and this is a very small percentage when we compare the total number of containers moved per year. Use of containers also inspired many creative architects and my colleague Lauga wrote a great article about the reuse of old shipping containers on our blog. (Definitely a must read)