Containerization is a system of intermodal freight transport using intermodal containers (also called shipping containers and ISO containers). The containers have standardized dimensions. They can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to another—container ships, rail transport flatcars, and semi-trailer trucks—without being opened. The handling system is completely mechanized so that all handling is done with cranes and special forklift trucks. All containers are numbered and tracked using computerized systems.
Containerization originated several centuries ago but was not well developed or widely applied until after World War II, when it dramatically reduced the costs of transport, supported the post-war boom in international trade, and was a major element in globalization. Containerization did away with the manual sorting of most shipments and the need for warehousing. It displaced many thousands of dock workers who formerly handled break bulk cargo. Containerization also reduced congestion in ports, significantly shortened shipping time and reduced losses from damage and theft.
The main advantages of containerization are:
Standard transport product that can be handled anywhere in the world (ISO standard) through specialized modes (ships, trucks, barges and wagons) and equipment. Each container has an unique identification number and a size type code.
Can be used to carry a wide variety of goods such as commodities (coal, wheat), manufactured goods, cars, refrigerated (perishable) goods. There are adapted containers for dry cargo, liquids (oil and chemical products) and refrigerated cargo. Discarded containers can be recycled and reused for other purposes.
Lower transport costs due to the advantages of standardization. Moving the same amount of break-bulk freight in a container is about 20 times less expensive than conventional means. The containers enables economies of scale at modes and terminals that were not possible through standard break-bulk handling.
Transshipment operations are minimal and rapid and port turnaround times have been reduced from 3 weeks to about 24 hours. Containerships are faster than regular freighter ships, but this advantage is undermined by slow steaming.
The container is its own warehouse, protecting the cargo it contains. This implies simpler and less expensive packaging for containerized cargoes, particularly consumption goods. The stacking capacity on ships, trains (doublestacking) and on the ground (container yards) is a net advantage of containers.
(vi) Security and safety
The contents of the container is unknown to carriers since it can only be opened at the origin (seller/shipper), at customs and at the destination (buyer). This implies reduced spoilage and losses (theft).
Drawbacks of containerization:
(i) Site Constrains
Containers are a large consumer of terminal space (mostly for storage), implying that many intermodal terminals have been relocated to the urban periphery. Draft issues at port are emerging with the introduction of larger containerships, particularly those of the post-panamax class. A large post-panamax containerships requires a draft of at least 13 meters.
(ii) Capital intensiveness
Container handling infrastructures and equipment (giant cranes, warehousing facilities, inland road, rail access) are important capital investments that require readily sources. Further, the push towards automation is increasing the capital intensiveness of intermodal terminals.
Complexity of arrangement of containers, both on the ground and on modes (containerships and double-stack trains). Restacking difficult to avoid and incurs additional costs and time for terminal operators. The larger the mode or the yard, the more complex the management.
Many containers are moved empty (20% of all flows). However, either full or empty, a container takes the same amount of space. The observed divergence between production and consumption at the global level requires the repositioning of containerized assets over long distances (transoceanic).
(v) Theft and Losses
High value goods and a load unit that can forcefully opened or carried away (on truck) implied a level of cargo vulnerability between a terminal and the final destination. About 1,500 containers are lost at sea each year (fall overboard), but these figures vary substantially depending on if a specific incident takes place on any given year.
(vi) Illicit Trade
The container is an instrument used in the illicit trade of goods, drugs and weapons, as well as for illegal immigration (rare). There are concerns about the usage of containers for terrorism but no documented use has emerged.