Benefits of Containerization

The main advantages of containerization are:

1. Standardization

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.

2. Flexibility

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.

3. Costs

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.

4. Velocity

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.

5. Warehousing

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.

6. 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).

The main drawbacks of Containerization are:

1. 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.

2. 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.

3. Stacking

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.

4. Repositioning

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).

5. 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.

6. 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.