Containerization and shipping containers are not something that supply chain managers or a lot of people, think about every time. That is not surprising at all since most of these units are omnipresent, it is very easy to overlook how much these things revolutionized the international trading world.
After containerization was introduced, it has become an essential part of the supply chain infrastructure, and it is worth investing time to investigate all the facts and information behind containerization. Here are the answers to all the questions you did not know you had about containerization, containers, as well as how they make all the products as efficiently as possible.
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What is containerization?
It is a way of using a specialized intermodal unit also known as shipping containers, to move ingredients, parts, finished products and raw materials from one place to another.
Why shipping containers considered as revolutionary?
One of the most critical features of shipping cargo unit is that it is intermodal. It means it can transport products a lot easier using different kinds of transport. Whether the container is being pulled by big trucks, carried by train on railways or shipped halfway around the world on a container ship, standardization makes handling and transporting the units easy and fast.
It means efficiency and cost savings all over the supply chain. Every hour, minutes and seconds saved will translate directly to faster and better transfer of goods, better margins, reduced waste and substantial environmental impact.
Benefits of using intermodal containers
Intermodal units will provide a lot of benefits to different supply chain management or SCM, distributors, logistics companies, retailers, manufacturers and other organizations involved in the international supply chain industry. Benefits include:
They can be loaded and unloaded using mechanized equipment, automated systems or cranes. It is a more efficient and quicker way compared to handling different kinds of irregularly-shaped cargo or shipments
They can quickly be shipped over long distances using trains, ocean vessels or trucks, with minimal time spent on transferring units between different kinds of transports.
They can be transferred without being opened. It significantly minimizes the risk of theft or tampering.
The strong construction of these containers can protect the goods or products inside from any forms of damage, as well as environmental factors.
They are tracked using a unique code, computerized systems or Internet of Things devices, so the supply chain managers will know where the goods are in different parts of the supply chain.
To find out more about SCM, visit https://www.investopedia.com/terms/s/scm.asp.
What are the things that impacts the containerization have on different methods of cargo transportation?
Before containerization, warehouses and ports spend a lot of time sorting, packing, unpacking, consolidating and transferring goods and products. The move to intermodal units hugely reduced the overhead costs involved with handling all the break bulk cargo.
The break bulk cargo was moved between warehouses, transport, factories and final destinations of products piece-by-piece, requiring a vast deal of specialized equipment and workforce. As containerization becomes more and more automated, there will be less and less manual intervention from humans, resulting in hugely-reduced congestion for warehouses, transport and ports?
Logistics and other shipping and distribution businesses became maximized efficiency and leaner, as standardization resulted in less need for expertise and custom equipment. Supply chain management became more efficient, as the handling times and the movement of shipping containers were easier and predictable to manage.
When was this invented?
This system of intermodal freight transport using intermodal containers has existed for many centuries, but there are several significant developments in the past six decades that have popularized it as a way to deliver products and goods all over the world. Some notable milestone includes:
1955 – the development of the first ocean-going and purpose-built container vessel
1965 – In Search Of, or ISO certified standards for the markings and dimensions of the containers
How many containers are being used in today’s world?
More or less 90% of non-bulk and international cargo is moved using shipping cargo units on colossal container ships. All in all, global ocean transport accounts for more or less 60% of all international ocean trade, and the business is worth a staggering seven trillion dollars, more or less.
There are at least two billion metric tons of dry or wet products that are transported in shipping containers every year and the international fleet has a capacity of more or less 20 million standard units. It is estimated that there are around 20 to 25 million shipping vans that are active containers, with five to six million goods are being moved at any given time.
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Any problems that are caused by empty shipping cargo
Usually, cargo should always be full when they are used to transport products or goods. It is the quickest and the most efficient way and can result in lower production costs. The bad news is, because international trade imbalances and other problems, transporting the products when the cargo is full are impossible. It is a big problem for a lot of reasons:
It can cost a lot of money to transport goods using this method, whether empty or full.
It costs a lot of money to transport empty cargo as much as a full one.
Storing cargo, whether full or empty, usually incurs operating costs.
The costs of transporting goods using this method, where it could be reused can be higher compared to the cost of buying a new one.
It can result to empty cargo being salvaged for iron or steel, or used in different ways like house materials.
Other problems include the rise in access charges, lost productivity because of congestion, as well as a wasted workforce that is spent in waiting for access to products.
Because of these problems, the re-positioning of empty shipping cargo is a big issue and can cost shipping lines a lot of money, leasing businesses, as well as the other supply chain companies. More or less 2.5 million twenty-footer units are being stored empty. That handles around 10 % of all units and ports over 20% of all units.