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Containerized Cargo

Stop for a moment and look around you.  In front of your nose might be the aroma of coffee from Sumatra steaming inside a mug made in China.  The table  you are sitting at may be from South America or Canada.  Your clothes could be made of Egyptian cotton.  What do all of these things have in common, other than your life?  Nearly all of them spent some time in a metal box, 20 feet by 8 feet by 9 and a half feet tall – a Twenty foot Equivalent Unit (TEU).

Containerized cargo has changed the world more than any other technology over the last 30 years, maybe or maybe not excluding the internet.  Yet few people stop to consider this phenom and what it means

One TEU, Twenty foot Equivalent Unit

One TEU, Twenty foot Equivalent Unit

The idea is simple– rather than load irregular crates into the hold of a ship, simply make everything square and standard so it can be done with industrial efficiency and a very large crane – saving labor and time that could be spent at sea moving goods.  Every culture since ancient times has had a somewhat standardized shipping container.  The idea of a worldwide standard didn’t take off until it started to become necessary in the 1960s as global trade dramatically increased.

By 1980, there were about 10 million shipments of the Twenty-Foot Equivalent (TEU) box, described above, around the world.  The real benefit of these boxes wasn’t just that they were easy to load into ships, either.  They can be moved directly onto flatbed trains, stacked two containers high, or onto flatbed trucks for more local shipping.  Once you pack the unit it can move door to door with minimal handling in one seamless operation, anywhere in the world. It is a brilliant, if simple concept.

Today, there are 200 million of them moving around the world per year.  By 2020 that is expected to hit 370 million TEU, about 95% of all cargo traversing the planet.

It’s almost impossible to quantify the cost savings that have been realized internationally by this tremendous standardization because trade, as we know it, would probably not exist without them.  There is simply nothing to compare it to.  Nearly everything in your life from a long distance was probably shipped by container because there is no other way to make this incredible amount of trade possible.

The ships that move these goods have become almost impossibly large as the scale of international trade continues to increase.  The limiting factor for many years has been the Panama Canal, making it the standard in ship size – a “Panamax” no more than 950 feet long and 106 feet wide.  That canal is being expanded at a cost of $5.3 billion so that it can handle “New Panamax” ships 1,400 feet by 180 feet.  Beyond that, the next constraint is in the Straits of Malacca in Indonesia, linking the Pacific with the Indian Ocean.  That size, the “Malaccamax”, is 1540 feet long and 200 feet wide – gargantuan vessels that rival most warships.

Double-stacked containers

Double-stacked containers

But the effect has been felt far further inland as well.  Currently, 70% of railroad shipments in the US are done by container, most of them “double stacked” or two units high.  The Canadian Pacific Railroad in particular has been a leader in this shipping, modifying their lines so that they can run nearly the entire length of the nation with double-stacked containers (except on the Short Line through Saint Paul, where the bridges do not have clearance).  Highway bridges are now designed with 16 feet of clearance, taller than the old standard of 14 feet, largely to make sure that the 9.5 foot tall containers on top of a flatbed have plenty of room to make it under safely.  Everything in shipping is now designed around the global standard TEU container, and it drives a lot of our infrastructure development.

Through the tremendous investment in ships, port facilities, bridge clearances and rail stock nearly every nation in the world has transformed itself into an efficient transportation network where just about anything can be shipped anywhere else at the absolute minimum cost in time and money.  Containerized cargo has linked the world in a way that it never has been before.

Globalism as we know it has been made possible by a number of systems that have come into place in the last 30 years.  Some of these are highly glamorized, such as the internet communications systems and financial markets that share information instantly via satellites anywhere in the world.  But none of it would transform the world economy unless, at some point, goods are shipped from one market to the other as efficiently as the information and money moves.

Containerization is not as sexy as the internet, but it is at least as important for making our world what it is.  For better or worse, we are one market that is joined with everyone else scratching to make a living.  The implications of these developments are constantly rippling through world economies in ways that we will only gradually understand.  And it is all thanks to a standardized metal box.

18 thoughts on “Containerized Cargo

  1. The rise of China is certainly a constant news story and trade through containerized shipping is a part of that story. It is instructive to remember that in 1970 there was no trade between the United States and China. As you will recall China closed itself off from the world in the decades after the Communist victory over the nationalists in 1949. China’s had an economic policy of autarky, or self-sufficiency.

    For many decades India also tried to do economic development through indsutrial self-sufficiency also. It mostly didn’t work.

    In 1970s trade with the Soviet Union was supposed to be tied to their good behavior. There was always a question of whether they were behaving well towards Jews or perhaps in Africa. There was also Afghanistan. So trade with the Soviet Union didn’t develop quite as much in the 1980s. The US sold the Soviets a lot of wheat in 1970s. The joke was that they may be communist but they know how to strike a good deal just like a capitalist.

    • Globalism as we know it simply would not have happened without the TEU, for better or worse. My Dad was over in Hong Kong when China first opened up in 1974, and in just 40 years the nation was transformed by it. That could not have happened without the ready made infrastructure of these containers, which came along at about the same time.

  2. I read a book review on this very topic a few years ago. Apparently these is now a robot that can mimic the stocking of shelves which is a great source for labor. Aldi has their own somewhat remarkable version, boxes that contain 2 similar products (like french and italian dressing). One of the huge success stories is how Amazon uses a little robot that zips across huge warehouses and locates goods. I would imagine the day is coming where parking lots and sidewalks could be cleared by autonomous vehicles.
    But we still come back to the question is what are people for, and how do they find meaning and sustenance for their lives and it is significantly through work although the movie elysium may have debunked that. There they had computers/robots that policed the population. Gave rotten medical care to workers and had robotic clerks running government offices. There is a part of me that wonders at the great joy people get from water. My wife swims daily, I bathe with mint bubbles, my daughter takes teenage length showers . Men with fishing and people with their boats.

    • Automation is very much a real thing that will continue to advance. We may use it to make more things in the US and not rely on hand labor, so it does cut both ways. But it implies that worker salaries should be higher and/or workweeks should be shorter to share the benefits across all of society – either that, or we have to consume more. I believe very strongly that once the Baby Boomers exit the workforce there will be upward pressure on wages and we will see a greater sharing of the benefits – mostly through social security payments. https://erikhare.wordpress.com/2013/06/14/a-coming-golden-age-really/

  3. Since hardly anything is made in the US anymore it has to all come from overseas. It is amazing to see the yard up by the fairgrounds where they take these off of the trains. It’s constant trucks coming out one after the other. It must be everything we buy in Minnesota going through there pretty much. I agree that this is amazing and as important as the internet, that’s not an exageration.

    • Yes, just about everything that we consume in the Twin Cities goes through there. It’s amazing. And that is why the St Paul Saints have to move – to expand that yard.

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