Most people, even supply chain managers, don’t think about shipping containers and containerization. This comes as no surprise. Since they are so abundant, it’s easy to overlook how they revolutionized global trade. Many people have wondered if shipping containers are a threat to the worldwide supply chain.
Since the time that containerization was introduced, it has become a critical part of the infrastructure of the supply chain. It is worth taking the time to learn more about the facts regarding containerization.
Below, you will find the answers to the questions you didn’t even know about containerization.
What is Containerization?
Containerization uses special intermodal containers, also known as shipping containers, to transport ingredients, parts, finished products, and even raw materials from one place to another.
What Makes these Containers Revolutionary?
The most important feature of the shipping container is that it can be transported easily through various transport types. It can be pulled by a truck on the road, carrying on the railway on the train. It can even be shipped overseas on a container ship. Standardization makes it fast and easy to handle and transport these containers.
This results in cost and efficiency savings throughout the supply chain. Every minute that is saved translates to faster product transfer, a decrease in waste/environmental impact, and better profit margins.
Benefits of Using Shipping Containers
While many people wonder if shipping containers are a threat to the global supply chain, the truth is they offer many benefits to everyone involved in the chain: retailers, distributors, logistics companies, manufacturers, etc.
Following are some of these benefits:
- Containers are loaded/unloaded using automated systems by cranes and mechanized equipment. This is quicker and more efficient than having to handle oddly-shaped cargo and shipments.
- Containers can be easily transported over long distances via several transport options.
- Containers can be transported without being opened, which decreases the risk of theft or tampering.
- Containers protect the products inside from becoming damaged due to environmental factors.
- Containers can be tracked via unique codes and a computerized system, so that supply chain managers know where specific goods are within the supply chain.
Impact of Containerization on Previous Methods of Cargo Transport
Before containerization, warehouses in ports spent a lot of time unpacking, sorting, packing, and transferring/consolidating goods. Shipping these containers decreased the overhead involved with the handling of “break bulk” cargo.
This cargo was moved piece by piece between factories, warehouses, transport, and final destination; this required specialized equipment and manpower. However, as containerization became automated and less manual intervention was needed, congestion at ports, warehouses, and transport facilities decreased.
Logistics and distribution/shipping businesses increased their efficiency, which meant there was little need for custom experts and equipment. The process became streamlined, and movement/handling was more predictable and easier to manage.
Invention of Containerization
The truth is, containerization has been in existence for centuries. However, over the last 60 years, developments have made this a popular option for transporting goods internationally. These milestones include:
1955: development of first ocean-going container vessel
1968: ISO standards for dimensions/markings of shipping containers
How Much are Containers Used Today?
More than 90% of non-bulk, international cargo is moved in shipping containers. Global ocean container transport is approximately 60% of all world ocean trade.
Do Empty Shipping Containers cause their Issues?
Since containers are the most efficient way to transport goods, containers should always be full. However, due to trade imbalances, it’s impossible to ship only full containers.
This is an issue because
- It costs money to ship almost the same amount whether it’s full or empty.
- Storing containers, whether empty or full, costs money.
- The cost of transporting a container may be higher than the cost of buying a new one.
- This results in empty containers being reused or salvaged for steel.
New Tech within Supply Chain
There is some new tech on the market that could play a significant role in revolutionizing the shipping container industry:
- Artificial Intelligence
- Machine Learning
- Predictive/Prescriptive analytics
- IoT Devices
No matter what happens, containerization is here to stay. If you want more information regarding the safety and security of these boxes, contact Securiteam today. We look forward to helping you!