A Brief History of the Shipping Container
Take a moment to glance around. Maybe you’re nibbling on an exotic fruit like a banana, savouring a hot cup of coffee, or taking a pause from your work as you sit in front of your computer reading this piece. It’s quite probable that these items, alongside your mobile phone, fridge, and practically everything else in your house, were once packed into a vast container in a foreign country, then journeyed across oceans, covering thousands of miles, before finally landing on your doorstep.
Today, an estimated 90 percent of all goods globally are transported by sea, with a staggering 60 percent of that, including nearly all your imported fruit, tech gadgets, and home appliances, being housed in large steel containers. The remaining 40 percent consists primarily of commodities like oil and grains. In total, about $14 trillion worth of goods across the globe at some point find themselves inside these hefty metal boxes.
To put it simply, our society relies heavily on the global supply chain, which would not be possible without these standardized containers. Recently, a severe shortage of these containers has resulted in increasing costs and disruptions to the supply chains of countless products worldwide. This situation underscores the significance of these seemingly mundane, but essential, cargo containers that, from afar, resemble giant Lego blocks bobbing on the sea.
Trade prior to the era of the container
Since the beginnings of trade, people have used various types of storage vessels – boxes, sacks, barrels and containers of differing sizes – to ship goods over vast distances. As far back as 1600 B.C., the Phoenicians in Egypt transported wood, fabrics, and glass to Arabia using sacks and camel-driven caravans. Centuries later, the Greeks employed ancient storage vessels, known as amphorae, to convey wine, olive oil, and grains on triremes that navigated the Mediterranean and neighbouring seas, delivering goods to various regional ports.
As trade evolved, the process of loading and unloading goods as they were transferred from one transport method to another remained a laborious, time-consuming, and expensive task. This was partly due to the diverse shapes and sizes of the containers. For instance, containers arriving from a ship and destined for a smaller rail car often had to be unpacked and repacked into a boxcar.
The inconsistency in package sizes resulted in inefficient use of space on ships and created weight and balance issues for the vessels. Furthermore, goods were more prone to damage from handling or theft due to their exposure.
The revolution in trade
The concept of using standardized small containers for more efficient transportation of weapons, bombs, and other military materials was first explored by the U.S. military during World War II.
However, it wasn’t until the 1950s that American entrepreneur Malcolm McLean recognised that standardizing the size of the containers used in global trade could greatly improve the efficiency of loading and unloading ships and trains. This could be partially automated, making the transition from one mode of transport to another seamless. This also meant that products could stay in their containers from the point of manufacture to delivery, which led to significant cost savings in terms of labour and potential damage.
In 1956, McLean introduced the standard cargo container, which is essentially the same standard we use today. He initially designed it to be 33 feet long, which was soon increased to 35 feet, and 8 feet wide and tall.
This system dramatically cut the cost of loading and unloading a ship. In 1956, manual loading cost $5.86 per ton; the standardized container slashed that cost to a mere 16 cents a ton. Additionally, containers made protecting cargo from the elements or thieves much easier, as they are constructed from durable steel and remain locked during transport.
The U.S. heavily utilised this innovation during the Vietnam War to transport supplies to soldiers, who, on occasion, even repurposed the containers as makeshift shelters.
Today, the standard container size has settled at 20 feet long, eight feet wide, and nine feet tall, known in the industry as a “Twenty-Foot Equivalent Unit,” or TEU. There are actually a few different standard sizes, such as 40 feet long or slightly taller, but they all maintain the same width. One of the key advantages is that whatever size a ship uses, they all, like Lego blocks, fit neatly together, leaving virtually no wasted space.
This innovation was a game-changer, making the modern, globalised world possible. The quantity of goods transported by containers skyrocketed from 102 million metric tons in 1980 to about 1.83 billion metric tons by 2017. Most of the container traffic flows across the Pacific Ocean or between Europe and Asia.
The rise of the mega-ships
The standardisation of container sizes has also led to an increase in the size of ships. The more containers a ship can carry, the more revenue a shipping company can generate on each voyage.
In fact, the average size of a container ship has doubled over the past 20 years alone. The largest vessels in operation today are capable of carrying 24,000 containers. To put that into perspective, that’s a carrying capacity equivalent to a freight train 44 miles long. Another way to visualise it is with the ship named the Globe, which has a capacity of 19,100 20-foot containers. It could transport 156 million pairs of shoes, 300 million tablet computers, or 900 million cans of baked beans, in case you have an insatiable appetite.
The Ever Given, the infamous ship that blocked the Suez Canal for nearly a week in March 2021, has a similar capacity of 20,000 containers.
In terms of cost, consider this: pre-pandemic, the price of transporting a 20-foot container carrying over 20 tons of cargo from Asia to Europe was roughly equivalent to the cost of an economy class air ticket for the same journey.
The price of success
However, the growing size of ships comes with its own set of challenges, as illustrated by the Ever Given incident.
- Maritime shipping has become increasingly crucial to global supply chains and trade, yet its significance was somewhat overlooked until the Suez Canal was blocked. As the Ever Given navigated the narrow 120-mile canal, powerful gusts of wind blew it onto the bank, and its colossal weight of 200,000 tons got it stuck in the mud.
- About 12 percent of the world’s global shipping traffic passes through this canal. At the height of the blockage, at least 369 ships were stranded, waiting to pass through the canal from either side, costing an estimated $9.6 billion a day. This equates to $400 million an hour, or a staggering $6.7 million a minute.
- Shipbuilding companies continue to strive for ever larger container vessels, and there’s little indication that this trend will cease in the near future. Some experts predict that by 2030, we’ll see ships capable of carrying loads 50 percent larger than the Ever Given’s navigating the open seas.
In summary, the shipping container remains more crucial and in demand than ever before, continuing to play a vital role in our globalised world.