Understand The Elements of The Container Shipping Industry
In order for investors to appreciate all the advantages of container investing, it is important for them to gain an understanding of how the container shipping industry operates, as well as what the key elements of the sector are.
From the cargo containers to the container ships, and then on to the container terminals, investors will see what contributions the industry makes and what a great investment the container shipping sector can be.
TEU Shipping Containers
With regards to the international shipping industry, a “container” or “shipping container” predominately refers to a container designed to be transported from one mode of transportion to another without unloading and reloading, a.k.a an intermodal freight container.
In recent years, container leasing investments have become increasingly popular with investors seeking to profit from container shipping lines looking to lower their operational costs and overhead.
A twenty-foot equivalent unit, often called a TEU, is “an inexact unit of cargo capacity” — meaning it cannot be converted precisely into other units. TEU is predominately used to describe the capacity of container ships and container terminals. Additionally, there is a standard container with the same width but a doubled length of forty feet. This unit is called a 40-foot container, which equals one forty-foot equivalent unit or FEU.
Although shipping containers are primarily made of steel, other materials such as aluminum, fiberglass or plywood are also used in their construction.
Container Ships
Container ships are cargo ships that provide for the commercial transport of the intermodal freight containers mentioned above. In 1951, the first purpose-built container vessels began operating between Seattle and Alaska U.S.A. The first commercially successful container ship was the Ideal X, a T2 tanker owned by Malcom McLean.
On its first voyage, on April 26, 1956, the vessel carried 58 metal containers between Newark, New Jersey and Houston, Texas U.S.A.
Nowadays container ships fall into one of seven (7) size categories:
- Small Feeder
- Feeder
- Feedermax,
- Panamax
- Post-Panamax
- New Panamax
- Ultra-Large
Container Terminals
A maritime container terminal is a facility where shipping containers are transshipped between different transport vehicles. The transshipment of this cargo is predominately done between container ships and vehicles, like trains or trucks.
Port Newark-Elizabeth on the Newark Bay in the Port of New York and New Jersey became the world’s first container terminal when the Ideal X (mentioned above) was rigged to use standardized cargo containers that were stacked and then unloaded to a compatible truck chassis. Following the success of Malcom McLean, the Port Authority of New York and New Jersey opened the world’s first container port — Elizabeth Marine Terminal, on August 15, 1962.
Generally speaking, maritime container terminals are part of a larger port, and the biggest maritime container terminals are strategically located around major harbors, like the Victoria harbor and the port of Hong Kong.
More Investment Needed
Although containerization, and globalization, have caused a revolution in the world of shipping, their introduction has created the need for investments to accommodate economic growth around the world. Ports, railway companies, and logistics companies have voiced their concern about the enormous investment needed to develop their facilities and infrastructure, so that the world’s largest container ships can visit, and also to ensure the efficient movement of shipping containers on land; whether that be by rail or road.
To help meet the rising demands on facilities, shipping industry giants like APM Terminals and the CMA CGM Group are demonstrating their commitment and are making sizable investments to ensure prosperity and economic growth continues.
