How the humble shipping container has driven globalization and changed the world since 1956
Most people don’t understand or recognize the significance of the humble shipping container. Before shipping containers, all goods were manually loaded into sacks, barrels and wooden creates loaded directly onto cargo vessels — known as break-bulk shipping. It could take up to 3 weeks to unload and load each ship. Today’s massive container ships can be unloaded and loaded within 24 hours, thanks to the advent of the shipping container.
I’m absolutely mesmerized at how this single innovation has transformed the world.
The intermodal shipping container was born back in 1956 by an American entrepreneur Malcolm McLean and has since revolutionized shipping and global trade. For years Malcolm wondered how he could get his trucking company’s entire cargo loaded onto a shipping vessel as quickly and efficiently as possible. He started working with engineer Keith Tantlinger to engineer the world’s first shipping container. It was an incredible invention that eliminated wasted space and cut unloading time by up to 3 weeks. The most significant change is that the shipping container allowed cargo to be seamlessly transported between road, rail and sea.
American entrepreneur Malcolm McLean with his Sea-Land shipping containers.
The world’s first container ship, a converted World War 2 tanker ‘Ideal X’ sailed from the port of Newark to the port of Houston in 1956. It carried 58 shipping containers. Then in 1968 the International Standards Organisation was the catalyst for this invention, they standardized this shipping container as a ‘standard box’. The box was identified as being 20 foot long, 8 foot high and 8 foot wide. From then on ships were then completely re-designed around the dimensions of boxes! Shipping costs plummeted and it now became cheaper to manufacture goods on the other side of the world because shipping became so cheap. Since then it has revolutionized ports, rail networks, ships, cities and countries all over the world. The shipping container has been the single biggest catalyst of globalization.
According to the Economist, “the shipping container has been more of a driver of globalization than all trade agreements in the past 50 years together.”
Today’s modern shipping vessels can carry over 20,000 TEU shipping containers (Twenty-Foot Equivalent Units). There are currently 20 million shipping containers ‘on the water’ travelling between countries all over the world. Most people don’t know it or appreciate it, but today over 90% of purchased items have been transported inside a shipping container.
Today, International Trade faces new challenges to keep up with demand. We now see massive ports and infrastructure in place all over the world, so the problem isn’t getting products shipped from one country to another. The problem is the sheer number of different parties that are involved in each shipment and the number of manual processes involved in the flow of information and documentation between these parties. As the whole world around us has changed significantly over the past 10 years thanks to the digital revolution, the world of International Trade has been slow moving when it comes to keeping up with technology. Industry procedures have been setup a long time ago, and the people working within it are not proactive to change. Thankfully we’re starting to see improvement in software and technology in the supply chain, which when adopted on a big scale, will show dramatic improvements.
“Today we are seeing tech companies around the world improving the inefficiencies of International Trade through innovative software and solutions for exporters, importers, ports and shipping lines all over the world.” — Ben Thompson, IncoDocs
No one company can streamline such a massive complicated industry. The key to truly revolutionizing this industry is for these innovative tech companies and big companies along the supply chain to work together to make International Trade easy. This industry will face change over the next 10 years, the speed of change depends on how these companies work together.
Originally published at www.incodocs.com