(Assignment No 3)
Presented by: Patryk Czapski
Advanced Certificate in Logistics and Supply Chain Management
Presented to: Pat Mullen. MBA. FCILT.
Presented on: 25/09/2010
Table of Contents:
2. Containerization – definition and historic background
3. Economic impact of containers on world trade
4. Is Box behind the globalization
5. Other effects of containerization
6. Conclusion and Recommendations
Shipping container ought to be considered as one of most important inventions of the second half of 20th century. Considering how big influence the containerization had in shaping the world we live in today it is remarkable hoe few people is actually aware of its importance. It surly deserves to be placed among such a revolutionary inventions as the Internet and the PC’s. It may be that for most of us, containers are just metal boxes, not glamour enough to be part of wider pop culture.
Containerization – definition and historic background
The concept of containerization is considered as the key innovation in the field of logistics which has revolutionized freight handling in the twentieth century.
Containerization is an system of transporting almost any kind of general cargo or product in quantities which would be too small for the, until recently, traditional way of shipping, known as bulk transport system. Containerized shipping is done by using large metal boxes, popularly known as containers (with their dimensions based on universally adopted ISO standard). This new way of moving cargo is widely referred to as an inter-modal system of transporting, which means that goods can be easily moved from one location to another in these containers which can be loaded intact onto the container ships, trucks, railroad cars and planes.
It is an American entrepreneur, Malcom Purcell McLean (November 14, 1913 – May 25, 2001) that deserves the right to be called "the father of containerization". In 1956, he developed the metal shipping container, which replaced the traditional break bulk method of handling dry goods and revolutionized the transport of goods and cargo worldwide. He later founded Sea-Land Service, Inc., a shipping company that became to be one of the pioneers in the intermodal cargo transportation.
In some ways, McLean's vision was nothing new. As early as 1929, company called Seatrain Lines had carried railroad boxcars on its sea vessels to transport goods between New York and Cuba. What was new about his innovation was the idea of using large containers that were never opened in transit between shipper and consignee and that were transferable on an intermodal basis, among trucks, ships and railcars.
It was a logical next step that container sizes could be standardized, and since international shipping groups already recognized the potential of container shipping, they began discussing what the standard container sizes should be. In 1961, the International Organization for Standardization (ISO) set standard sizes. The two most important, and most commonly used sizes even today, are the 20-foot and 40-foot lengths. The 20-foot container, referred to as a Twenty-foot Equivalent Unit (TEU) became the industry standard reference with cargo volume and vessel capacity now measured in TEUs. The 40-foot length container - literally 2 TEUs - became known as the Forty-foot Equivalent Unit (FEU) and is the most frequently used container today.
Economic impact of containers on world trade
There were couple of reasons why containerization made such a great impact on the world economy, but ultimately they all have the same common denominator - significant reduction in cost of moving freight. In 1950’s and early...