Prior to the 1950’s, nearly all of the world’s cargo was transported in a mixed assortment of barrels, crates, drums and bags. Each piece of cargo had to be individually loaded onto ships and then later unloaded at distant ports. Because there were so many types of goods in all shapes and sizes on each ship, the cargo could easily be lost or damaged. This traditional type of shipping is known as the break bulk method, so named because the bulk cargo was split and sorted into smaller groups that could be more easily loaded onto various modes of transport.
Then, in 1956, Malcom McLean invented the first metal shipping container and changed the face of an industry.
McLean’s containers were designed to be intermodal, meaning that they could be easily transferred between different modes of transport such as ships, trains and planes. They were large enough to carry large volumes of different types of good, and their design was simple enough that they could be stacked to maximize the efficient use of space.
After founding Sea-Land Service and establishing a number of transpacific shipping routes, McLean’s company was contracted by the U.S. government to create a container service to Vietnam in 1967. This shipping lane accounted for nearly half of the company’s yearly revenue in the following years.
Today, container shipping accounts for roughly 60 percent of the world’s seaborne trade.
This equates to about $4 trillion in goods annually. In 2012, shipping containers carried roughly 1.5 billion metric tons of goods around the globe. On any given day, at least 5 million of these containers are traveling by sea, rail and air. In total, there are over 17 million shipping containers worldwide. The vast majority of these containers (over 95 percent) are manufactured in China. This is due in large part to the fact that most of the world’s dry freight is produced in China.
So why has container shipping become so widespread?
It all comes down to economics. Because such large volumes of goods can be transported in a relatively small amount of space, container shipping is far more cost effective than break bulk shipping. Container sizes are standardized so they can easily be loaded, unloaded and tightly packed on ships. Containers are also built to be extremely durable, and can have lifespans as long as 20 years. Compare this to the lifespan of a wooden crate or barrel that might survive just a few voyages.
Seaborne container shipping has also come to be widely regarded as the most environmentally friendly form of cargo transport. According to Maersk, transporting a container on one of its cargo ships releases just three grams of carbon dioxide, whereas transporting goods on an airplane can produce as much as 560 grams of carbon dioxide per ton of cargo.
With the age of containerization came a new generation of massive ships.
Part of the reason seaborne container shipping has become so efficient is that the ships
that carry the containers have become staggeringly huge. The largest container ship in the world, the CSCL Globe, is over 1,300 feet-long and can be loaded with roughly 19,000 containers. To put this in perspective, this is 3.5 football fields in length. These ships have gotten so large that ports have had to be entirely redesigned to accommodate them. In the Port of Felixstowe, for example, it cost about $450 million to create two deep water berths that could hold these enormous vessels.
Here at SPEED Global Services, we know just how much containerization has changed our industry, and consequently the world. Without the remarkably straightforward innovation of Malcom McLean, transoceanic shipping would be far less efficient, and far more expensive. Sometimes it’s the simplest idea that can make the biggest difference.