Today’s global economy is powered by standardized shipping containers, as the Evergiven blunder shows.
Beach fans near Cairo are watching a huge container ship sail towards the Red Sea. AP Photo / AmrNabil Look around you. Perhaps you’re eating bananas, drinking coffee, sitting in front of your computer, taking a break from work and reading this article. Perhaps these goods, and smartphones, refrigerators, and almost everything else in the house, were once loaded into large containers in another country and traveled thousands of miles via ships across the ocean. Finally arrived at the front door. Today, an estimated 90% of the world’s goods are shipped by sea, 60% of which (including almost all imported fruits, gadgets and appliances) are packed in large steel containers. The rest are mainly commodities such as oil and grains that are poured directly onto the hull. In total, about US $ 14 trillion of global merchandise spends time in large metal boxes. In short, without the thousands of standardized containers that helped trap Evergiven in the mud along the Suez Canal, there wouldn’t have been a global supply chain that would have snarled traffic for almost a week and depended on society. Probably. About 30% of the world’s container shipments pass through the Suez Canal. The Evergiven case reveals some twists in the modern supply chain. But as an expert on this topic, I think it also highlights the importance of a simple yet essential freight container that resembles a Lego block floating in the ocean from a distance. Trading in front of containers Since the dawn of commerce, people have used boxes, bags, barrels and containers of various sizes to transport long-distance goods. In 1600 BC, the Phoenicians carried wood, cloth and glass in bags to Arabia via camel-driven caravans. And hundreds of years later, the Greeks used an ancient storage container called an amphora to transport wine, olive oil, and grain on a trireme that carried the Mediterranean Sea and neighboring seas to other ports in the region. did. Even if trade goes further, the loading and unloading process of transferring goods from one shipping method to another can be very tedious, as all container shapes and sizes may be the same. , Time consuming and costly. For example, a ship’s container transported to a small rail vehicle often had to be opened and repacked in a boxcar. In addition, different package sizes did not make effective use of ship space, causing problems with ship weight and balance. In addition, products are more likely to be damaged by exposure or theft. Ceramic containers, called amphora, were often used by Greeks and others to transfer liquids such as wine and grains. Getty Images PHAS / Universal Images Group Trade Revolution The U.S. military seeks to use standardized small containers to more efficiently transport guns, bombs, and other supplies to the forefront during World War II. I started to do it. However, it wasn’t until the 1950s that American entrepreneur Malcolm McLean realized that standardizing the size of containers used in world trade could at least partially mechanize the loading and unloading of ships and trains. did. Another seamless. In this way, the product can stay in the container from manufacturing to delivery, resulting in reduced costs in terms of labor costs and potential damage. In 1956, McLean created a standard freight container. It is still basically used today. He originally built it 33 feet long-soon increased to 35-and 8 feet wide and high. The Matson Hawaiian Citizen was one of the first ships to be converted into a container ship found at the San Francisco pier in 1963. Associated Press Photo This has dramatically reduced the cost of loading and unloading ships. In 1956, the baggage of a ship was $ 5.86 per ton. Standardized containers have reduced their cost to just 16 cents per ton. Also, the container is made of durable steel and remains locked in transit, making it much easier to protect the cargo from elements and pirates. The United States took full advantage of this innovation during the Vietnam War to transport supplies to soldiers. Soldiers sometimes even used containers as shelters. Currently, the standard container size is 20 feet long and the same width, but more generally 0.5 feet higher. This is the size that has become known as the “20-foot equivalent container unit” or TEU. In reality, there are several different “standard” sizes, such as 40 feet long and a little taller, but they are all the same width. One of the main advantages is that, like a Lego block, everything fits neatly and has virtually no free space, regardless of the size the ship uses. This innovation has enabled a modern, globalized world. The volume of goods shipped in containers surged from 102 million tonnes in 1980 to about 1.83 billion tonnes in 2017. Most containerized transport flows across the Pacific Ocean or between Europe and Asia, usually through the Suez Canal. Ships are becoming huge Due to the standardization of container sizes, the size of ships is also increasing rapidly. The more containers that can be packed into a ship, the more income the shipping company can earn on each trip. In fact, the average size of container ships has doubled in the last 20 years alone. The largest vessels sailing today can carry 24,000 containers. This is the capacity equivalent to the capacity of a 44-mile long freight train. In other words, a ship named Globe with a capacity of 19,100 20-foot containers has 156 million pairs of shoes, 300 million tablet computers, or 900 million cans baked in case you feel hungry. You can carry beans. Ever Given had over 18,000 containers. The Associated Press / Mohamed Elshahed The Ever Gived has a similar capacity of 20,000 containers, although it carried only 18,300 when stuck on the Suez Canal. Imagine this from a cost perspective. The typical pre-pandemic price for transporting a 20-foot container carrying 20 tons or more of cargo from Asia to Europe was about the same as an economy ticket for the same journey. Cost of Success However, as Evergiven’s predicament has shown, increasing the size of a ship is costly. Maritime transport is becoming more and more important to the world’s supply chain and trade, but it was largely invisible until the recent blockade of Logjam and the Suez Canal. As Evergiven was crossing a narrow 120-mile canal, a gust of wind blew it off the bank, and its 200,000 tonnes of weight trapped it in the mud. About 12% of the world’s shipping traffic passes through this canal. At some point, the blockage was stuck waiting for at least 369 vessels to cross the canal from either side, costing an estimated $ 9.6 billion per day. That’s $ 400 million per hour, or $ 6.7 million per minute. Standardized shipping containers like these 40-foot ones have enabled globalization. The Associated Press / Stephen B. Morton Shipbuilding Company is working on building larger container ships than ever before, and there is little evidence that this trend will soon cease. Some predict that ships capable of carrying 50% more luggage than Evergiven will sail in the open ocean by 2030. In other words, standardized shipping containers are more popular and in demand than ever before. [You’re smart and curious about the world. So are The Conversation’s authors and editors. You can get our highlights each weekend.]This article has been republished by The Conversation, a non-profit news site aimed at sharing ideas from academic experts. Written by Anna Nagurney of the University of Massachusetts Amherst. Read more: Suez Canal Blockage: How Big Cargo Ships Like Evergiven Are Caused Problems Suez Canal: Meaning of “Groove” for the British Empire in the 19th Century Benefits of this article We share the receiving company or organization, receive funding, and do not disclose relevant alliances beyond academic appointments.