What is containerization and how did the innovative use of containers transform the distribution of goods? “Containerisation is a method of distributing merchandise in a unitised form suitable for transportation by rail, road, air, canal and sea.” (Branch, 1996, p.194). The simple principle of the container has undoubtedly made the global economy grow, and brought the world closer together through ease of transportation (Wetherly & Otter, 2008, p.86-7). To be able to use one single sized unit for the transportation of goods was the ultimate solution to transporting cargo, which was becoming larger part of global trade, and helped put shipping into the modern age. In 1956, Malcolm McLean used an innovative idea to transport 58 trailer …show more content…
This reduces the need for warehouse space, decreases the risk of obsolescence and improves stock control (Hann, 2010). Faster transportation has transformed the distribution of goods in allowing a greater selection of cargo to travel further than it was previously capable of. So what about the costs? "The container made shipping cheap" (Levinson, 2006, p.10). Just after McLean’s idea, it was thought that the costs of shipping were 11 percent of the value of United States exports, and could be as high as twenty-five percent. By contrast, shipping costs in comparison to product price have fallen sharply. (Asteris, 2009). It is not just the use of containers and ships that is responsible for the transportation costs, the larger normal routes, the increasing competition between the major container ship operators, such as Maesrk and Evergreen, the investment in modernising crane handling equipment and the logistics, have all had an impact. Before containerisation, businesses thought of distribution as a series of processes, ships, trucks and trains. Somebody had to move every box and pallet, and could easily consume half the cost of shipping. Levinson (2006) described this as “breaking bulk”. With goods waiting in warehouses ready to be moved onto the next stage, transferring and delays made shipments slow and the delivery times erratic. The introduction of containers meant that for the first time, cargo could be locked away when in storage. Whiskey was
Freight cost was also a problem when the shipping distance expended. Both stoves and ovens were bulky and weighed well over 300 pounds each. Thus,they were very expensive to ship.Bridgewater owned a fleet of trucks which had been expanded from 5 to 10 since the addition of wood ovens to the business. Even though the fleet represented about a $2 million investment. Shipping full – load orders in compnay owned trucks was not uneconomic. But more than hald of all shipments went out in partial loads using common carriers and contract haulers. Considering traffic management.dispathing fleet costs. freignt bills. packing cost and rental charges for public warehouse space. Total shipping costs were running about 17 % of sales in 1985.
Hi Joshua, I appreciate your intrepretation between containerization and intermodalism. I can agree with your illustration of the impact containers have on the military by transferring freight by an intermodal system. from my personal experience when i was being deployed overseas and had to pack away my stuff in storage I had the privilege to transport my personal unit items shipped in a container to where I was being deployed. The experiences have been convenient and beneficial to me with the restriction of carrying a limited amount of weight on flights. Why do you believe that containerization and intermodalism go hands in hands?
The use of containerization in freight movement has greatly reduced the cost and labor associated with moving freight. However, you highlighted something that is not often seen in the books, but in the field. The charges associated with the movement of freight intermodal is often combined into one charge for all modes of transportation used. For example, a shipment can be moved to the port via truck or rail, then placed on a ship to an overseas location, and finally trucked to its destination and the shipping charges would be on one shipping bill of lading. With freight shipments being consigned to one bill of lading no matter how many shipment modes used, does this make the payment process easier?
Mr. Walsh, the general manager, has for some time suspected that the firm might save money and get equally good service by buying its containers from an outside source. After careful inquiries, he has approached a firm specializing in container production, Packages, Inc., and asked for a quotation. At the same time, he asked Mr. Dyer, his chief accountant, to let him have an up-to-date statement of the costs of operating the container department.
Shipping some parts and pieces in very expensively made plastic reusable containers. While being conscious and in favor of recycling at the start, the parts that many of these containers hold are considerably smaller than the containers themselves, thus adding to the size and weight with shipping cost. Others are reusable steel containers, when large heavy cardboard or wooden boxes would suffice as an alternate packaging source. Some items sent in reusable wooden boxes that a heavy cardboard box would have sufficed. Just one example that has been observed in a military unit, using a $1200 plastic shipping container for a $100 circuit card with 7 layers of wrapping plus a foam insert. Of all the materials used, one needs the anti-static wrapping and the foam layer, other than that; a heavy cardboard box would be more than
Freight transportation systems are very important all over the world and are considered to be very significant to the world for regional and local economies (Konings & H. Nijkamp, 2008). The author has explained that using 1994 gross national product numbers freight transportation made 6.3 per cent of total expenditure (Knoning & H. Nijkamp, 2008). Freight transportation represents a percentage of total expenditures 38.52 per cent of the total. Here in the United States freight transportation system has become very important of global network, which has increase capacity and demand for the needs of customers that are placed on freight services.
Lastly, containerization has forever changed the transportation business by lowering the costs of shipping goods over long distances. Before containerization, it cost time, money, and labor when shipping items over many miles. In the 1970s and 1980s, once containerization took charge, then
With the global market becoming more connected and competitive, the United States supply chain needs to constantly evolve to survive. Advancing technology and E-Commerce allow customers to order products from literally anywhere in the world, resulting in a sudden emergence of strong global competition. To compete America needs to be able to provide the same goods faster and more efficient that their competitors. However many improvements in every branch of the American transportation supply chain including infrastructure and logistics need to be made in to achieve this. One practice that is becoming more essential to compete in the growing global market is intermodal freight transportation.
Containerization is a system of freight transport that transports trade goods from ports to ports. This system is based on a range of steel intermodal containers (also "shipping containers").These containers are built to standardized dimensions and can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to another. Thus, it provided an economic way to ship 90% of the world trade goods across the globe and as a result has benefited society in providing for a truly open market to buy and sell goods. Cebu is home to national and international corporations whose trading hub is centered in the international port (cargo
Beyond to describe different kinds of containers, the act to be a container can mean something else and worth to think about it. Being a container can be seen as taking the role of protection, storage or transportation. Different container can have different roles. It gives container a character that can be classified. Besides, from the other side of this idea, after a container been found, the act afterwards also be assigned. It is like when you found a jar, what you put in it will give the jar its value. Or like, you give different values to the same jar than other people did to it.
SCM can be divided into three main groups: purchase, manufacture, and transport (Thomas et al., 1996). The focus is on transportation. There are different modes of transportation. These modes of transportation fall under three basic types and they are: land (road, rail and pipelines), water (shipping) and air. Transportation plays a connective role among the several steps that result in the conversion of resources into useful goods for the ultimate consumer. It is the planning of all these functions and sub-functions into a system of goods movement in order to minimize cost and maximize service to the customers that constitutes the concept of business logistics. The system, once it’s put in place, must be effectively managed (Fair & Williams, 1981). What are the advantages and disadvantages of these modes of transportation in logistics?
Malcolm McLean brought Keith Tantlinger, a renowned container expert, onboard to his company. It was Tantlinger’s job to increase the number of containers a
The effects of containerization are arguably as far reaching as they are underappreciated. When considering technologies that changed the world, it is easy to quickly think of the internet and computers easing the speed of communication across the world. Although not as glamorous, the advent of the steel container is at the core of today’s global economy, responsible for accelerating the transfer of goods from place to place cheaply, efficiently and effectively. Containers are the physical means of exploiting cheap labor around the world and the cornerstone invention of the modern worldwide supply chain. The extent to which the “container matters to the
A focal point for great flow between sources of supply and consumers, is a warehouse. A warehouse is a space for storage and handling of goods and material. The EU and Poland have many different warehousing choices for all the different needs. Running a warehouse is not an easy task, considering that
To start, I want to tell you a story, which can be heard in depth by listening to Containers (an 8 part podcast) by Madrigal. This is the story of Port