Introduction
(Containerization)

Containerization
is a system that use shipping containers for freight transportation. Containers
have standardized detentions. Those can be loaded, unloaded, stored and
transported efficiently over long distances. It also makes easy for
transferring from one mode to another such as ships to rail transport and ship
to road transport without being opened. Handling is done with cranes and can be
tracked using computerized systems. 

Containerization
origins in early coal mining areas in England. In 1766 James Brindley
introduced the box boat with wooden containers to transport coal. Since then,
structure of container has been developed until 1900s. In 1951 the Swiss Museum
of transport and Bureau international des Containers introduced demonstrations
of container system.  Malcom Purcell
Mclean was the American business who developed intermodal shipping container to
modern level.  

ISO Standards for modern containers

 

·        
Common
lengths (20ft, 40ft, 45ft, 48ft and 52ft)

·        
Capacity
expressed in TEU- Twenty Feet Equivalent units.

·        
Maximum
gross mass for 20ft is 24000 Kgs.

·        
Height
is not considered for expression.

Intermodal
containers have been developed to adopt for various uses. According to that
uses there are lot of container types existing in modern container
shipping.  

Most Common Container types

1.     
Dry
containers

2.     
Flat Rack
Containers

3.     
Open top
containers

4.     
Tunnel
containers

5.     
Refrigerated
containers

6.     
Thermal
containers

7.     
Garment
on hanger (Balkanoglasi.com, n.d.)

Structure
of container ship

Container ships can be
categorized based on sizes and structure. Based on the structure, there are two
types of container ships. Those are,

1.     
Geared
container ships.

 

 

 

 

 

Advantages

§  Some geared ships have gantry cranes are installed. These cranes, specialized for
container handling, can roll forward and aft on rails.

§  This type of ships can operate cargo in ports
that are not equipped with container handling facilities such as cranes.

Disadvantages

§  Additional capital expense and maintenance costs and ships will cost more to purchase than a gearless ship.

§  These cranes generally slower in loading and unloading
containers more than gantry cranes in seaports.

§  Less
capacity more than gearless container ships.

 

2.     
Gearless
container ships.

 

 

 

 

 

 

 

 

 (Source: Clarkson research, March
2014)

According to this graph operating gearless large ship is
more profitable than operating geared small ship in present conditions. Modern
market small geared vessels more frequently use as feeder vessels. Other than
that, most of the large vessels are gearless due to various aspects. Following
advantages and challengers can be discussed regarding the gearless ships.

Advantages

§  Large export volumes from states
will increase demand for creating more plants in several countries. This will
also drive demand of sourcing out raw materials.

§  Larger container ships will
beneficial for helping to contribute to the progress of developing countries.

§  When consider socio economic
aspects, with the larger capacity, more containers will be carried with less
number of vessels, leading to a decreased environmental impact.

Challenges

§  Due to the Larger sizes, operational processes will be more
complexes such as placement, distribution, and handling of the containers.

§  Operational risk for operators and owners will be increased.

§  Ports have limited space. Therefore, fleet of huge ships can
be caused to occur longed waiting times within cargo loading and unloading (Tas)

Evolution of Container Ships
& Other Aspects

Since 1950 container ships were become to play a major
role of transportation industry. There were main six types of generations of
container ships industry. Step by step container ships manufactures have
developed capacity and other aspects of ships.

 

 (Source: Redirect Notice)

1.      Early
container ships

In early stages, tankers and bulk vessels modified and
used to transport containers through overseas. The maximum capacity of those
ships was about 1000TEU’s. The first container ship was “Ideal X” and it was it
was the first tanker converted as a container ship in world war 2. Maximum
speed of those type of ships were 18 to 20 knots at that time. After that some
countries begun to build container ships and then second generation of ships
started. Those kinds of ships named as “fully cellular ships”.

 

2.      Panamax

In 1980s ship builders realized that when ship become
bigger they can experience economies of scale. With that concept they could
transport containers at lower rate per TEU. The procedure turned into an
idealistic circle exacerbating bigger volumes and lower costs, which
fundamentally helped the dissemination of the compartment. The size furthest
reaches of the Panama Canal, which came to be known as the Panamax standard, was
accomplished in 1985 with a limit of around 4,000 TEUs.

3.      Post
Panamax 1 and 2

Going past Panamax was a hazard as far as the
arrangement of transportation organizes, extra taking care of framework and
additionally draft confinements at ports. The APL C10 containership class, with
a limit of 4,500 TEUs, was presented in 1988 and was the primary containership
class to sur passed the 32.2 m width farthest point of the Panama Canal.

4.      New
Panamax or Neo Panamax

Alludes to ships intended to fit precisely in the
locks of the extended Panama Canal, which opened in June 2016. These boats have
a limit of around 12,500 TEU, however there are a few setups of Neo-Panamax
dispatches as far as length and width. Like its Panamax partners, Neo-Panamax
ships are probably going to characterize a particular ship class ready to
benefit the Americas and the Caribbean, either from Europe or from Asia.

5.      Post
Panamax 3 and Triple E

Since 2006, a third era of post Panamax containerships
came to the industry when Maersk shipping line presented a ship class having a
limit in the scope of 11,000 to 14,500 TEUs, the Emma Maersk. They were named
“Post New Panamax” since they are greater than the of the extended
Panama Canal. Current largest container ship is OOCL HONG KONG which has
capacity of 21413 TEUs. (People.hofstra.edu)

Common Loading and Unloading Area.   

When considering the
exporting of the containerized cargo, specially the countries in East Asia
dominates the trade. Nearly two-thirds of the total exporting is accounted by
the top ten exporting counties like china, US, South Korea etc. and the 30
percent of global volumes of containerized exports are done by Greater China.

When considering the
importing, as main exporting countries USA, Singapore, China, UK, Netherland
etc. can be identified.

According
to the UNCTAD Review of Maritime Transport 2017 estimated containerized cargo
flow as below.

 

 

 

 

 

 

As the world’s busiest
transshipment port, Port of Singapore takes a significant place in this
container handling. Even though Sri Lankan ports not that large as a major
maritime hub in the Indian Ocean, Sri Lanka is also engaging in container ships
loading and unloading activities.

Some container ship
loading and unloading ports are mentioned in below.

 

Container
Ship Unloading Ports

Port

Country

Port
of Orleans

USA

Port
of Oakland

USA

Port
of Auckland

New
Zealand

Port
of Singapore

Singapore

Port
of Rotterdam

Netherlands

Busan

South
Korea

Tokyo

Japan

Port
of Colombo

Sri
Lanka

Container
Ship Loading Ports

Port

Country

Port of
Shanghai

China

Shenzhen

China

Ningbo-Zhoushan

China

Hong Kong,
S.A.R.

China

Port of
Singapore

Singapore

Busan

South Korea

Port of New
Orleans

USA

Port of
Felixstowe

UK

 

Container shipping routes

Supply
and Demand in the Container Shipping Industry towards global trends

Shipping industry is one
of the back bone of the development of international trade. The international
market is highly depending on shipping companies which enables different
nations to import and export anything in this world. During 2008 and 2009,
Global shipping industry experienced a hard time due to financial crisis.
However, it had overcome in 2010 and made a solid growth in 2011. And it is
keeping on growing as the enhancement of the world economy and new
opportunities.

Political climate is one
of the obvious factor which affects the market condition of the container
shipping industry globally. And there is some factor listed below are some
factors which affects the supply and demand in the container shipping industry.

§  The overcapacity in the container
segment does not match the financial cycles:

 

(Source: Clarkson research, March 2014)

Timing is another
important factor for the balance of supply and demand. It is very hard to fit
into the financial cycle to give a balance between supply and demand for the
giant ships of 14000 TEUs. This is a difficult task in an unstable market where
prices move vigorously and uncertainly.

§  Industries adapt their freight to the
container shipping method:

Containerization
is the new trend in this industry. 
Another trend is that industries are adapting containerization. For
instance, the paper industry has reformed their freight to the container
shipping method by changing the size of paper rolls to fit the containers. The
freight is transported directly to the consumer, to make it more efficient and
to decrease the risk of damages.

§  Increasing demand for customer focus
and new technology:

We
are in the era of a technical revolution where everyone in the full logistics
chain from manufacturer to collector. Invest all the resources to develop new
system to achieve higher efficiency. More transparency is expected by the
customers within the entire logistic chain with the help of the development of
IT systems.

§  Lower demand for shipments to &
from the Far East:

China
had a fast-economic growth during the recent decades and the country has been a
great force for enhancing global trade. However, the earlier year we could see
the predicted growth actually weaken which has headed to a lower demand for
shipments to and from the Far East.

§  Capacity in ports raises faster than
trade volumes:

There
are many seaports contributing to an imbalance between supply and demand in
some regions. Shippers need to select which ports to invest in and there is a
risk with only a little big port monitoring the logistics streams. Single
terminal operators might only keep attention in signing up with one or two
alliances leads to no diversity in the industry. (Gandhishipping.com,
n.d.)

Future
potential in the container ship market

Ten years back world’s
sea –going container carried panamax-size container ships that have 5000 TEU
capacity. But with the development of the international trade, transport
network and the logistics needed much larger container ships to do the trade
between Europe and Asia, Asia and West Coast America.

Economies of scale

Economies of scale is a
universal word that use in the container shipping industry. So, vessels are
getting larger and larger to support this concept. To do so ports are expanding
and collaborating to achieve greater economies of scale in present. Also, with
the future plans of transit much larger containers of the Panama Canal and the
increasing transit capacity of the Suez Canal will result to produce container
ships that carrying over 28000 TEU in the next decade. So these container ships
will be appearing in Asian, American and Brazilian ports sooner.

 

 

Arctic Warming and the
Canada’s Northwest Passage

There is a future
potential to allow the Canadian passage to transit container ships for perhaps
three months period for a year because of the changing weather pattern of the
global and warming of the Arctic. Also, from another 25 years Canadian
northwest sailing season will be extended from May to October because of those
reasons. Because of that container ships will tend to sail via Canadian passage
from Asian ports to east cost American ports and European ports.

 

World GDP and the
container shipping

Since 2010 container shipping
industry wasn’t able to adapt to new typical where request develops by a various
of worldwide GDP development of one or even underneath.so the container
shipping industry has ended up with lower fleet growth than the demand growth.
Because of this IMF forecast that the coming years will neither improve or
worsen in the container shipping industry.

So
maybe the future of the container shipping industry will smaller than expected
because of the imbalance between the supply and demand

 

Growth of China

Asia has the market share
of 64% in
the containerized cargo. The main reason for this is the development of the
China’s trade among the globe. China imported and exported 52 million    20-foot equivalent units (TEUs) in 2015
compared with 13 million in 2000. So, in near future China will gain more
market share on the containerized shipping industry. (Bimco.org,
n.d.)

 

 

 

 

 

 

 

Suggestions to improve

When designing the
network if the shipping companies can use new utilized calculations and methods
to make more effective decisions rather than using outmoded approach will be
result for the high varied supply that matched with the demand in the sea
trade.

Also, the shipping
companies must help to find new techniques and ways to motivate the employees
to search for the improvement of the industry rather than just thinking about
how to increase the capacity. Also, the shipping companies must be ready to bet
on the future opportunities and they must be able to get the maximum benefit
from each opportunity by acting after analyzing the past data belong to each
situation. So, with that shipping companies will be able to achieve the desired
profit.

With the technical revolution
and the logistic network shipping companies can gain the real time data about
the operations. So, if they can have some transparency in their operations with
other shipping companies and make alliances it will be reduce the cost and
improve the service of the container shipping.

Other main thing is
increasing the commodities such as timber, malt and fertilizers. These things
are shipped in containers. So, the shipping companies can forecast the
increasing demand for these components and supply according to that. So, with a
better analyzing about the trends with the help of the new information
technology, logistics network and the engineering technology they can identify
the capacity of the container ship is needed for each trade and the region. (The Maritime
Executive)

 

 

 

 

 

 

 

 

 

 

 

 

References

(n.d.). Retrieved from Balkanoglasi.com:
http://www.balkanoglasi.com/Containerized
(n.d.). Retrieved from People.hofstra.edu:
https://people.hofstra.edu/geotrans/eng/ch3en/conc3en/containerships.html
(n.d.). Retrieved from Gandhishipping.com:

7 Global Trends Affecting Supply & Demand in the Container Shipping Industry

(n.d.). Retrieved from Bimco.org:
https://www.bimco.org/news/market_analysis/2017/20170103-the-shipping-market-in-2016-and-looking-forward
(n.d.). Retrieved from The Maritime Executive:
https://maritime-executive.com/editorials/new-sailing-routes-for-future-container-mega-ships#gs.H6rnnww
gpedia.
(n.d.). Retrieved from http://www.gpedia.com/en/gpedia/Containerization
Tas, Z. (n.d.). Retrieved from More Than Shipping:

The Advantages and Disadvantages of Ultra-Large Container Ships

World Shipping Counsil. (n.d.). http://www.worldshipping.org/about-the-industry/history-of-containerization.