Containerization: Cargo and Traditional Bulk Transport

What is containerization and how did the innovative use of containers transform the distribution of goods?

The traditional way of transporting goods from one place to another was highly labor intensive and goods were in individual crates of different sizes and shapes and they had to be manually lifted and stowed in the holds of ships. As the time passed by, the concept of containerization emerged.

Basically, Containerization is an inter-modal system of transporting the general cargo or product in lots which are too small for the traditional bulk transport system, using ISO standard containers that can be loaded and sealed intact onto container ships, railroad cars, planes, and trucks. The concept of containerization is considered as the key innovation in the field of logistics which has revolutionized freight handling in the twentieth century.

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Containerization reduces time in transit, the inventory costs and increases reliability. Such benefits are forcing the industry to make it more favorable in terms of cost, flexibility and speed. As the Internet and other new technologies and advancements are developing, it is expected to bring more innovations which will further simplify the tasks of logistics.

The innovative use of containerization has transformed the distribution of goods in following ways:

1. Goods in lots which are too small for the traditional bulk transport can be moved using containers
2. It is best option for high-value and delicate cargo as it provides safety from human and natural factors
3. As containers are moved intact, substantial amount of time and labor cost is saved which would otherwise have incurred in loading and unloading goods
4. It prevents poor handling of goods that results from bulk transport systems
5. Containers can act as mode of storage anywhere along the transport route
6. Container ships provide regular service to overseas ports, thus it minimizes the waiting time
7. It reduces the transit time which not only offers a means of marketing for the producer that bulk systems cannot provide, but also helps to reduce the inventory costs and increases reliability.

What role has containerization played in the development of a global economic system?

As containerization is the new way of transportation model, it’s definitely is more advanced and optimum way of shipping the goods from one place to the other.

Container shipping eventually replaced the traditional "break-bulk" method of handling crates, barrels and bags, and stowing them loose in a ship's hold, a system in use since the days of the Phoenicians. The replacement of break-bulk with cargo containers dramatically reduced shipping costs, reinvigorating markets and fueling the world economy. Due to cheap transportation cost, the countries could engage themselves in a fierce export drive exploiting the technological advancements and lower labor costs which are the major basis for the industrialization. In addition to that, cheap transportation also helped in revolutionizing the supply chain management of the business houses.

There had been some major developments like South Korea developed a very strong ship building industry centered on the new ships made possible in the development and introduction of containerization. And also, the major and biggest container ports in the world are located in Southeast Asia. Thus, the credit for the development of such ports in these areas goes to the containerization. Without which, these areas wouldn’t have been developed like they are today. Containerization makes the loading and unloading of goods from the ships to the ports easy and consumes extremely less time in comparison to that of tradition way of transportation. These are some of the major roles that containerization played in the development of the global economic system.

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