You’ve seen them, on the backs of trucks headed across the continent. Perched on top of trains while you’re waiting in your car at level crossings. Parked in warehouses, balanced impossibly high on top of cargo ships longer than most skyscrapers are tall. Odds are though, you’ve probably never thought about the backstory of a shipping container.
Containers are one of those rather mundane industrial objects that are actually fascinating once you take a look at them. For one thing, they represent one of the most widely adopted industrial standards on earth. Every year, 1.6 billion tons of cargo is carried across the sea in shipping containers. They are found everywhere on Earth. How is it that these corrugated steel boxes became the ubiquitous unit of international commerce?
A Brief History of Shipping Containers
The original standard shipping container measured nineteen feet, ten-and-a-half inches long, eight feet wide, and eight feet six inches high. There are other larger containers, but they are all measured in TEUs—twenty-foot equivalent units. This was not always the case.
Early shipping containers saw their debut in Europe, prior to WWII. They were used for rail, not ocean freight, but the idea of a standard container that could be taken off the back of one railway car and put on another was thought to be one way to revitalize European shipping after the great Depression. The idea didn’t catch on internationally until well after the Second World War. When it did, it was largely due to the impetus of a single man—Malcolm McLean.
A lifelong shipping entrepreneur, Malcolm McLean created the first successful container shipping business in 1956. Although not the first to create a container ship, his vessel—a converted WWII oil tanker re-christened the Ideal X—made history by dramatically increasing the speed and decreasing the cost to load and unload a vessel. McLean’s idea rapidly gained imitators, and standards soon followed. In 1968, ISO 668 became the first standard to govern and define the dimensions of shipping containers.
Shipping Containers: Present and Future
Like any innovation, shipping containers had both positive and negative ramifications. Free trade, outsourcing, smuggling, and even affordable housing have all been impacted by the low cost and ubiquity of the shipping container.
Certain optimizations have yet to be achieved, however. The average shipping container will spend more than half of its 15-year lifespan sitting empty and unused. As the global shipping industry lurches into crisis (in part driven by low prices), the global stockpile of empty containers will increase, and transporters will incur further costs by storing and maintaining these empty assets.
On the enterprise side, those that depend on shipping physical goods to warehouses, stores, and consumers are faced with problems and opportunities of their own. Several shipping lines are now consolidating space on their vessels in order to save on costs, for example, which might cloud pricing transparency even more than it is already. Smart businesses need to understand and be ready.
Research from Aberdeen Group shows that companies who show the best ability to manage their supply chain costs see a much higher percentage of complete and on-time orders both received from suppliers and delivered to customers. For more information on how these top performers are able to navigate a sea of international regulation, handle communications with brokers, and comply with security regulations, check out our report, “Reducing Global Logistics Cost With Benchmarking And Shipping Container Pricing Strategy.”