Future of Containerization in Logistics

Sarath Chandran P Vrushali Mandlekar MBA P&SM

‡What is containerization? ‡Containerization as backbone of logistics ‡Advantages ‡Global Scenario ‡Indian Scenario ‡Future ahead 

Containerization (or containerisation) is a system of intermodal freight transport using standard intermodal containers. 

The global standardization of containers and container handling equipment was an important innovation in 20th century logistics.

Evolution of Containerisation
Employed in Coal mines around England and Germany during late 1870 s During 1930 s they were used a as a form of Piggy back service (transporting highway freight trailers on flatcars)

In 1955, Malcolm McLean worked with engineer Keith Tantlinger to develop the modern intermodal container.

The first vessel built to carry containers began operation in Denmark in 1951

First containerized route was between Seattle and Alaska in 1951

Standardization of Size of Containers and introduction of dedicated ships and terminals

Benefits of Containerization 
Suitable for cargo in lots and small in size.  Protect the cargo from Human and Natural factors  Saves Time and Labor cost  Ensure better handling of the cargo  Containers act as a mode of storage  Containerisation reduces transit time, which in turn reduces inventory

cost and increase reliability

Current Scenario
More than90% of world merchandise trade is carried by sea and over 50% of that volume is containerized

How container shipping changed the scale and scope of global freight distribution 

Enabled a greater velocity in freight distribution  Opened new global market for EXIM trade  Increase in efficiency of transport terminals

Growth Scenario

Source: World Container Traffic, 1980-2008 (Drewry Shipping Consultants, 2007) and Projections to 2015

Global Scenario in relation to Maritime Shipping 
Over Capacity of Shipping fleet Vs Current Demand  Change in economy of scale of vessels  Larger vessel creating pressure on terminal & access routes  Higher energy cost and Port congestion  Location / geography of trade

Indian Scenario - Containerization
‡ The container traffic handled in various ports across India has grown at the rate of 6.7% during 2009 ‡ Development of Infrastructure facilities to increase efficiency and productivity of terminals. ‡ Development of CFS and ICD to service the secondary hinterland ‡ Introduction of PPP projects in Container Terminal development and allied infrastructure.

The future ahead for containerization 

A Growing Divide between Sea-based and Land-based Operations?  A Multiplication of Routing Options?  A Continuing Global Spatial Divide?  An Evolution or a Revolution?

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