Introduction

After the end of World War II, it was noted that the world trade has increased substantially to
extraordinary levels. This is due to the backing of globalization and internationalization. It is
further identified that the world trade has increased by more than 145% between the years 1948
to 1993, the growth then substantially increased by more than 20% per year between the years
1962 to 1993. In the seminal work of Krugman, it was identified that the economist and other
researchers have differed in their belief for the increase in the world trade globally, the first
school of thought have argued that the increase in the world trade is mainly due to the trade
liberlaisations and the multilateral agreements entered between the countries has fostered the
growth, whereas the other school of thought has stated the major reason for such unprecedented
growth is due to the technological advancements which has encountered in the logistics,
communication, storage and transportation of materials. From the research analysis it was noted
that the introduction of large container in shipping the later 1960s and in early 1970s has enabled
the increase in world trade to a larger extent, also this further supported on the cheap air, road
and sea cargo services has joined hands in boosting the overall trade.

Table 1: How goods move between the years 1951 to 2004

The above table shows the overall world trade of ocean and air shipping traded goods, when
compared with the air tonnage between the years 1975 to 2004, it is noted that the growth has
increased by nearly 7%. In the past 35 years, it is noted that air and sea shipments has grown to
more than two-thirds of U.S imports and exports. Evidences has stated that the decline in the
overall international transportation cost and associated changes made in the containers have lead
to strong world trades across continents. In 1980s, there was a large proportion of growth has
registered in the container trade; this has mainly due to the highest level of penetration rate.
During these periods, most of the cargo has been packed loosely and has been transported
through ships. However, with the introduction of containers, most of the goods were stored and
transported at ease and with the assistance of handling equipment the number of containers
which can be shipped and transported has also grown in size. International container trade has
increased with the rate of exceeding rate of maritime trade. On a general parlance, containers are
generally stated as a rectangular box made of usually steel with more than 6 to 12 meters in
height. These containers now accounts for more than 73% of the general cargo in the marine, rail
and air transports. There is a contiuous pressure from importers and exporters to keep the overall
cost of logistics to a lowest extent possible, therefore the logistics companies has now been
continuously focused to increased the size of the ship and containers. The ships which were
designed ealier carried nearly 20 foot TEU, however in 1980s the ship building companies has
enhanced the space to store the containers, which will carry nearly more than 3,900 TEU,
however the fifth general ships were crated which can hold more than 7,500 TEUs. In the recent
years, it is noted that the cargo ships were concentrated to be mega shipps which can contain
several container cargos which can even hold more than 14,000 TEU. These were mainly
concentrated to reduce the overall cost and speed of delivery.
The period from 2001, it was noted that there is a strong growth in the shipping operators with a
huge increase in the container volume. Even during winters and other rainy climatic conditions,
there is a huge surge in volume of deliveries by large vessel. The surge is due to increased trade
activities inside the country like US, China etc. The US-China economic ties has enhanced
considerably in the past three and half decades. The trade between China and US were nearly
USD 2 billion in 1979, and it increased to more than USD 600 billion in 2014. It is noted that
China is now the second largest trading partner of US, exporting technological goods, foods and
other accessories to US. Many organizations and business enterprises are now looking at China
as one of the critical strategically partner which will enable them to stay competitive. For
example, companies like Apple, Walmart, Ford, General Motors, Tesco etc. invest heavily in
building trading relationships with China for fostering growth in the business and maintain profit
margins. Us imports goods from China at a very low cost, which is supported by low
manufacturing and transportation cost, this greatly benefits the consumers of US, as they can get
quality product at lower cost. From a recent report, it is noted that China is the highest holder of
US treasury securities of more than USD 1.5 trillion as of September 2015.
However, one of the major concerns which is affecting the US policy makers is the size of the
trade deficit which the US is having now with China. The trade deficit was USD 10 billion in
around 1990s, but grown to more than the USD 340 billion in 2014 and more than USD 350
billion in 2015. It is noted from the below table that the US trade deficit has increased more and
this is affecting the economic growth of US. Many researchers and scholars has stated that the
trade deficit will affect the trade unbalance and may decrease the relationship between the two
nations. However, OECD and WTO are now focusing that both countries can enhance their
relationship in improving the global economy and trade, If they look each other as the main
partner in supporting growth and development.
Table 2: US merchandise trade deficit with China 1980 – 2015

This assignment deals in analyzing the dramatic evolution of containers which supported the
global trade and development and how nations are now focusing to enhance the usage of various
container and logistic tools to increase the trade and reduce the overall transportation cost.

Review of literature

Historical background

The concept of containerization for global trade was invented and implemented for commercial
purpose in US, in mid 1950. However, with the adoption of technology in the port and logistics
the standardization was implemented in container in the year 1965, this has paved the way for
adoption of containers in the international trade for rail, air and water transport from 1966.
Various research report has stated that the containerization has assisted in enhancing the word
trade, reduce the cost involved in imports and exports and transformed the entire logistics
industry. With the introduction of container in the world trade, it also paved the way for creation
and introduction of intermodal transport system which assists in reducing the time involved in
offloading and loading the cargos, enhance the shipping capacities and reduces the lead time.

Before the introduction of container, the goods were stocked in wooden crates and crammed in
the ship. These crates will be loaded and unloaded by many people who are in the docks, this
also lead to theft and other issues during transportation. However Malcolm McLean has invented
the metal containers in 1956 and this has dramatically changed the way goods are shipped
between two destinations. With the introduction of uniform metal containers, the exporters and
importers has noted that the price of everything has falled and this lead to the decrease in the
overall cost from $6 per tonne which was incurred during loose wooden cargo to nearly $0.20
per tonne in metal containers. Also, it is noted that the metal containers were tightly packed and
sealed from the factory, therefore the theft of loss or any spill over is completely avoid, and the
goods will always maintain the same weight when packed.

In the recent years it was noted that many shipping companies have invested largely in the
containerization and this has enhanced the total value of goods transacted, reduces the lead time
of stay between the ports, dimishes the overall cost of transport etc. At the beginning of 1960s,
there were skepticism among various companies about the introduction of containers and
whether these would be successful. Most of the transport companies, was of the opinion that the
metal container transport would be a niche technology or just a fad which will not take off.
However, during the first few years of Ideal-X which has taken the metal containers for
transport, the investment has grown many fold and the technology for improvement was started
in US. In the words of Levinson, many ports, government officials, researchers and trade unions
have started to spend more money in analyzing and identifying ways to standardize the concept
of containerization and how this can be implemented for successful global trades. The early
initiatives on containerization were focused mainly in domestic, i.e., among US shipping
companies and it slowly took off between US and Hawaii and Puerto Rico. The technology of
using metal container was standardized and went to global by mid 1960s.
Economic effects of containerization

From the perspective of transportation, the implementation of standardized container has greatly
resulted in reducing the overall cost and enhanced the operations. Moreover, the implementation
of container has greatly paved the way of introducing intermodal freight, which has assisted in
using multiple modes of shipments for effective transportations. The multi modal transport can
use the combination of road, sea and air, without handling the freight while moving from one
mode of transport to another.
With the implementation of multi modal transport, it enables the manufacturer or exporter to
directly link to the customer or importer. Also, the containerization has resulted in the overall
reduction of cost involved in the transportation. As stated earlier, the concept of containerization
were started as private aspect and many shipping companies were reluctant to use them due to
huge cost. However with the introduction of new technology, the container companies have
found that containers were of much helpful as they involve in speedy movement of goods at a
reduced cost. There was a major encouragement from business and government in implementing
the standardised metal container for global trade.

Technical innovations

In order to introduce containerization there were many technical changes which has to be
implemented in ports and dock areas. This has lead to the introduction and creation of new
container ports. In the US, the container ports were started in Newark an Oakland which has
traditional business points in New York and San Francisco. Similarly, in many other countries
such container terminals and ports were started in order to facilitate the global trades.

Benefits

It is stated by many authors and researchers that the implementation of containers has benefited
allthe stakeholder largely. The containerization process has facilitated in removing the
bottlenecks which are associated in the freight transport. Also, the containerization has resulted
in creating multipurpose container terminals which has enhanced the labour productivity in the
dock from 1.5 tons per hour to a tune of more than 28 tons per house. This increased efficiency
has also led to speedy handling of cargo by the shipping firms, they resulted economies of scale
in doubling the average ship size. It was also noted that the efficiency is increased in handling
the ports and identifying various opportunities to service more ships and reduce the overall cost.
It can be stated that the containerization has largely benefited all the nations and other
stakeholders.

Diffusion of container technology

The

The early use of containers was driven by private shipping companies who used container sizes
and loading devices that best fit their cargo and shipment routes. The first fully containerized
ships used 35 foot containers, which was the maximum allowable length for truck traffic on US
highways. However, since a fully loaded container of this size was too heavy for a crane to lift,
other companies used much smaller sizes which could be much easier stacked and moved with
forklifts. A major force for the international adoption and diffusion of container technology was
the standardization of container sizes. The standardization process was initiated in the US by the
Federal Maritime Board and involved stake holders from the maritime sector, truck lines,
railroads and trailer manufacturers.

Another shaping factor of the ESCAP ports and shipping scene has been the series of
transformations that have occurred in the geographical distribution of container trade. In the
1970's, Asia's container trade was dominated by Japan, which was the focal point for both the
Europe–Asia and trans-Pacific trade. However, by 1985 this had changed dramatically, as
diversification of Asian container trade entered a more mature phase. Container volumes from
Hong Kong, China; Taiwan Province of China and the Republic of Korea comprised over 40 per
cent of the Asia total, while Japan's share declined to 31 per cent. By 1995, another profound
change had occurred. The decade 1985-1995 saw container volumes through the ports of
ASEAN countries increase six-fold, and by the end of the decade they collectively handled
approximately one-third of the Asian total.

During the 1995-2005, the principal change was emergence of the China market. The number of
containers handled by the mainland ports of China increased from 1 million TEU in 1983 to 43.6
million TEU in 2005 — a remarkable sustained growth rate of approximately 31 per cent a year.
As a result of this spectacular growth, the Chinese container market (excluding Hong Kong,
China and Taiwan Province of China) has overtaken Japan and the United States of America
(United States) as the world's largest container market.

The spotlight is now clearly on India, where progress towards market reform and an open
economy continues. Productivity growth is strong and container volumes are expected to grow
strongly. In a bid to ensure future growth, India is also looking to strengthen the overall logistics
chain by improving port and landside infrastructure and integration. A number of major port
projects are underway such as the new container port at Krishnapatnam Port, and the onstruction
of a rail line linking India and Myanmar.

The influence of the level of economic development on container trade intensity is clear; as
shown in the figure, container trade intensity is highest in regions dominated by developed
economies, such as North America and Europe and Central Asia, where over 100 containers of
trade is generated for every 1,000 people. The lowest amount of container trade generated was in
South Asia, where the combination of low levels of economic development and historically
inward-looking approach to development in India has resulted in less than 2 containers per 1000
head of population in 2005.

Competition regulation of liner shipping

International liner operators have been faced with a changing regulatory environment in many
countries in the recent past. This has included new regulations enforced by the United States with
the Ocean Shipping Reform Act (OSRA) in 1998, and recent rulings on Regulation 4056/86 by
the European Commission. In addition to recent amendments to the two major anti-trust regimes,
changes to an array of competition policies by other nations within the ESCAP region have
clearly influenced the environment within which shippers and carriers

EU/United States of America

The European Union competition regime consists of two block exemptions from anti-trust
policy; an exemption that covers the activities of conferences; and an exemption that covers the
activities of consortia. Regulation 4056/86 enables the Commission to apply Articles 81 and 82
of the EC Treaty directly to the maritime sector. This mechanism provides a block exemption for
liner conferences; however price-fixing and supply (particularly across modes) are regulated
within conferences. The consortium block exemption, Regulation 870/95, 823/2000, and most
recently Regulation 611/2005 recognise improved productivity and quality of liner transport
services by rationalising the activities of member companies.
Both of these have been subject to recent reviews. The Commission has extended the consortium
block exemption (by Regulation 611/2005) but abolished the general conference exemption as of
October 2008. The United States regulatory regime differs from the European regime in a
number of important respects. Historically, the United States has favoured ‘open’ conferences,
ensuring easy entry and exit with conference arrangements, whereas European regulation has
been built around closed conferences. The United States regime has been relatively
interventionist, with high information disclosure requirements and strict filing obligations.
Regulation of liner shipping in the United States is effected by specific industry regulation (the
Shipping Act 1984 as amended by the Ocean Shipping Reform Act 1999), whereas in Europe it
is affected by block exemption issued under general competition law. The United States regime
is accepting of the extension of shipping line collaboration to intermodal movements; in contrast,
the EU has been consistently hostile to such extension. Despite these differences, both
jurisdictions have in recent years taken steps that have weakened conference influence, and there
is a common view that the two major global regulatory regimes are converging.

Given the history of innovation, the discovery of container was started by Malcolm McLean, of
North Carolina who was an entrepreneur in trucks. The idea was to integrate McLean products
on road transport, which was sometimes truck and transport industry. His vision was of an
integrated transport system that moves cargo from door to door direct from the producer to the
customer. The immediate success of the first trip of the results of US ships to significant savings
of mechanized loading and unloading of containers. Shortly after the arrival of the Ideal-X port
of Houston, McLean Company, later known as Sea-Land Service, already has orders for
container ships to Newark. 1956 container ship operations Ideal X and crane, which is designed
for other purposes. The basic idea of McLean, who has many years ahead of his time, was that
the success of the container is not only based on load placement concept in a metal box. Instead,
he took additional changes cranes, ships, ports, trucks, trains and shops. Three years after the
first trip to the Ideal X, the shipping containers seen further savings by building a specially
designed container cranes and the construction of large tanks. January 9, 1959, the first container
crane specifically the world began, and could fill a box with three 40,000 pounds per minute.
what is achieved by the use of crane productivity growth was wonderful because it can handle
400 tons per hour, or more than 40 times the average productivity in the long coastline of the
band.

Narrow problem

The problems associated with US cargo ports landing marina is deep and multidimensional. US
ports are antiquated, inefficient, underfunded and has been subjected to increasing loads.
However, this is the case in the main Asian and European ports, which are larger and more
flexible than their American counterparts. Investments in information technology management
and advanced logistics capabilities will be more efficient per unit time and per hectare docking
space. 10 years ago, many Asian ports speed to achieve a 8800 TEU / acre / year. European ports
moved 3,000 TEU / acre / year. During the past 10 years, has the capacity to most Asian and
European ports more than 30,000 and 5,000 TEU / acre / year, respectively. However, most US
ports move only 5,000 TEU / acre / year today and US ports also investing in new technologies,
and thus the Asian ports and comparative advantages in Europe in the coming years.

Main Container Terminal in Hong Kong is a good example of a port technology. It is through
effective and appropriate development especially for frequent treatment of large container ships
of various technology transfer large amounts of container information discharge. Only a handful
of well put a door, we also play generation Panamax vessels. No longer can bind US ports and
efficient machine 15,000 TEUs or future generations even larger ships. You will need a major
port dredging, new images and the construction of new bridges or offshore unloading to manage
future generations of container ships now heading to US ports. The operational challenge for a
world-class port in the United States is not only a problem with small bridges or shallow
channels. This is really a problem for the whole system after the exhaustion of all parts of the
movement of the chain of goods, cargo arrival at the port to the last point ground transportation.
These problems can only develop if the supply volumes will increase over the next decade. If left
unchecked, the growing transport stream sea have devastating consequences for the US
economy, port communities and natural ecosystems.

Quantitative and qualitative analysis

In mid 1970 1000 and 1500 TEU ships and boats have been replaced by first and second
generation 2000 TEU, showing a gradual increase in the trend, leading to THY 4000+ Panamax
vessels most commonly prescribed in the early 1990s, however, the rapid growth in the size of
ships in the 1990s, around the lines, and it was decided that on the west coast of the Pacific
ocean services, United States, and therefore the Panama Canal (ship "Post-Panamax"). In 1996,
6,000 TEU vessels appeared on the scene. This rapid increase in the size of container ships has
increased, and ship sizes continue to grow, while more than 11,000 TEU ships already in
operation. The order ship is now dominated by large ships: ships capacities of container ships of
7,000 TEU currently represent 39% of the order. planned investment appears to be particularly
important for vessels with a capacity of 10,000 TEU and more. During the next three years, is the
world's fleet of more than 4,000 TEUs expected at 19%, while less than 7% per year 4,000 TEU
vessels. According Container International, the largest vessels in late 2007, about 13,300 TEU
CSCL ships the first of which was conducted in the Samsung Heavy Industries shipyard in
December 2010 (international web container space at December 12, 2007). The latest reports,
Samsung Heavy Industries planned to build a floating dock 400 meters to build the first of the
16,000 TEU vessels, and is likely to be operational in early 2009.

Growth of demand and supply in container

The average size of new vessels entering the fleet in 2006 increased by 3.6 percent to 3732
TEUs. There is disagreement on the size of the board will go from here. A review of the LSE
shows that threshold with only one engine, since the marine propulsion technology available
today would be a 12,500 TEU vessel installed capacity of 81,000 kW and a speed of 23.5 knots.
Moreover, it seems likely to require the two engines and propellers, which reduces the possibility
of reducing the cost of the plant will increase the size of the plate. The container cargo flows in
US ports brings cheap goods in the US economy. However, the free movement of marine
products a social and significant negative environmental impacts that disproportionately affect
the residents of the port facilities, which are primarily low-income, and who should bear the
crowds activities, noise and shipping. Every day create US bottleneck Pier a big truck lines.
inactive motors for a long time before the high street from areas near the port communities,
competing for space in the children.

Specifications of very large container ships

But the noise and congestion is not the only problem in the marine community. a key source of
product-related emissions (both trucks and ships) local exposure to carbon monoxide, nitrogen
dioxide, ozone and other "criteria pollutants" and cancer particles. The Board of Appeal for the
California Air Resources, said that the main source of port activity air pollution from nitrogen
oxides (NOx), which cause the outdoor pool on the south coast in 2020, the traditional distortion
of Los Angeles than gasoline cars and industrial plants.

It provides a similar trend to small particles emitted from ships and trucks from the exhaust of
diesel engines. PM10 particles having a mean diameter below 10 microns can easily be inhaled.
Average daily shipments LA PM10 dust is significantly higher than the typical greenhouse
average emissions from refineries or US particle 500,000 Americans every day cars.
Environmental Protection Agency (EPA) estimates that by 2030, emissions from marine diesel to
60% of the national minimum and maximum dangerous particles PM2.5.

The growing global demand for containers up to 6 percent in 2014 (5 per cent in 2013), which
exceeds the supply, which remained at 5 percent. Global demand particularly strong growth of
container trade is the cornerstone of the Far East and Trans-Europe, where imports reached
northern Europe and US imports from Asia, especially good results in overall improvement in
2014 showed the Main Lane Prices 2014 image compared to 2013 price levels the Far East and
Northern Europe, on average, US $ 161 and 1 / TEU in 2014, an increase of 7% compared to the
average freight after 2013 Pacific market, commercial quantities of products and rescheduling
caused by congestion at ports on the west coast of the United States in late 2014 improved prices
on the east coast of Asia and the US. Average tariff east coast Shanghai-US $ 3,720 / 40ft
equivalent units (TEU) in 2014, or 13 percent more than in 2013, while the route Shanghai West
Coast, averaging US $ 1983 / Feu, 3% compared to 2013, as well as in other countries, the prices
are even worse, because he continued to face pressure connection in cascade of a large spare
capacity in the vast continent.

Increase in container ship size

The north-south direction, where the transmission capacity were high tariff rates, South America
averaged Shanghai reached US $ 1.103 / TEU in 2014, or 20% lower than in 2013, relations
-asiatique Shanghai prices, Singapore remained relatively stable, averaging about 1 percent more
than in 2014 is overcapacity further influenced the market and charter remained almost
unchanged at a low level during the year. Furthermore, overproduction cascade agencies
continue to accept idling and slow steam (despite the decline in recent months, fuel prices in
2014), which absorbed about 2.5 million TEUs total nominal capacity. Inactivity container ships
fell 0.2 million TEUs by the end of 2014, representing 1.3 per cent of the fleet.

Conclusion

The changes in the international market during the second half of the twentieth century, more
than one story below cost. For navigation, the development of technology has led to a drastic
reduction of the costs: the average revenue fell 10 tonne-kilometers transported in 1955 and
2004, transport was negligible growth in trade, for the United States the third part of US exports
outside North America. Transport, which accounts for 99 percent of world trade by weight and
most of the world trade value has also undergone a technological revolution, shipping containers,
but the dramatic price reductions are not checked. Instead, they have not changed since the
delivery price for 1952-1970, a significant increase from the mid-1970s, in 1980, followed by a
decline in 20 years. This does not mean that the container is insignificant revolution, which
estimates herein to increase the proportion of commercial container reduces transport costs 3-13
percent. But these savings are offset by 1970, a sharp increase in fuel costs and port. In fact, the
cost of sea freight in recent years began to increase in the cost of crude oil, and congestion has
become a particularly serious problem in the country where the trade volume growing rapidly.
Economic historians have argued that technological progress has transported an important role in
the development of the first era of globalization of trade, the second half of the 19th century, I
would say that the technological changes in the air and the lowest cost rapid transit is an essential
contribution to second era of globalization in the second half of the 20th century can be a third
cross-border shopping season is unfolding now been pushed back to rapid technological
improvements that binds people together over long distances. Of course, the revolution in
telecommunications and the Internet affected international integration, leading to increased trade
and outsourcing of IT services and the migration of highly skilled professionals. The effect of
these changes, and the extent to displace older forms of integration, followed closely in the
coming years.

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