In 1990, global container fleet capacity stood at 1.7 million TEUs; today, it’s 14.3 million TEUS, according to AXS-Alphaliner. Behind that 730 percent increase is the story of traditional bulk or breakbulk shippers embracing the box. This trend will only be reinforced in 2011 for three reasons.
First, shippers are finding ways to overcome the technical hurdles to containerizing their cargo. Ports and logistics companies are investing in equipment to transfer bulk cargo into containers efficiently. Corn and soybean growers in the Midwest now can ship their cargo down the Mississippi River in barges and have it loaded into containers at the dock. Transloading services are available at several U.S. ports to go from railcars to container.
Second, container lines can improve their cost structure by luring U.S. exporters to use containers, reducing the number of boxes that go back overseas empty. The shipping lines have the incentive to offer competitive pricing to attract exports traditionally shipped through bulk or breakbulk. Even a small amount of revenue for a low-value product on the backhaul is better than shipping by air.
Third, shippers can overcome many of their trade finance and excess inventory issues by using containers. It’s much easier, particularly for the small- and medium-sized shipper, to finance or store a container load full of products or raw materials than financing or storing a shipload.
Containerization does not work for all cargo and shippers, and it won’t replace bulk and breakbulk shipping. Oversized and over-dimensional cargo will remain, and non-container carriers will continue to serve their markets. But as containerized capacity grows, there is room for more cargo to make the switch to the box.