ADVANTAGES & DISADVANTAGES OF CONTAINERIZATION

UDICHI P. CHAUHAN & SUNIT KUMAR

FLOW OF PRESENTATION

WHAT IS CONTAINERIZATION ? BIG PLAYERS CONTAINER SPECIFICATIONS ADVANTAGES DISADVANTAGES CONCLUSION

CONTAINER

The International Organisation for Standardisation (ISO) defined a freight container as : "An article of transport equipment, (a) of a permanent character and accordingly strong enough to be suitable for repeated use; (b) specially designed to facilitate the carriage of goods by one or more modes of transport, without intermediate reloading;

(c) fitted with devices permitting its ready handling, particularly its transfer from one mode of transport to another; (d) so designed as to be easy to fill and empty; (e) having an internal volume of 1 cu.m (35.3 cu.ft.) or more.

CONTAINERISATION

Containerization is a system of freight transport based on a range of steel intermodal containers (also "shipping containers", "ISO containers" etc.). Containers are built to standardized dimensions, and can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to anothercontainer ships, rail and semi-trailer truckswithout being opened.

BIG PLAYERS

NYK Line, Evergreen Marine, CMA-CGM, Maersk Line, MSC, Hapag-Lloyd, APL, Hanjin,CSCLIn India Shipping Corporation of India

ADVANTAGES
1. STANDARD TRANSPORT PRODUCT Can be manipulated anywhere in the world ( ISO standard ) 2. FLEXIBILITY OF USAGE Raw material ( coal, wheat ) , frozen products, cars , Liquids. Reuse of discarded containers

3. Management Unique identification number & a size type code. Transport management not in terms of loads, but in terms of unit.

4. Costs Low transport costs, 20 times less than bulk transport.

5. Speed Transshipment operations are minimal and rapid. Port turnaround times reduced from 3 week to about 24 hours. Containerships are faster than regular freighter ships.

6. Warehousing Its own warehouse, simpler and less expensive packaging. Stacking capacity on ships, trains (double stacking) and on ground.

7. Security Contents of the container is unknown to shippers. Can only be opened at the origin, at customs and at destination. Reduced spoilage and losses. (theft)

ADVANTAGES FOR SHIP OPERATORS AND USERS

For ship-operators

Reduction in port time of ships. Improved working ratio of ships.

For ship-users (i.e. shippers/consignees)

Reduction

in packaging cost (as example, goods can be placed in containers packed in cartons instead of in cases); Reduction of damage, pilferage and theft; Reduction in marine insurance premium; Greater protection of fragile and easily contaminable cargoes; Reduction in inland transport costs;

 Faster

and reliable delivery; Retention of original quality of goods; Physical separation of 'dirty' cargoes; Simplification of documentary procedures; Less inventory costs as a result of less transit time; and Stable inventory control made possible by stabilized ships operation schedule.

DISADVANTAGES

1. SITE CONSTRAINTS large consumption of terminal space (mostly for storage) ; move to urban periphery. Draft issues with larger containerships (more than 13 meters )

2. INFRASTRUCTURE COSTS Container handling infrastructures and equipment (giant cranes, warehouse facilities, inland road, rail access) are important investments.

3. STACKING Complexity of arrangement of containers, both on the ground and on modes ( containerships and double stack trains ). Restacking difficult to avoid.

4. THEFT AND LOSSES High value goods and a load unit that can be smuggled or lost.

5. EMPTY MOVEMENTS many containers are moved empty ( 20% of all flows)

6. IILICIT TRADE Common instrument used in illicit trade of drugs and weapons, as well as for illegal immigration. Worries about the usage of containers for terrorism.

7. ADDITIONAL FUEL COSTS Containerization increases the fuel costs and reduces the capacity of the transport as the container itself, in addition to its contents, must be transported; stackable standardized containers are usually heavier than packaging with less stringent requirements. For certain bulk products this makes containerization unattractive.

8. LOSS AT SEA Containers occasionally fall from the ships, usually during storms; between 2,000 and 10,000 containers are lost at sea each year.

SUMMING UP

Even if containerization conveys numerous advantages to freight distribution, it does not come without challenges. The main advantages relate to lower transport costs due to the advantages of standardization and the usage of the container as a mobile warehouse. The main challenges of containerization are physical, particularly the site constraints of intermodal terminals which are consuming valuable space (mostly for storage) and for port terminals require deeper drafts in light of larger containerships. Intermodal infrastructures are also capital intensive, often requiring substantial investments. Since commercial flows are generally imbalanced, containers need to be repositioned empty.

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