‘Box’ transportation reduces cost

Rohan Mathes

COLOMBO: Fifty years of ‘Containerisation’ or the ‘Box’ transportation has revolutionised and re-shaped the whole shipping industry and sea transportation, making the cost of moving products across the world account for barely one per cent of the retail price of consumer goods.

Lower transport costs have paved the way for companies to relocate their factories, thus leading to considerable cost reductions of consumer goods and products globally.

Statistics reveal that to take a TV set from China to the UK, costs only US $ ten or just ten cents to ship an Australian wine bottle to the United States.

Shipping a container from Singapore to Southampton costs about the same as it does to then move it on the road from Southampton to Leeds.

Container shipping is still growing at exponential rates, up by 60 per cent during the 1997 to 2005 period, and a further 46 per cent rise is forecaste within the next five years.

The latest 9000 TEU vessels carry containers that would stretch for some 35 miles, laid end to end. The new generation of 10 to 12000 TEU vessels are now emerging from the ship yards.

Statistics further show the scale of containers’ global reach, by the world’s cellular fleet growing from 1164 ships of 1.5 million TEU in 1988 to 3359 ships of 7.3 million TEU last year and is set to hit 12.3 million TEU in 2009.

Around 1.3 million TEU worth of new buildings are to be delivered this year.

No cellular ships have been scraped during year 2005.

At present, there are just 86 ships of 7500 TEU and above, and around 250 containerships of 9000 TEU and above are predicted by 2010.

The proportion of general cargo carried in containers have risen from 12 in 1990 to 27 per cent in 1999.

Container traffic volumes have grown by 11 per cent last year, with the five largest container shipping companies claiming a total market share of 42 per cent. AP Moller-Maersk takes a 18 per cent stake of it.

The typical cost of transporting a 20 feet container from Asia to Europe with 20 tonnes of cargo, is believed to be equivalent to an economy-class airfare of a single passenger on the identical journey.

The average general cargo/container ship had spent 150.37 hours in port in 1970, but in 1988, the figure had dropped to 11.23 hours.

In the beginning of 2006, there had been 144 fully cellular containerships on the UK register.

Europe’s busiest container port last year had been Rotterdam, handling 9.3 million odd TEU’s.

However, this unchecked growth is not sans daunting challenges. Analysts believe, the adequacy of port space and handling capacity in many parts of the world, especially African ports, the potential for a rates crash, caused by a surplus of tonnage, especially in the case of a slowdown in world trade, the growing insecurity in the contents of boxes and its related security, and of course the rising environmental issues and ‘Green’ pressures, may hinder and retard the process.