This week, we resume our 'Did You Know' feature. Today we look at various factors in the use of containers in shipping. This will be presented in parts in the following weeks.
HOW ARE GOODS SHIPPED?
Goods can be shipped in a variety of ways.
The first is 'bulk,' that is, loose cargo such as timber or grain. These items are stored in the ship's holds. Secondly, goods may be shipped in 'break bulk', that is, goods that are shipped together (as a unit) such as on pallets or in boxes.
The third way that goods can be shipped is in 'containers.'
WHAT IS A CONTAINER?
A container is a sealed, reusable, rigid ' box' that can be transported by sea, rail or road. Containers vary in size but are usually between 20ft to 45ft in length. They are usually categorised as either 'dry van,' i.e. they carry non-perishable goods, or as 'reefers,' i.e., they transport items that are perishable and need refrigeration.
WHY HAS THE USE OF CONTAINERS INCREASED?
Over the last 30 years containers have become a preferred means of transporting goods, for both oceanic and overland freight. Why is this? First, a great variety of cargo can be transported on the same vessel without contamination by other cargo. Secondly, fragile and perishable cargo can be transported safely under controlled conditions with low pilferage.
Thirdly, cargo can be loaded onto the vessel and unloaded at the port of destination without having to unpack or disturb the cargo; it can be loaded and unloaded quickly without the risk of damage due to excessive handling. Fourthly, using containers reduces shipping costs as lower loading & unloading costs, fewer in transit shipping problems and easier storage on the wharves makes for more efficient use of time and space. Lastly, importers like using containers because of lower handling, damage and pilferage than by the more traditional transportation methods as well as the ease of moving cargo in containers from the vessel to the importers location.
WHAT ARE THE COSTS OF CONTAINERS TO SHIPPING COMPANIES?
Containers are made of tough, rigid, watertight material that will be reused time and time again; containers must be durable and secure. They will also contain special equipment to handle fragile & perishable cargo, such as refrigeration equipment on reefers. As such they are not cheap and can cost between US$10,000 and US$80,000 each. Although containers are hardy and durable they do need continual preventative maintenance to ensure reliable, trouble-free shipping.
The shipping line can only recover these costs over a period of time so that high and regular container usage is essential to make container purchase a commercially viable proposition. Idle container time does nothing to recover the expenditure of purchasing the container nor does it reduce the need and cost of leasing containers to ensure adequate numbers of stock for the exporters.
