History of Containerisation

Before the intermodal container was developed, goods were moved from land to sea using crates, barrels, sacks, pallets, and boxes. The loading and unloading of ships when they arrived at the dock was slow and labor intensive. The term used for this type cargo is called break bulk, derived from the phrase breaking bulk which means the extraction of a portion of the cargo of a ship. The ships were unloaded of their cargo and the cargo to be placed in the ships hold would be moved to the dock from warehouses at the port. If the items were large enough they were hoisted on to the shop using dockside cranes or the ships equipment. Smaller items were first placed on to trays or placed in cargo nets so they could be moved on to the ship. When the railroads arrived at the ports the labor intensity of the break bulk system was multiplied as the cargo had to be removed from the ship to the dock and then on to the freight trains. The system of break bulk was used throughout the second world war in the same manner that have been used for the previous hundred years. It was ten years after the end of the war that the era of containerization began. In 1953 Malcolm McLean started to develop a vehicle that could be driven moved directly from the road to the ship. The concept was not successful as it did not use the space efficiently. McLean modified his design so that the container could be removed from the chassis and loaded on the ship, rather than the complete truck. In 1955 Malcolm McLean sold his trucking company and purchased two Second World War tankers. The first tanker, the Ideal X, was converted with a reinforced deck to carry 58 metal container boxes as well as 15,000 tons of bulk petroleum. The maiden voyage was from Port Elizabeth, New Jersey to the Port of Houston on April 26th, 1956.

What is 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 another container ships, rail, and semi trailer trucks without being opened. The system, developed after World war 2 led to greatly reduced transport costs, and supported a vast increase in international trade. Advantages of Containerisation

Factor Standard transport product

Advantage Can be manipulated anywhere in the world (ISO standard). Specialized ships, trucks and wagons. Commodities(coal, wheat), manufactured goods, cars, frozen products. Adapted containers for dry cargo, liquids (oil and chemical products) and refrigerated cargo. Reuse of discarded containers.

Flexibility of usage

Management

Unique identification number and a size type code. Transport management not in terms of loads, but in terms of units. Low transport costs; 20 times less than bulk transport Economic of scale. Transshipment operations are minimal and rapid. Port turnaround times reduced from 3 weeks to about 24 hours. Containerships are faster than regular freighter ships. Its own warehouse; Simpler and less expensive packaging. Stacking capacity on ships, trains (doublestacking) and on the ground. Contents of the container is unknown to carriers. Can only be opened at the origin, at customs and at the destination. Reduced spoilage and losses (theft).

Costs

Speed

Warehousing

Security

Challenges of Containerisation

Factor Site constraints

Challenge Large consumption of terminal space (mostly for storage); move to urban periphery. Draft issues with larger containerships (more than 13 meters). Container handling infrastructures and equipments,giant cranes, warehousing facilities, inland road, rail access), are important investments. Complexity of arrangement of containers, both on the ground and on modes (containerships and double-stack trains). Restacking difficult to avoid. High value goods and a load unit that can opened or carried (on truck). Vulnerability between terminal and final destination. 10,000 containers are lost at sea each year (fall overboard).

Infrastructure costs

Stacking

Theft and losses

Empty movements

Many containers are moved empty (20% of all flows). Either full or empty, a container takes the same amount of space. Divergence between production and consumption; repositioning. Common instrument used in the illicit trade of drug and weapons, as well as for illegal immigration. Worries about the usage of containers for terrorism.

Illicit trade

Containerisation Past,Present,Future Past

The effort to ship cargo in container initiated in the beginning of 19th century. These containers could be shifted from railroads to ships or trucks. The containers used at that time were much smaller than what we see today.In the mid 1920s Milwaukee Railway and Chicago North Shore started using shippers' vehicles and motor carrier vehicles on flatcars between the route of Milwaukee and Chicago. Later, SeatrainLines carried railroad boxcars on ships to move goods between Cuba and New York. Also, the Chicago Great Western Railway and the New Haven railroad began transporting highway freight trailers on flatcars.In the early 1950s, these flatcars got more equipped with new decks.
Present

Today containerization has become the integral part of logistics. It has revolutionized the cargo shipping. Today, nearly 90% of non bulk cargo moves by containers put on transport ships. One fourth of world's total containers start from China. With the use of ISO standard containers, the size and shapes of commercial vehicles carrying containers arealso getting standardized.Today, improved cargo security is seen as an added benefit of containerization. The cargo is not visible and hence less likely to be stolen and also doors of the containers are sealed so that its safety can be assured. Worldwide standardization of sizes of containers has lessened the problems of incompatibility and gauge. Today most of the trains in the world operate on 4 feet 8 inch gauge track but many countries like Russia, Australia,Spain and Finland while countries in Africa and South America use narrower gauges. Some of the largest global players containerizing containers today are Bowen Exports, Theiler & Sons Goods, LLC and Patrick Global Shipping.Types of containers available to meet different needs:Open top,bulk containers,Open side containers,General purpose, dry vans,Platform containers,High cube pallet wide containers,Containers with temperature controlling facility,Ventilated containers,Tank container,Flush folding ,flat-rack containers.
Future

Containerization reduces time in transit, the inventory costs and increases reliability. Such benefits are forcing the industry to make it more favorable in terms of cost, flexibility and speed. As the Internet and other new communication technologies are developing, it isexpected to bring more innovations which will further simplify the tasks of logistics.Many companies are designing the freighters capable of 14000 TEU.Container traffic from Asia is expected to grow more rapidly in near future. The containerization in terms of expansion is expected to be far rapid in China.he Asia's share of containerized exports to world's total exports is expected to reach nearly 64 % in 2015.

CLASSIFICATION OF CONTAINERS:

A container can be classified in terms of the building or cladding materials, i.e. what a container is made of. The maximum number of containers are made of steel, aluminium or GRP. (Glass Fiber reinforced plywood). Almost 65% of the entire container fleet presently consist of steel containers. The main advantages of steel containers are : i. ii. They are the cheapest. They can be more easily repaired compared to aluminium or GRP containers in view of availability of skilled labourers and equipments to handle steel. In the USA the aluminium containers can be more easily repaired compared to steel containers. They can resist damage. While a damage can create a hole in an aluminium container, it can cause only a dent in a steel container which may not warrant an immediate repair.

iii.

The disadvantages of steel containers are: i. ii. iii. They can have an economic life of about 10 years, while aluminium or GRP containers may last longer. They will have more tare weight compared to other types of container, thus will be able to carry less payload of cargo. They suffer by being more prone to corrosion. But this can be overcome by us of alloy steel instead of ordinary steel.

The other mode of classification of containers can be by their dimensions. The ISO have worked a great deal on standardisation of container dimensions and have come out with the recommendations as to the length of container being multiple of 10ft. i.e., 10ft or 20ft. or 30ft. Presently, 20ft. containers are predominantly used and around 65-70% of world fleet consist of 20ft. containers. 20ft. containers are referred to as Twenty Feet Equivalent Unit or TEU. This term is used all over the world to express the container fleet. If all the containers are expressed in terms of TEU, it becomes easier for the container terminal operators and ship-owners to

estimate the space required in a container terminal or inside the vessel to cater to the total number of boxes expressed in terms of TEUs, being handled at a certain port or by a carrier. Most of the containers have a width of a 8ft. But in height containers vary from 8ft. to 8 1/2ft. Presently about 75% of world box fleet have a height of 8 1/2ft. and about 20% have a height of 8ft. However, there is an increasing tendency to use containers of 9ft. and 9 1/2ft. The inside volume of a standard 20ft. X 8ft. X 8 1/2ft. container is about 30 cu.m. Lastly, the containers can also be classified by their uses. Containers may be broadly classified into three types by cargo to be stowed therein. They are: i. General cargo container is the most representative type for general cargo that does not require temperature control; it occupies an overwhelming percentage of the total number of containers and is called Dry Cargo Container. It is generally of the closed van type with a door at one end. Thermal container is designed for cargo requiring refrigerated or insulated storage, covered overall with material of low heat transfer such as polystyrenefoam and is classified into three types: a. Refrigerated (or Reefer) Container (for cooled foodstuffs, meat, fish, vegetables, etc.) b. Insulated container for fruit, vegetables, etc. Here dry ice is used as a cooling medium. c. Ventilated container allows for the passage of air by means of apertures on sides or ends, for cargo that requires respiration such as fruit or vegetable. Special containers - Bulk container, Tank container, Open top container, Side open container, Car container, Pen container of Livestock container, etc. as refrigerated containers or REEFER containers.

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The dry cargo containers are by far the maximum in use. They are of different types. A standard dry cargo container is a container of box type with a door at one end. Sometimes containers are provided with side doors, i.e. the entire side of the container can be opened for easier stuffing/destuffing. These types of containers are useful when stuffing/ destuffing is to be done when container is mounted on a wagon or trailor. There are various dry specials like open top container, flat racks or flats, bulk container, garment containers, ventilated containers, etc. The open container is one having no roof and usually provided with a polythene lined tarpaulin to cover the container. The advantage of this container is that

heavy machineries, structurals, etc. can be easily hoisted by a crane and put inside the container through its open roof. Flat rack or flat container is a container having its base only. Usually a cargo of odd size and weight is put on to this container and is lashed to it. Bulk container is a container fitted with manholes to facilitate loading of bulk cargo through gravity whereas garment container is a container fitted with hangers which helps a garment dealer to stuff a large number of garments in hangers inside the containers. The ventilated containers are containers having some means of ventilation required for carriage of special cargo like tea, coffee, etc. These cargoes are liable to sweat if carried in closed box type containers. Liquid containers are usually made of stainless steel and have manholes for loading/ unloading liquid cargo whereas gas containers are special containers used to carry gas.
IDENTIFICATION OF CONTAINERS:

For identification, containers have marking showing: i. ii. iii. Owner Code, Serial Number and Check Digit. Country Code and type code. Maximum, Gross and Tare Weight.

This is illustrated below:

Owner Code Serial Number Check Digit Country Code Size Code Type Code 001234 00000 00000 3 kg Lb KG FXX 2030

ABZU MAS Gross

Tare

0000

0000

Lb

ADVANTAGES OF CONTAINERISATION :

A. For ship-operators i. Reduction in port time of ships. ii. Improved working ratio of ships.

B. For ship-users (i.e. shippers/consignees) i. Reduction in packaging cost (as example, goods can be placed in containers packed in cartons instead of in cases); ii. Reduction of damage, pilferage and theft; iii. Reduction in marine insurance premium; iv. Greater protection of fragile and easily contaminable cargoes; v. Reduction in inland transport costs; vi. Faster and reliable delivery; vii. Retention of original quality of goods; viii. Physical separation of 'dirty' cargoes; ix. Simplification of documentary procedures; x. Less inventory costs as a result of less transit time; and xi. Stable inventory control made possible by stabilised ships operaton schedule. The most outstanding contribution of containerisation is the suitability and capability of containers for door-to-door transportation internationally. This is called 'Intermodal or Multimodal' transportation system, eg. from Delhi to Zurich in Switzerland.
CONCEPTS OF FCL & LCL:

FCL means Full Container Load. Here the container consists of cargoes meant for one party, i.e. consignee only. The cargo is stuffed at shipper's warehouse and is destuffed at consignee's warehouse. Here the responsibility of stuffing, stowing of cargo inside the container is of the shipper. Stuffing charges are on account of the shipper and the destuffing charges on account of the consignee. LCL means Less Container Load. Here the container consists of cargoes meant for different parties. The carrier collects cargoes from various shippers and stuff all of them into a container at the pier. At destination, the carrier's agents destuff the cargoes from the container and deliver the cargoes to respective consignees.

FCL/LCL. - A shipment of goods which the merchant is responsible for packing into the container and the carrier is responsible for unpacking the container. LCL/FCL. - A shipment of goods which the carrier is responsible for packing into the container and the merchant is responsible for unpacking out of the container.
LEASING OF CONTAINERS:

Containers are taken on lease by carriers from container manufacturing companies. There are four types of leasing arrangements. i. ii. iii. Trip lease or short term lease: Here lease is taken for one voyage or one trip. Long Term Lease: Where containers are usually leased for 3 to 5 years. Financial Lease: This is more of a hire-purchase or instalmentpurchase scheme rather than a lease, as in this case, at the end of the term for which containers are taken on financial lease, the ownership of the containers is transferred to the shipowners. Master Lease: In this case one shipowner concludes a deal with a container leasing company for a period of usually 1-2 years whereby he guarantees that a minimum number of containers will alays be under his lease from the leasing company and as against this guarantee, the container leasing company also assure the ship-owner that a minimum number of empties will be made available to the shipowners at the various ports as agreed upon between the two contracting parties.

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MANAGEMENT OF CONTAINER SERVICE BY SHIPOWNERS/SHIP OPERATORS:

Ship - owners/operators enter into various arrangements to operate a container service. This becomes necessary because of very huge financial outlay required to acquire, maintain and operate container ships and service. Shipowners/operators sometime form container consortium. In a fully integrated container consortium, a separate legal or commercial entity is formed by amalgamation of two or more individual shipowners who contribute their effort, capital and market share in a container service in a specified trade route. The partners usually supply and man their vessels to the consortium on time charter basis. The number of vessels and their carrying capacity to be provided by individual shipowner is usually

determined on the basis of the individual market share of the partners commanded prior to formation of the consortium. There can also be Slot Charter Arrangements. Here two or more shipowner come into some slot charter arrangement and do not lose their legal or economic entity. The partners usually run their own vessels and expenses for the vessels are met by the partner to whom the vessel belongs. The slot capacity of the vessel is divided amongst partners depending on their previous market value. Towards each TEU or slot utilized by the other partners, a fixed amount is paid to the ship-owner/partner. This amount is revised regularly by joint discussions amongst the partners taking into consideration the revised operating costs, box rate levels etc. Marketing in a slot charter arrangement is usually done independently by each partners as against the consortium where marketing is done jointly. The disadvantage of slot charter arrangements is that the partners tend to compete more on the land leg of transportation by quoting cheater inland haulage rates etc. Shipowner sometime agree to have Joint Sailing Schedule. Joint Sailing Schedule can be operated by two or more shipowner through mutual agreement on joint schedule of vessels based on (a) Money pool where the revenue is pooled and distributed among partners depending on carrying ratio cost incurred and other factors (b) Joint ownership of vessels where contribution from various partners are usually to the extent to their respective quotas in carrying capacity (c) Independent or co-ordinated marketing set up. While operating a container service, there are two major limitations: (i) Size of the vessels, and (ii) Frequency. The size of the vessel will be determined by the port limitations, i.e. the limitation of the ports where the vessels have to call as regards the availability of required draught, quay length, equipments, storage areas etc. The frequency of service required by the trade also limits the vessel's size, e.g. if the sailing frequency is set too high, then cargo accumulation during the short gap between two sailings may not warrant a vessel of bigger size. If the sailing frequency is kept too low, then cargo may be lost to competitors and it may even tarnish the image of the shipowner. The frequency of service is more important presently as a large portion of international trade is conducted through letters of credit, which stipulate a last date of shipment and last date of negotiation of the document. In order to overcome the difficulty of frequent sailings and also to some extent overcome the problem of huge capital involved in containerisation, shipowners have organised themselves by forming container consortia, slot charter arrangements, joint sailing schedules, etc.

Feeder Service. Here the deep sea vessels or mother vessels, as they are called, only call at a few limited ports and cargo is accumulated at these ports by feeder service from other ports in the region. Feeder ships are small size vessels of around 300/400 TEU's. Sometimes this method leads to a longer transit time for the cargo reaching its ultimate destination. Presently most of the container shipping companies operate through feeder ships, which transfer the containers of deep sea or mother ships at specified ports. Singapore, Colombo and Madras have been serving as feeder ports where mother ships receive containers from feeder ships of the region.
CONTAINER TERMINAL AND EQUIPMENT:

A model container terminal may usually be divided into the following areas : i. The Ships Area : This comprises a quay line where the container vessels are breathed. Usually the modern container terminals are provided with gantries which are heavy cranes required to handle containers. There gantries are generally mounted on rails and move to and from along the entire length of the container vessels. The gantries are usually fitted with automatic spreader for faster handling of container, which is not possible if the individual containers are to be manually slung to the gantries. The modern container terminals usually have gantries with carrying capacity of 35-50 meters. The output of a gantry in a modern terminal is estimated at 20/25 TEUs per hour. Marshalling Yards: The rear portion of the ship's area is known as marshalling yard and is used to prestack a limited number of export containers as buffer stock for loading and also to prestack a limited number of import containers after being discharged from vessels and prior to their removal to container stacking yard. Stacking Yard or Container Yard: This is the area where the import containers are transferred from marshalling yard and stored until they are taken to container freight station, Inland Container Depots, Consignee's warehouses, etc. Similarly, this is the area where export containers are brought from ship operators warehouse, ICD, CFS, etc. prior to being moved to marshalling yard quay line for being loaded on board a vessel. Container yard is also used to stack empties. Usually the yard is divided into various subdivisions meant for stacking empties, export containers, import containers and, quite often, a seperate yard is provided for seperate shipowners.

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CONTAINERISATION IN INDIA:

The concept of containerisation was introduced in India in 1968 in a seminar held in Mumbai. Since then the Indian shipowners and the trade started considering its use. A working Committee report on the subject came out. Sometime in early 1970s, the Shipping Corporation of India Limited acquired its first semi-container ship with three holds designed to carry containers and other two holds to carry general cargo. Other shipping companies like Scindias and India Steamship followed suit. Later, India Steamship Company acquired a small cellular container ship. Hi-tech advancement of affording minimum packing to containerised cargo with special applications / coatings to prevent moisture, deterioraion, damage, etc., to cargo is available now to the Indian Exporter. Jawaharlal Nehru Port Trust, Navi Mumbai, has introduced a system by which inspection of containers is much faster than manual, thereby reducing congestion. The inherent advantages of moving cargo through containers (lesser wastage, faster delivery), combined with increased capacities at ports is expected to increase container penetration from current level of 16% to above 21% by 2012 (Goldmaz Sachs, May 08). The US based USI's electronic cargo inspection system is introduced in key ports. Out of 46,222 ships, general cargo ships were 18,150; container ships were 3165. DAs on Jan 06, over 18 million containers constantly criss cross the seven seas. 2006 will see introduction of 800 TEU plus containers in world shipping, to meet the growing needs. While 70% of goods movement is containerised globally, its 30-35% in India. Container cargo movement is undertaken by private parties also and they are allowed to tranship export cargo to container cargo carrying export cargo to ICD. This flexibility avoids transhipment. This is export facilitation measure. Indian container trade moved up to 7.2 mln TEUs by 07 from the level of 2.47 mln TEUs in 2000.

CONCOR

CONCOR has as many as 31 terminals perform the combined role of domestic as well as international terminals. CONCOR's customs bonded Inland Container depots are dry ports in the hinterland, and serve the purpose of bringing all port facilities including Customs clearance to the customer's doorstep. The terminals are almost always linked by rail to the Indian Railway network, unless their size or location dictates that they be linked by road. CONCOR's terminals provide a spectrum of facilities in terms of warehousing, container parking, repair facilities, and even office complexes. As CFS operator, CONCOR adds value to the logistics chain by offering value added services such as

Transit warehousing for import and export cargo Bonded warehousing, enabling importers to store cargo and take partial deliveries, thereby deferring duty payment. Less than Container Load (LCL) consolidation, and reworking of LCL cargo at nominated hubs Air cargo clearance using bonded trucking

The key value we offer is the provision of a single-window facility coordinating with all the different agencies and services involved in the containerized cargo trade, from Customs, Gateway Ports, and Railways, to road hauliers, consolidators, Forwarders, Custom House Agents and shipping lines. IT forms the backbone of any service industry and improved levels of efficiency can be done through working partnerships among all those involved to improve logistics services through the use of information and network technology. CONCOR is using various online applications like Export/Import Terminal Management System (ETMS), Oracle Financials-ERP, etc. Facility for electronic filing (e-filing) of commercial documents of CCLS(Container and Cargo Logistic System) has been provided to customers. This facility enables customers like Shipping lines, Importers, Exporters and CHA's to file the required documents online for process and take necessary printouts of processed output through web from anywhere without physically coming to ICD. CONCOR has its own WebServer for providing web interface to the commercial applications i.e. ETMS, CCLS, DTMS etc. The web interface

enables our customers to access information regarding their shipments by means of the website. An integrated track and trace system was also implemented on CONCOR website for providing Container Tracking Details. The inhernet advantages of moving cargo through containers (lesser wastage, faster delivery), combined with increased capacities at ports is expected to increase container penetration from the current level of 16% to above 21% by 2012 . Issues on Containerisation
Additionael 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. However, for most goods the increased fuel costs and decreased transport efficiencies are as of 2011 more than offset by the savings in handling costs. On railways the maximum weight of the container is far from the railcar's maximum weight capacity, and the ratio of goods to railcar is much lower than in a break-bulk situation. In some areas (mostly the USA, Canada, Australia and India) containers can be carried double stacked by rail, but this is usually not possible in other rail systems Hazards Containers have been used to smuggle contraband. The vast majority of containers are never subjected to scrutiny due to the large number of containers in use. In recent years there have been increased concerns that containers might be used to transport terrorists or terrorist materials into a country undetected. The U.S. government has advanced the Container Security Initiative(CSI), intended to ensure that high-risk cargo is examined or scanned, preferably at the port of departure. Empty Containers Containers are intended to be used constantly, being loaded with new cargo for a new destination soon after having been emptied of previous cargo. This is not always possible, and in some cases, the cost of transporting an empty container to a place where it can be used is considered to be higher than the worth of the used container. Shipping lines and Container Leasing Companies have become expert at repositioning empty containers from areas of low or no demand, such as the US West Coast, to areas of high demand such as China. Repositioning within the port hinterland has also been the focus of recent logistics optimization work. However, damaged or retired containers may also be recycled in the form of shipping container architecture, or the steel content salvaged. In the summer of

2010, a world wide shortage of containers developed as shipping increased postrecession, while new container production had largely ceased.
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. For instance, on November 30, 2006, a container washed ashore. on the Outer Banks of North Carolina USA, along with thousands of bags of its cargo of Doritos Chips. Containers lost in rough waters are smashed by cargo and waves and often sink quickly.] Although not all containers sink, they seldom float very high out of the water, making them a shipping hazard that is difficult to detect. Freight from lost containers has provided oceanographers with unexpected opportunities to track global ocean currents, notably a cargo of Friendly Floatees. In 2007 the International Chamber of Shipping and the World Shipping Council began work on a code of practice for container storage, including crew training on parametric rolling, safer stacking, the marking of containers and security for above-deck cargo in heavy swell. In 2011, the MV Rena ran aground off the coast of New Zealand. As the ship listed, some containers were lost, while others were held on board at a precarious angle.

Trade Union Challenges

Some of the biggest battles in the container revolution were waged in Washington, D.C. Intermodal shipping got a huge boost in the early 1970s when carriers won permission to quote combined rail-ocean rates. Later, non-vessel-operating common carriers won a long court battle with a U.S. Supreme Court decision against contracts that attempted to require that union labor be used for stuffing and stripping containers at off-pier locations.