August 3, 2022
2
min. read
Containers and Digitization
Introduction
The implementation of the container is often hailed as one of the ten greatest inventions from the last century. It revolutionized the ability to move cargo around the world. A metal box made the world smaller and the economy bigger. However, we often view containers at a cursory glance. One reason might be that their ubiquitous nature commoditizes them – they appear to supply chain professionals on paper, in excel sheets, and at port. While they can appear as commonplace as bread, that just indicates their importance and usefulness. It should not keep us from appreciating their impact and beauty in the world. At Logward, we see this being restored in how digital advancements build on the functionality of the container to make the smaller world and bigger economy more transparent and accessible.
History of Containers
It was American shipper Malcolm McLean who, in 1937, thought that loading the entire truck body onto the ship would be way more effective than waiting for his truck to be unloaded at a New Jersey Pier. Nearly 20 years later, a shipment of 58 containers from Newark to Houston marked the beginning of the container-era. Five years after that, the International Organization for Standardization (ISO) determined the effective uniform measurements for boxes. The container symbolized economic rationalism and unity. Today, more than 90% of non-bulk cargo gets transported via containers.
Containers and Globalization
Those newly implemented and standardized containers sped up the growing interdependence of the world’s economy because international containerization (and its standard size) fundamentally reduced the costs of transportation. This rationalized the different variety of traditional break bulk transport, accelerated cargo loading and transshipment operations, improved flexible cargo planning, and simplified the purchasing management.
By the 1980s, over 100M tonnes of cargo freight were shipped in containers each year. Elevated mechanization, plus inter-modality, were the driving force behind the global expansion of containers. The remarkably fast diffusion of the container technology worldwide, and the improved marginal distance cost compared to the higher fixed cost, shows the contemporary basis for its revolutionary character.
Containers and Digitization
We see these benefits amplified when bringing containers to the digital world. While the container let us send goods across the globe, digitization lets us do it more efficiently. We see this today as both rail and road transport, for example, are operating at their capacity limits. Since freight transport accelerated there, it required faster processes in order to improve the efficiency of cargo handling. Digital tools help to plan and allocate containers in order to keep up with the increasing shipping volume and not exceed capacities. Again, containers’ standardization allows these tools to reduce variability in their calculations.
Prospects for Supply Chain Management
In Around the World in 40 Feet; Two Hundred Days in the Life of a 40FT NYK Shipping Container, Richard Cook and Marcus Oleniuk share 216 pages of photographs documenting an astonishing voyage. The narrative unfolds: a container travels six continents, innumerable visitors, many cultures, and countless tons of goods. Simply put, it visualizes how the container unlocks endless possibilities. And why do I share this?
Because digitization furthers the limitless potential of supply chains (except Cook and Oleniuk would be sharing screenshots of dashboards and diagrams instead of majestic vessels in this book). With innovations such as artificial intelligence, warehouse automations, blockchain technology, data analytics, and cloud computing dig into new challenges - there are various ways to ignite the potential of an effective supply chain. What a metal box accomplished with its simplicity; a new digital ecosystem exponentiates with its complexity. And we live in this era.
Upshot
You don’t transform your supply chain into a real value driver with just containers and fancy software. It’s more about having a wholistic understanding of your supply chain end-to-end. Stakeholder management, process simplification, and data analytics are at the heart of that. Our goal is to make that as simple as putting your cargo in a metal box.
Logward is a Hamburg & Bangalore based logistics technology company.
We build software, move containers, and change mindsets.
If you have any questions or just want to say hi, reach out to mail@logward.com. Or you can book time with one of our logistics experts here.