AustLII Home | Databases | WorldLII | Search | Feedback

Maritime Studies

Maritime Studies (MarStudies)
You are here:  AustLII >> Databases >> Maritime Studies >> 2006 >> [2006] MarStudies 8

Database Search | Name Search | Recent Articles | Noteup | LawCite | Help

Mathai, Mathew --- "Unforeseen Consequences: How a box changed our lives" [2006] MarStudies 8; (2006) 147 Maritime Studies 14

Unforeseen Consequences: How a box changed our lives

Captain Mathew Mathai[1]

Containerisation is a remarkable achievement for modern mankind. Perhaps the most remarkable aspect of its short heritage is that no one foresaw how the box would change the pattern of global trade along with the ships and ports connected with it.

It may not be a day of celebrations and fireworks but 26th April 2006 marked 50 years of containerisation. Its small beginning was that 58 aluminium containers were loaded on board a modified vessel, the Ideal X, for a five day voyage from New Jersey to Texas, USA. The man behind the venture was Malcolm McLean who, without a maritime background, understood that the container could improve efficiency in the way cargo could move seamlessly between a truck to a ship to a train.

And of course, the Greeks had the idea of putting cargo in a unit nearly 3000 years ago. But no one in the modern age saw McLean’s idea – detaching truck bodies from their wheels and carrying the bodies on special ships – as something revolutionary. Perhaps the experts then thought of America’s declining coastal trade and wondered if this ‘minor innovation’ could prove to be viable.

McLean’s enterprise became Sea-Land Services, an international shipping company which in recent times has evolved to be called Maersk Sealand. It was not smooth sailing for McLean, as the route to modern container shipping was littered with mistakes. McLean ordered the largest and fastest cargo ships ever built, only to find the fuel-guzzling ships became money losers in the 1973 oil crisis. In 1982, he reversed course, this time buying even larger vessels meant to sail around the world slowly, to economise fuel. The opposite happened. Falling fuel prices gave McLean’s competitors the advantage to build faster and lesser fuel efficient ships.

This history should be humbling to fans of modern management methods. Flexibility is a virtue in the container shipping industry, as business-school basics provide little guidance in the face of disruptive changes that can alter this industry’s very fundamentals.

Containerisation gave birth to standardisation. ‘I’ve been everywhere in the world, but all the world over containers look the same,’ says Bozo Plazonic, the Croatian captain of the container ship Ville D’Orion. This observation fits very well into the late 20th century’s quest for mass production and economies of scale. Every day in the year 2004, some 15 million or so containers found their way into the world’s trading systems, with nearly half of them afloat on board ships at any one time.

Some of the world’s great ports like London, Liverpool, New York and San Francisco were in the past also the centres for manufactured goods. Goods that could not be exported profitably before containerisation became a possibility as a result of moving production to places like China and Korea. By dramatically reducing freight costs, the container has transformed economic geography. Containerisation was one contributing factor of erasing the vast apparel industry of New York State, USA.

Containerised shipping is a rational way of transporting most manufactured and semi-manufactured goods. This rational way of handling the goods is one of the fundamental reasons for the globalisation of production. Containerisation has therefore led to an increased demand for transportation and, thus, for further containerisation.

Yet today, the humble container unites the makers of garments in the Pearl River Delta in Southern China with buyers and sellers all over the world. In the past two decades, Asia has become the manufacturing powerhouse of the world. The mostly one-way containerised trade volume between Asia and the rest of the world has grown tremendously. Maritime commerce trends towards bigger container ships.

Until 1988, the largest container ships, the so-called Panamax-size vessels were built with a limiting breadth of 32.3 metres, constrained by the length and breadth of the lock chambers of the Panama Canal. In 1988, the first post-Panamax container ship delivered a capacity of approximately 9,000 containers and exceeded the Panamax breadth by nearly 10 metres.

Even the Panama Canal Authority has decided that it is time for a refit. ‘It’s no longer the canal that comes first and dictates the size of the ships,’ said Bozo Plazonic. ‘What's driving the shape of ports, ships, maritime insurance and even the Panama Canal itself now is containers.’

At around the same time this week, the Chief Executive of Panama Canal Authority announced plans to build a third set of locks parallel to the existing ones that will cater mainly to the post-Panamax container ships up to 50 metres wide. The project will cost US$5.3 billion and is expected to be completed in 10 years.

However, investigations on the ultimate container carrier carried out by Professor Wijnolst in 1999 indicate that in about 10 years, the ‘Ultra Large Container Ship’ would perhaps carry 18,000 containers, with a ship breadth of 60 metres and a maximum draught of 21 metres. A draught of 21 metres is the maximum permissible draught through the Malacca Strait.

The name ‘Malacca-max’ has therefore been coined for ships of this size. Perhaps a day in the not-too-distant future, a mechanism to ensure safe watchkeeping on board these mammoth vessels would also need ‘over-the-horizon’ information, so to speak for ships in the Straits. This type of information may become necessary to avert bunching of large vessels at the narrow points in the Straits.

Containerisation is still a revolutionary force and continues to rock the modern boat. It is claimed that the transportation cost per container for such a big ship may be about 30 per cent lower than that of a typical 5,000-6,000 teu container vessel of today.


[1] Nippon Maritime Center, Singapore


AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.austlii.edu.au/au/journals/MarStudies/2006/8.html