The future of Shipping Containers | LOTUS Containers

The future of shipping containers or freight containers can be determined by looking at the past. The time when containers came into existence, it is from then; the containers and containerization have been evolving with every passing time.

With the growing population and demand, the need to make goods available on time becomes crucial. This increases the need for import and export- consecutively the need for containers- their availability and flexible movement. As this need grows, there is a need for more optimization which could further increase productivity and yield better output.

Why are shipping containers important?

The shipping container is one of the most important assets of today’s world yet it has been one of the most underappreciated drivers of the modern global economy. Its contribution to world trade and globalization has been enormous. They largely supplanted break bulk cargo- the drums, sacks, buckets, pallets, and barrels that were loaded manually into ships, trains, and trucks.

It dramatically reduced the handling costs all around and increased efficiency that was a major challenge of those days. Cargo containers can be efficiently stacked, allowing more goods to be transported at once. Larger ships were built, port infrastructure was improved, and freight insurance rates fell as cargoes were more secured. It led to a boom in international trade.

Container industry- in the future

There could be both positive and negative consequences of increasing global trade and containerization. Let’s see how?

Containerization

As we discussed earlier, the growing need for goods across the world has risen the need for more containers, fast deliveries, wide port areas, technical advancement, etc. Manufacturers are now focusing more and more on containerization instead of just focusing on the manufacturing of goods. They are finding ways to ship more goods and accommodate a greater number of goods in one single unit. They are considering ways through which the available space or dimension of the containers can be used more efficiently.

The future is of Smart Containers

Smart containers have been one of the most discussed topics in the shipping industry these days. It is an advancing trend that will continue to spiral as the world gets more into technology. It provides end-to-end visibility and traceability. It is fitted with internet-connected devices and has interconnected sensors that gather information and transmit container data. The system helps to provide real-time insight about cargo condition, inside temperature, container positioning, arrival date & time, etc.

The aim of making containers smart is to advance container tracking and increase security. It embraces the Internet of Things (IoT) to support enhanced decision-making. This provides greater transparency and insights about the consignment from the point of origin to the point of destination.

There is a lot to keep track of when shipping or ordering anything. We don’t want to miss out on track for a very general product ordered from Amazon, how can one rest assured of large shipments carrying extremely valuable belongings.

Smart Container helps with insights related to-

• Whereabouts of the container at any given time
• Monitor the internal ambient temperature
• Monitor humidity & moisture levels inside the container
• Shock detection
• Door opening and closing status
• Whether the shipping container is still securely locked
• Late in and outs of the boxes
• Spilling of the cargoes
• any unusual activity

Asserting this need, the logistics industry is focusing more to transform every container into smart containers. Without much modification, containers can be made smart. This can be done by fitting devices like sensors, GPS, transmitters, cameras, etc.

Port area optimization and diversification

As international trade is on a surge, the vessels are getting bigger, ports are becoming more congested, and containers are getting out of stock. With the growing volume of incoming and outgoing containers, the port area will need expansion and advancement altogether. Optimization does not only mean improving productivity rather it would be a new approach to managing container ports, depots, and terminals.

More container depots will be required to be made nearby the main port area. Smaller ports or less used ports will need better infrastructural development so that in case of main port congestion, vessels can be diversified to other ports instead of bringing all of them to the main port. For this, the smaller ports will need modification to provide loading and unloading facilities for big vessels.

Mergers and Acquisition

The arrival of containerization has led to the increase in international trade volume which further led to the merger and acquisition of various carrier companies and ports. If we go back to history, we would see a list where companies have merged to form a bigger organization.

Let’s look at some of the mergers and acquisitions happened in past

• In 1977 McLean Malcolm acquired US lines.
• In 1982 U.S. Lines acquired the Moore-McCormack fleet and routes.
• In 1985 U.S. Lines acquired ships and other assets of Delta Steamship Lines.
• In 1989 Hamburg Sud acquired a 50% stake in Ybarra Sud y Cia. Sudamerica S.A. (Ybarra Sud)
• In 1990 Hamburg Sud acquires Rotterdam-Zuid America Line and several divisions of Furness Withy (Shipping)
• In 1993 A.P. Moller took over the Danish East Asiatic Co., known as EAC, including its Far East & Australia container liner business.
• In 2016 CMA CGM Group acquired the majority share of Neptune Orient Lines (NOL) and its principal operating brand APL.

Mergers and acquisitions have been happening for a very long time. But it is more on the rise and expected to be seen more in the coming future.

Some giant consolidation could create a threat to small entities or newcomers as it would lead to monopoly and hence will eventually give them the power to dictate terms regarding the price, timeframes, policies, etc.

As per a report, at the beginning of 2018, the top 15 carrier companies accounted for more than 70% of the total market share which is expected to be 70% dominated by the top 10 companies by the mid of 2018. This figure is likely to increase with more and more alliances and consolidations.

Shipping containers as quirky buildings

Gone are those days when containers were used solely for shipping and storage. Far away from the shipping industry, containers have found a new way to be the centerpiece. Yes, we are talking about shipping container architecture, also termed as cargotecture in which 20ft and 40ft cargo containers are modified into beautiful buildings.

England is facing a huge housing crisis. As per a report served by Housing charity Shelter, more than 50, 000 households are forced to leave their house and more than 9 million are residing in an unsecured rented place. Besides this, housing prices are rising incessantly. In all these cases, people find a container-built home a better option. As these are affordable, portable, and take very little time to build one in contrast to traditional buildings.

The idea might seem odd or impractical. But it is going to be the future trend- be it necessity or vogue. The global container homes market is expected to grow at a CAGR of 6.5% from 2018 to 2025. There are various innovative and creative uses of shipping containers- whether you talk about houses, offices, stores, shopping malls, sauna, gymnasium, or swimming pool- anything can be built out of it. Thanks to creative thinkers! What made them capable of being suitable for constructing buildings- their durability, strength, and portability? These quirky buildings have been one of the greatest fascinations across the world. And it is estimated to grow more. It is going to be the future of affordable housing. The unavailability of lands and money makes them a perfect housing option.

Climatic Concerns

Though freight containers cause no harm to the environment, shipping does. Ships are alone responsible for more than 18% of air pollutants. The IMO estimates that CO2 emission from shipping is equivalent to 2.2% of the emission made by humans globally in 2012. The figure is expected to rise from 50% to 250% by 2050. This is one of the major concerns. To counter this, more and more regulations are being introduced. For ex- IMO 2020. All of this will have an impact on shipping giants to work in compliance with regulations set by the International Maritime Organization (IMO) and other global institutions. New technologies will be introduced to reduce the environmental impact. All of this will have a slight or major impact (depending upon the situation) on the pace at which the container industry is expected to boom

In summary

There are going to be both positive and negative consequences in the container industry as we move into the future. But humans have always been known to conquer the challenge and seek growth. The best part is container shipping will sail into a future driven by technology. And this alone will bring about major transformations in the way shipping is done now. If you’re looking to lease or buy shipping containers in USA, Europe, China, or any part of the world, LOTUS Containers comes to be ubiquitous. Let us know your requirements and our team will be right there to serve you.

I hope this article gave you a detailed insight covering the past, present, and future of containerization and shipping! We look forward to posting more informative blogs like this. Stay tuned!