Monday, May 20, 2013

Container Shipping -- A key technological innovation

Source: The Economist
I quote from an article in The Economist:
(B)etween 1966 and 1983 the share of countries with container ports rose from about 1% to nearly 90%, coinciding with a take-off in global trade,.......In a set of 22 industrialised countries containerisation explains a 320% rise in bilateral trade over the first five years after adoption and 790% over 20 years. By comparison, a bilateral free-trade agreement raises trade by 45% over 20 years and GATT membership adds 285%. 
Though containers brought some early savings, shipping rates did not drop very much after their introduction......More important than costs are knock-on effects on efficiency. In 1965 dock labour could move only 1.7 tonnes per hour onto a cargo ship; five years later a container crew could load 30 tonnes per hour (see table). This allowed freight lines to use bigger ships and still slash the time spent in port. The journey time from door to door fell by half and became more consistent.
The technological innovations that cut transportation costs and transportation delays were obviously key elements in globalization. Innovations in communications were obviously also very important as were the improvements in computer technology that led to improved port and shipping management.

I underline that there were many complementary innovations -- containers were shipped on bigger ships, meaning that ship building had to change. Port technology changed to allow the containers to be lifted whole from the ships. Trucking changed to accommodate the containers. The technology to keep track of the containers changed, as did the technology to keep huge ships on the sea as much as possible.

Just because we don't see a technological revolution doesn't mean that it isn't changing our lives!

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