Containerization: impacts on global trade

Containerization is a system of intermodal freight transport using shipping containers . The containers have standardized dimensions. They can be effective in terms of loading and unloading, stacking, transport efficient for long distances. Also, they are transferable from one mode of transport to another such as container ships, rail transport flatcars, and semi trailer track without opening. The handling system is completely mechanized so that all handling is done with cranes  and special forklift trucks. Computer systems number and track all containers.

Impacts of containerization on global trade

Containerization emerged several centuries ago but became popular after World War II. After effective use of containerization there were major impacts on global trade such as:

  • It dramatically reduced the costs of transport
  • Supported the post-war boom in international trade,
  • Major element in globalization.
  • Containerization did away with the manual sorting of most shipments and the need for warehousing.
  • It displaced many thousands of dock workers who formerly handled break bulk cargo.
  • Containerization also reduced congestion in ports
  • Significantly shortened shipping time
  • Reduced losses from damage and theft

Emerging markets and containerization

An emerging market economy is the economy of a developing nation that is becoming more engaged with global markets as it grows. As an emerging market economy progresses it typically becomes more integrated with the global trade. Containerization has been a catalyst for globalization. A container can be of use anywhere in the world. Additionally, ships, port equipment etc. adjusts to handling them with optimum efficiency and with big economies of scale. Manufacturers can optimize their packaging to fit into a container and thus lower the unit cost of transportation. Containers can also be made of weathering steel to minimize maintenance needs. By lowering the costs of trade containerization has encouraged specialization and the expansion of global supply chains. Emerging market economies’ governments usually pursue deliberate industrial and trade strategies to encourage economic growth and industrialization.

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