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What is containerization?

Paper Type: Free Essay Subject: Education
Wordcount: 869 words Published: 1st Jan 2015

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Introduction to Containerization

Containerization is a system of intermodal cargo transport using standard ISO containers that can be loaded on container ships, railroad cars and trucks. It has revolutionized cargo shipping. Today, nearly 90% of non-bulk cargo moves by containers put on transport ships.


Containerization is an important cargo-moving technique developed in the 20th century. It has formed an integral part of logistics the world over, India is no exception too. The idea of containerization and its reaping benefits in handling freight transport in both developing and developed economies will help open ways for global trade practices.


  • The Indian Railway Minister, Shri Lalu Prasad Yadav has taken the initiative for Private-Public Partnership between the Indian Railways and 14 private container train operators to look up various issues because containerization is treated as a sunrise industry.
  • This is aimed at not only increasing the rail share of container traffic but also introducing competition in the intermodal rail freight market leading to service improvements.
  • It also contains enabling provisions to meet the future requirements in terms of infrastructure and technological developments.
  • It will also help increase the volume of GLOBAL TRADE possible and more happening through complex supply chains in India.


Increased efficiency

Although there have been few direct correlations made between containers and job losses, there are a number of texts associating job losses at least in part with containerization.

Additional fuel costs

Containerizations increases the fuel costs of transport and reduces the capacity of the transport as the container itself must be shipped around not just the goods. For certain bulk products this makes containerizations unattractive. For most goods the increased fuel costs and decreased transport efficiencies are currently more than offset by the handling savings.

Empty containers

Damaged or retired containers may also be recycled in the form of shipping container architecture, or the steel content salvaged.

Loss at sea

Containers occasionally fall from the ships that carry them, usually during storms; it is estimated that over 10,000 containers are lost at sea each year.


Biggest ISO container companies

Top container shipping companies in order of TEU capacity, 17 August 2009


TEU capacity

Number of ships

A.P. Moller-Maersk Group



Mediterranean Shipping Company S.A.






Evergreen Marine Corporation





GLOBAL TRADE is exchange of capital, goods, and services across international borders or territories In most countries, it represents a significant share of gross domestic product (GDP).

Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the GLOBAL TRADE system

Regulation of Global trade

The regulation of international trade is done through the World Trade Organization at the global level, and through several other regional arrangements such as MERCOSUR in South America, the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, and the European Union between 27 independent states.


GLOBAL TRADE is a major source of economic revenue for any nation that is considered a world power

International trade uses a variety of currencies, the most important of which are held as foreign reserves by governments and central banks.

Risk in international trade

Companies doing business across international borders face many of the same risks as would normally be evident in strictly domestic transactions. For example,

  • Buyer insolvency (purchaser cannot pay);
  • Non-acceptance (buyer rejects goods as different from the agreed upon specifications);
  • Credit risk (allowing the buyer to take possession of goods prior to payment);
  • Regulatory risk (e.g., a change in rules that prevents the transaction);
  • Intervention (governmental action to prevent a transaction being completed);
  • Political risk (change in leadership interfering with transactions or prices); and
  • War and Acts of God.


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