Containerization

A new dynamics for containerization

Containers should be viewed as part of the commodity chain but not only as a transport unit. The movement of goods by use of the containers from the manufacturer to the retailer involves many activities. These activities occur at the terminals and the centre of distribution. The favorable activities of the containerization have led to emergence of a global production and distribution networks. The conventional growth of the dynamics of containerization relied on several factors like derived volume linked with globalization, substitution of breaking of bulk traffic into traffic which is containerized. Many of the global markets are not yet fully containerized.

In conventional containerized marketing, changes are derived from the ebb and flows of commercial activity and much less from the geographical and functional diffusion of the container. Commodities chains can be considered as component of containerization. The commodities can be of different type; some are durable others, perishable and fixed. Fixed commodity value is derived from their utility in terms of demand supply. Each mode of transport has its own advantages and therefore containerization is more of a complementary means rather than that based on competition.

Potential markets

There is still much to be done in order to access fully the use of containers. Some of the containers are fully utilized containerization while others are still at the early stages. Many segments of raw materials and food commodity chains are in the process of being containerized which will make it have a considerable market share internationally.

Containerization has got several benefits from the economies of scale. Economies of scale are very important very essential for terminal operators as well as maritime shipping. Containerization has effect on the market of the commodity due to the large volumes concerned. The function of distribution plays a significant role in the setting of future or forward contracts.

Commodities in containers

Containerization is faced with several challenges due to the nature of the commodities it deals with. These problems are faced in the loading and offloading of goods from the containers. Containers at times need to be prepared well before loading of goods to avoid any possible shipping contamination. This involves cleaning of the containers. When loading also there is need to consider weight balancing of the containers. Also some containers are constructed to accommodate specific amounts of weight and therefore weight should be normalized when handling them.

Transloading and terminal issues

Most commodities extracting regions tend to be located inland, while manufacturing and consumption tend to take place mostly in costal regions. There is a preference at major gateways to transload maritime containers into domestic containers in addition to the significant unit advantage it confers as the contents of the three maritime containers are transshipped into two domestic containers. Bulk and containers usually rely on different terminal characteristics.

Containerized commodity chains

The are two complementary commodity chains which are commonly used:

Bulk commodity chain: Based on the specialization of terminals, often by the specific commodity since each require specialized handling of storage facilities. This system has inefficiencies and its level of usage is lower in reality.

Containerized commodity chains: It involves niche markets where products separation smaller batches, delivery time and accessibility are more important. It also faces a empty movement challenge as it is the case in the bulk commodity chain. The integration of movements of commodities within containerized distribution systems involve some challenges as there is difference in dynamics.

Reference

Burg, D.V. (1976) Containerization and other unit transport. USA: Rowman & Littlefield Pub Inc

Huat, L.H. (2000). Containers, containerization & quay cranes: A practical guide (21st century containerization series): V.T. Editorial consultancy

Levinson, M. (2008). The box: How shipping container made the world smaller and the world economy bigger. USA: Princeton University Press

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