Future of Containerization

in Logistics

Sarath Chandran PVrushali Mandlekar

MBA P&SM

•What is containerization?

•Containerization as backbone of logistics

•Advantages

•Global Scenario

•Indian Scenario

•Future ahead

Overview

Containerization (or containerisation) is a system of intermodal freight transport using standard intermodal containers.

The global standardization of containers and container handling equipment was an important innovation in 20th century logistics.

In 1955, Malcolm McLean worked with engineer Keith Tantlinger to develop the

modern intermodal container.

During 1930’s they were used a as a form of Piggy back service (transporting highway

freight trailers on flatcars)

Employed in Coal mines around England and Germany during late 1870’s

Evolution of Containerisation

Standardization of Size of Containers and introduction of dedicated ships and terminals

First containerized route was between Seattle

and Alaska in 1951

The first vessel built to carry containers began operation in Denmark in 1951

Benefits of Containerization

Suitable for cargo in lots and small in size.

Protect the cargo from Human and Natural factors

Saves Time and Labor cost

Ensure better handling of the cargo

Containers act as a mode of storage

Containerisation reduces transit time, which in turn reduces inventory

cost and increase reliability

Current ScenarioMore than90% of world merchandise trade is carried by sea and over 50% of that volume is containerized

Enabled a greater velocity in freight distribution

Opened new global market for EXIM trade

Increase in efficiency of transport terminals

How container shipping changed the scale and scope of global freight distribution

Source: World Container Traffic, 1980-2008 (Drewry Shipping Consultants, 2007) and Projections to 2015

Growth Scenario

Global Scenario in relation toMaritime Shipping

Over Capacity of Shipping fleet Vs Current Demand

Change in economy of scale of vessels

Larger vessel creating pressure on terminal & access routes

Higher energy cost and Port congestion

Location / geography of trade

• The container traffic handled in various ports across India has grown at the rate of 6.7% during 2009

• Development of Infrastructure facilities to increase efficiency and productivity of terminals.

• Development of CFS and ICD to service the secondary hinterland

• Introduction of PPP projects in Container Terminal development and allied infrastructure.

Indian Scenario - Containerization

The future ahead for containerization

A Growing Divide between Sea-based and Land-based Operations?

A Multiplication of Routing Options?

A Continuing Global Spatial Divide?

An Evolution or a Revolution?