The snacks you enjoy between meals. Smartphones you use to communicate with the outside world. Plus, nearly every item you see in your home, in a store, or in your workplace. These things get from point A to B through a distribution network that uses shipping containers.
But before shipping containers existed, goods took longer to distribute and arrive at their final destinations. As the history of shipping containers reveals, using barrel crates and boxes wasn’t the most efficient way to move items.
Fortunately, American entrepreneur Malcolm McLean had the idea for shipping containers. His idea was born out of a desire to increase his distribution network’s efficiency. Without his invention, we might still be dealing with even more supply chain delays today.
This article examines the history of shipping containers and the impacts of their invention on the global trade network.
History of Shipping Containers
For most of us, it’s hard to imagine a world without shipping containers. Although they’re not much to look at, we see them on trains, ships, and roads. While we can’t see what’s in them with the naked eye, we know they’re filled with products the world needs.
Because goods were originally transported in bulk in different containers, it took longer for products to go from factories to warehouses and then stores. These containers included crates, barrels, boxes, and sacks. While practical, these containers were limited in size.
So while boxes and sacks could transport products from one place to another, only so much could fit at one time. Because of this problem, Malcolm McLean came up with the idea of a standard shipping container. He worked with engineer Keith Tantlinger on the design.
Once the design was satisfactory, McLean got a patent for his idea. McLean not only wanted to save shipping time but also come up with a versatile shipping method. In other words, a container that companies could use on land and sea.
Precursors to the modern standard shipping container emerged in Great Britain in the 18th Century, in the 1830s among railroad companies, and among U.S. Army forces during World War Two. However, McLean invented what we use today in 1956.
At the time, McLean was the owner of a trucking company. He did not ship goods across the ocean but wanted to improve shipping efficiency and make it more versatile. So, McLean wanted a seamless way to load and unload products from one transport method to another.
The idea came from observing employees in his own company load and unload goods. McLean saw how inefficient the process was with different sizes of wooden crates and cases. After buying Pan Atlantic Tanker Company, McLean started trying out new ideas.
After Mclean brought his shipping container idea to life, the first one shipped out in April of 1956. Its name was dubbed Ideal X. The container made its first journey from Port Newark to Houston.
Why Did Inefficiencies Exist
Now you might be thinking, what’s the big deal? As long as products are put into containers and loaded and unloaded, there shouldn’t be that much of a difference. However, before the invention of the shipping container, boxes and crates could be of different sizes.
If you’ve ever had to move, you know that various box and container sizes can slow you down. It’s more challenging to arrange them in a truck because of the various shapes and lengths. You’ve got to spend time figuring out how to arrange and rearrange everything so it fits.
You might also have to unpack and repack things to make everything fit. Activities like these were common before standardized shipping containers. Loaders would take products out of one container and repack them in another as goods made their way across a trade network.
This obviously created problems and unnecessary delays. Imagine having to do this at several points in the network. Slowdowns could create additional lulls that took up to three weeks of shipping time. In today’s environment, these pauses would create havoc and disruption.
Role of U.S. Army
The U.S. Army knew that to be effective, it had to find a way to easily transport supplies to the front lines during the Second World War. So, defense teams began using small containers that were the same size to deliver bombs, guns, and other supplies like meals.
In a sense, U.S. Armed Forces were ahead of their time. But they also recognized the same problem as McLean did. There were inefficiencies and unnecessary steps in distribution networks. Standardization was the key to transport efficiency.
McLean took a relatively similar idea and expanded its size. Instead of small, standardized containers, ones for shipping became 33 feet and then 35 feet in length. Original shipping containers were also eight feet tall and wide.
Impact on Global Trade
Besides reducing shipping times and increasing overall efficiency, standard shipping containers helped reduce costs. Before shipping containers’ invention, it cost $5.86 a ton to load a ship. With standard containers, the cost went down to 16 cents a ton.
That’s an impressive cost reduction! Think about how much companies could control costs and pass savings on to consumers because of standard shipping containers. Furthermore, shipping containers are made from steel. They protect the products inside them much better.
Whether the outside weather is calm and balmy or cold and snowy, goods can make it intact. Plus, you can lock up shipping containers. This helps prevent the theft of products while they’re in transport.
Overall, shipping containers have enabled the development of global trade. The efficiency, safety, and durability make it possible to create cost-effective international distribution networks. Without shipping containers, globalized trade would be clunky at best.
Changes to Standard Shipping Containers
Today’s typical shipping containers are 20 feet long, eight feet wide, and nine feet tall. This represents some modifications to McLean’s original idea. But regardless of this change in size, shipping containers fit neatly on ships, rails, and truck flatbeds.
Containers help maximize the space available on a boat or vessel. There usually isn’t any wasted space. This is because all shipping containers have the same width, despite potential differences in length and height.
While trade can occur between any nation, most shipping containers travel between Europe and Asia. A large number of shipping containers also go over the Pacific. This is likely due to the high amount of goods made in Asian countries.
Impact on Ship Size
Once standard shipping containers became the way to transport goods, ships began to get bigger. Think about it. The more containers you can fit on a ship, the more you can trade. And that translates to a healthier bottom line for many companies.
Modern ships can carry up to 24,000 shipping containers. That’s a ton of goods and supplies! If you were to line up those containers in a row, it would extend for 44 miles. However, it’s still cost-effective to ship this many containers on one ship.
Before the COVID-19 pandemic, the expense to ship a 20-foot container from Asia to Europe costs the same as a coach airline ticket for the same distance. There are over 20 million shipping containers in use because of this cost efficiency.
An overwhelming majority of products are shipped this way. About 90% of the things you and I buy are within a shipping container at some point.
Will Something Replace Shipping Containers Someday?
While a new invention may replace shipping containers, right now it’s highly unlikely. McLean’s invention seems to have proven the test of time. It’s the way global trade has happened since 1956 and doesn’t show signs of slowing down.
What seems more possible is improvements to standard shipping containers. Perhaps other size and material changes will occur. It is likely containers will be made more secure and durable. But unless someone can improve on any existing inefficiencies, containers will persist.
Another thing we know is that people are repurposing shipping containers. They’re being used to create homes and backyard offices or add-ons. The average lifespan of a shipping container is 25 years as long as it’s traveling over the ocean.
So, this lifespan may be less than desired. Using other materials or additional materials may help extend the average lifespan whether the container is in use or repurposed.
The history of shipping containers starts before their official invention and launch in 1956. Before shipping containers existed, transporting products was inefficient at best. It took too long to transfer goods into containers and unload and load trucks and ships.
British society and the U.S. Army were some of the first individuals to think of standardized alternatives. These inventions were precursors to Malcolm McLean’s invention of the modern shipping container. McLean was an entrepreneur who wanted to standardize distribution.
Although the size of shipping containers has changed somewhat, they’re still largely modeled after the original invention. The world continues to trade goods across oceans and national lines. Whether shipping containers evolve is up to today’s entrepreneurs and business leaders.