A Simple Guide to Shipping Containers 

How metal boxes changed the world

A diagram showing various measurements related to a multimodal shipping containers and container ships.

Why are shipping containers important?

Every year, trillions of goods make their way from factories to the hands of consumers—quite literally, as the current size of global trade is estimated at some 24.9 trillion USD. The process happens with such ease that, only rarely, do we stop to consider how it was that those imports made it to our homes. Perhaps it’s at a sight of surprise when looking at a “Made in China” or “Made in Mexico” sign, or the frustration when a given good experiences global shortages. But only then do we wonder how it is that the entire world has been connected so thoroughly by way of consumer goods.

Complex software and massive ships play a role in the answer, but these are mere by-products of a single invention. If, today, we have a complex system of trade it is, in great part, a result of the multimodal shipping container.

Odds are that you haven’t seen one of these containers in action but, if it weren’t for them, most of global trade—and, by extension, the goods we use in everyday life—would be impossible or, at the very least, significantly reduced. As you read these piece, an estimate of over 6,800 ships are moving containers across the globe in a market currently valued at 9.01 billion USD merely for its transportation. By 2028, that same valuation is set to reach 15.87 billion USD, bringing goods across the entire planet. 

In short, we might not think much of shipping containers, but owe much of our modern existence to them. So, to fully understand the complex world of logistics, we must start with such an essential piece as the multimodal shipping container

Projected Market Size of the Global Shipping Container Market

A bar graph showing the current and projected market size of the global shipping container market between 2020 and 2028
(Data from Statista)

“Put simply, few inventions have had the impact on society that the multimodal shipping container had on the world of trade”

What is a shipping container?

On the broadest of terms, a shipping container is a large and metallic box used to transport cargo across long distances—be it commodities or consumer goods. Its purpose is to both protect products on the move and ensure they can be easily transported in the first place.

When we think of these containers, the image that most often comes to mind is that of a multimodal shipping container. These are steel containers commonly used to transport cargo across long distances—most prominently across large swaths of sea. Basically, they are long rectangles made of steel capable of enduring harsh conditions and, at the same time, being stacked one on top of the other. 

Their design is such that they can be transported not just by a contianer ship, but also trains, and trucks. That is precisely their most important characteristic. Instead of having to move cargo manually from one vehicle to another, multimodal shipping containers can be moved with ease across various forms of transportation. And, quite crucially, they are designed to be compatible around the world, so a cargo container traveling from the port of Shanghai would have no problem in being transferred to a train in the port of Manzanillo or a truck in the port of L.A.

“Instead of having to move cargo manually from one vehicle to another, multimodal shipping containers can be moved with ease across various forms of transportation”

What are the common types of shipping containers?

A diagram showing various measurements related to a multimodal shipping container.

As it is crucial that shipping containers are compatible across the world, their sizes and materials are carefully regulated. The overall metrics for multimodal containers are spelled out by the International Organization for Standardization (ISO) in a document called ISO 668. The most common size for a container is 20-ft in length, for which the ISO specifies a height and width of 8ft.

Since 20ft containers are the most common, they are also used as a unit of measurement for cargo called a TEU, short for Twenty-foot Equivalent Unit. TEUs, as the name would suggest, represents the number of 20ft multimodal containers a vessel is able to carry. So, if a container ship has a capacity of 100 TEUs, it would be capable of transporting 100 multimodal containers.

Outside of the standard 20ft container, there are also models that differ in their length and their capabilities. As such, you might’ve come across some of the following questions while studying the world of international shipping:

A diagram showing a 20ft and a 40ft shipping container as well as various other vehicles related to the world of trade

What is the difference between a dry container and a reefer container?

The key difference between dry and reefer containers is the cargo they are intended to carry. Dry containers are designed to carry goods that do not require specific temperatures or controls. Reefer containers, on the other hand, are equipped with the necessary technology to keep cargo at certain temperatures.

What is the difference between a 20-foot container and a 40 foot container?

The only difference between a 20-foot container and a 40 foot container is their length. As their names suggest, the former is 20 ft in length while the latter is 40 ft. Importantly, they both maintain equivalent heights and widths of 8 ft each. Since the 40ft has a larger volume, it is also able to carry more cargo. 

“Shipping containers are designed to safely carry cargo across various forms of transportation with minimal effort”

When were shipping containers invented?

We can date the invention of the shipping container to the mid 20th century. Before they became the norm, trade was already a great aspect of daily life. In fact, there is evidence of trade as far back as the 6th century BC, when tribes in Georgia began to commercialize wine. In the following centuries, trade would grow with the invention of archaic vessels, followed by steam ships, early locomotives, and, eventually, air travel.

As societies developed these increased forms of communication, they also expanded their commercial exchange. Yet given the lack of standardization, the process was often chaotic. Goods would be packed in containers of all sizes meant to fit the means of transportation of the time. If the good had to be transported by two different vehicles—say, a truck and a ship—, it would have to be manually transferred from one to the other, often times changing its container. As a result, transferring goods could take hours, and arranging them in their intended vessel would be even more complicated, as workers struggled to place multiple containers in the limited area available.

“As societies developed these increased forms of communication, they also expanded their commercial exchange, but given the lack of standardization, the process was often chaotic”

Thus, there was a clear need for a homogeneous cargo solution that could save hundreds of labor hours, by making different forms of transportation compatible with one another. At times, the need was present within a single industry as well. Likely the earliest form of standardization came from the British railway system which, in hopes of making cargo trains safer and more efficient, created the Railway Clearing House (RCH) in 1842 to coordinate efforts across the sector. By 1887, the RCH had established a first set of industry standards, but transport wagons still differed slightly depending on the company that created them. Yet, these standards applied only to rail and still required many labor hours to transfer goods across different modes of transport

The first attempt at creating a true multimodal container came from across the Atlantic. As early as 1929, the Over-Seas Shipping Company, better known as Seatrain Lines, developed a system to load train wagons directly on large commercial vessels. Using a system of heavy cranes and specially beds to protect the wheels of each wagon, the company was able to transfer cargo with ease.

Early Diagram of Seatrain’s Multimodal Strategy 

An early diagram of Seatrain’s multimodal strategy in black and white
(Image from WikiMedia)

Back in Europe, more efforts were being done to further standardize cargo not just across industries, but across the many countries that made up the continent. Thus, by 1933, the ​Bureau International des Containers et du Transport Intermodal (BIC) established the first international norm for shipping containers, which was later amended in 1935. These standard shipping containers would be, in a way, an early predecessor to modern norms. 

“The earliest forms of transnational standardized shipping containers date back to Europe’s 1933 legislation on the matter through the BIC”

But it wasn’t until the 1950s that the current multimodal shipping container was finally developed. The idea came from John McLean, a former trucker, and transportation businessman, who had experienced the pains of inefficient transportation firsthand. His idea was simple: to develop a standard container that could be transferred from trucks to rail or ships. Instead of keeping the patent to his invention, he made it available to the ISO which, to this date, uses a modified version his standards. 

Malcolm McLean at railing, Port Newark, 1957

Malcom McLean, the inventor of the multimodal shipping container, pictured next to the Newark port full of shipping containers.
(Image from Maersk Line – CC BY-SA 2.0; https://commons.wikimedia.org/w/index.php?curid=27640875)

“Malcolm McLean is credited as the father of modern shipping containers, after designing a standard container that could be transferred from trucks to rail or ships”

In a matter of decades, the entire world of trade was transformed. One only needs to look at the growth of global exports before McLean’s container came into being. In the pre-container days, companies were often reluctant to use maritime shipping unless it was absolutely necessary as to avoid the needless delays of using an alternative vehicle. Now, with the ease of multimodal containers, over 80% of global trade takes place by sea, with nearly two thirds of such trade being done through quality shipping containers. That is, roughly 53.3% of all global commerce depends on shipping containers of some sort.

Growth of Global Exports: Total World Exports Adjusted for Inflation (Constant Prices), Relative to 1913

A line graph showing the growth of global exports adjusted for inflation (constant prices), relative to 1913 with lines showing the moments when Europe first established the first shipping containers and when the intermodal shipping container was invented

(Data from Our World in Data)

“Roughly 53.3% of all global commerce depends on shipping containers of some sort”

How much does a shipping container cost?

Since quality shipping containers are used in international trade, their costs vary significantly with international trends. Factors such as the price of oil, changing trade regulations, and even climate events can alter global commerce and, in turn, impact the overall prices of shipping containers.

Perhaps the most reliable estimate of the price of using containers comes from Freightos, which publishes a weekly average for the cost of transporting goods on a 20-ft container. According to their data, a shipping container currently goes for about 3,093 USD. However, these prices are largely the result of large trade disruptions by Houthi rebels in the Middle East attacking commercial vessels headed for the Suez Canal.

Before Houthi attacks, the standard price for a 20 ft container was roughly 1,346.2 US—a price range that might return if traffic along the Suez Canal is restored back to its previous levels. It is also worth noting these prices, despite their sharp increase, remain far below the peak generated by the COVID-19, in which, using a single 20 ft container could go for as much as 11,108 USD.

Global Container Freight Index (2016-2024)

A line graph from Freightos showing the value of the Freightos Glibal Container Freight Index between 2016 and 2024
(Data from Freightos)

Why use a shipping container?

Shipping containers are a pillar of the international trade system. Their very design is meant to address the historical necessity for simple and efficient transportation. A single container can be loaded in a factory, transported by bus to a port, transferred to a ship, and later moved by train to its final destination without ever being opened. Moreover, as the international system has been shaped by these containers—even using them as a unit of measurement—, they will ensure vessels can carry the most cargo without spending countless hours arranging crates. If you want to transport goods across the world, there simply isn’t a better or more efficient method than a shipping container. So, if the amount of cargo you seek to transport can fit in a 20 ft container, you might soon become a part of a key tenant of international trade.

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