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On the Waterfront: How containerisation revolutionised the world of shipping and logistics.

by Murray Phillips,
Jun 18, 2023
man operating a forklift, efficiently transferring packages in a logistics operation
man operating a forklift, efficiently transferring packages in a logistics operation

Table of Contents:

How containerisation revolutionised the world of shipping and logistics.

Containerisation has transformed the logistics industry and revolutionised the way goods are transported and delivered worldwide. From small beginnings in the 1950s, shipping containers have become the most common way for freight to be delivered across the world. 

And as container ships get bigger, and ports become more automated, logistics software is playing an increasingly important role. In his blog post, we are going to take a look at the fascinating history of containerization and its impact on Australian logistics. Additionally, we will delve into the role of logistics software in managing cargo deliveries and optimising operations within the containerisation framework.

The Birth of Containerisation

Historically, trade shipping involved numerous challenges and inefficiencies. The process was labour-intensive, time-consuming, and often hazardous. However, in the 1960s, the shipping industry found itself at a crossroads. The rising costs of labour, wharfside operations and ships themselves, along with union disputes, necessitated a revolutionary change.

Mr McLean’s vision

During the 1960s, a visionary American transport magnate named Malcolm McLean introduced a radical idea that would transform shipping. He repurposed a World War II oil tanker, the SS Ideal X, to carry 58 trailer vans from New Jersey to Texas. This system involved dropping off trailers at the wharf for immediate loading onto the ship and subsequent pickup at the destination. 

McLean then removed the wheels and chassis from the trailer vans, leaving only the metal boxes. This new containerized system proved immensely beneficial, leading to the establishment of standard container dimensions in 1964. These dimensions were:

  • Width: 7.8 feet (2.35 metres)
  • Height: 7.9 feet (2.39 metres)
  • Length: 19.4 feet (5.9 metres)

Twenty-foot Equivalent Units

Today, ships measure their carrying capacities in terms of the number of standard containers they can accommodate. This measurement is often expressed as twenty-foot equivalent units (TEUs). As well as the standard twenty-foot container there are also now forty-foot containers, refrigerated “reefer” contains (of both 20- and 40-foot lengths) and taller High Cube (HC) containers.

Enormous container cranes, reaching up to 120 meters in height, service container ships that can now carry thousands of TEUs. The largest vessels worldwide can transport over 20,000 TEUs. There are now more than 20 million containers circulating the globe. If they could be laid end to end, these containers would encircle the world 3,000 times.

Phew! Is your head spinning from all those facts and figures? Let’s come back down to Earth and follow Australia’s entry into the world of containerisation.

Aussie Gets in on the Act

Australian shipping operators were quick to recognise the benefits of containerised shipping and began adopting container technology in 1964. In fact, we were the second country after the United States to do so. 

Initially implemented for local trade, international containerisation began in Australia with the maiden voyage of the Encounter Bay, which docked at Fremantle in 1969. Containerisation revolutionised cargo handling in Australia. It replaced the labour-intensive and time-consuming methods of the past with mechanisation and sophisticated dockside equipment.

On the waterfront

Prior to the advent of containerisation, cargo was generally delivered to ports haphazardly, in all shapes and sizes. Ships’ holds were laboriously filled using what is known as the Break Bulk system. 

Waterside workers (called longshoremen in the United States and wharfies in Australia) spent exhausting days lugging bags, bales, crates, boxes, drums, barrels and pallets to the wharves and packing them aboard ships: like a three-dimensional jigsaw puzzle. At the end of their journeys, the ships were unloaded using the same labour-intensive, time-consuming system. 

Bring on The Box

The shipping container changed all that. Within three frenetic years, containerisation in Australia brought massive changes. The days of many hands physically lugging cargo gave way to automation, with waterside workforces being rapidly replaced by cranes and evermore sophisticated dockside equipment.

These days, Australia’s major terminals — Port Botany, Port of Melbourne, Port of Brisbane, Port of Freemantle, Port of Port Hedland, Port of Darwin, and Port of Newcastle —  are handling a total of more than 8 million TEUs each year. 

Personnel and software

The number of personnel needed to sail and operate container ships has also dropped markedly. Today’s biggest vessels only need a crew of 20 or so. And technology is everywhere. Technology, such as the logistics software systems provided by TransVirtual, is a game changer in terms of the way in which containers and goods can be scanned and tracked.

Containerization brought numerous advantages to the Australian logistics industry. It enables seamless intermodal transportation, as containers can now be easily transferred from ships to trucks and trains. This has facilitated faster transit times, reduced cargo handling costs, and increased cargo security.

The Role of Logistics Software in Container Logistics 

Containerisation improved inventory management and allowed for greater supply chain visibility, enhancing overall operational efficiency. And logistics software has played a crucial role in streamlining and optimising cargo deliveries within the containerisation framework. 

Efficient Order Management

Logistics software enables businesses to manage orders seamlessly. It automates order processing, consolidates shipping information, and tracks cargo movements, ensuring accurate and timely delivery. This streamlined order management process minimises errors, improves efficiency, and enhances customer satisfaction. 

Container Tracking and Visibility

Logistics software offers real-time container tracking and visibility throughout the supply chain. While a container is on the water, its progress can be tracked in real-time. And once it is unloaded at one of Australia’s port facilities, its whereabouts and arrival time can be updated and the information passed on to customers, transport operators and suppliers.

By integrating with tracking technologies such as GPS and RFID, businesses can monitor container locations, track delivery progress, and mitigate potential disruptions. This level of visibility ensures greater control and enables proactive decision-making.

Route Optimisation and Planning

The roads around ports can be congested and the route to your business can be susceptible to all kinds of holdups. Logistics software optimises transportation routes by considering various factors such as traffic conditions, delivery time windows, and container capacities. 

By selecting the most efficient routes, businesses can reduce transit times, minimize fuel costs, and improve overall operational efficiency. This feature is particularly valuable in the containerisation context, where the optimisation of routes plays a vital role in streamlining cargo deliveries.

Documentation and Compliance

TransVirtual’s software simplifies documentation and compliance processes. It automates the generation of shipping documents, customs forms, and other essential paperwork, reducing administrative burdens and ensuring compliance with regulatory requirements. This feature enables businesses to navigate complex logistics procedures smoothly.

From Clunky Crates to Steel Titans

In little more than a generation, these humble metal boxes have been able to overcome commercial, cultural and political boundaries and reshaped the way goods are moved around the globe.

With its unmatched efficiency and global impact, containerisation now rules the waves of trade. Standardized containers have paved the way for seamless operations, reduced costs, and increased trade volumes.

While conventional shipping methods required big numbers, big volumes and big commitments from buyers and sellers, containers allowed small operators and innovators to compete in the global marketplace. Even the smallest business can now send their goods anywhere in the world by purchasing space in a steel box, thanks to the vision of Mr McLean back in the 1950s on the waterfront.

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