Editorial
The Geography of Containerization: Half a Century of
Revolution, Adaptation and Diffusion
Jean-Paul Rodrigue a Theo Notteboom b
a
Department of Global Studies & Geography, Hofstra University, Hempstead, New York 11549,
USA. E-mail: Jean-paul.Rodrigue@Hofstra.edu
b
Institute of Transport & Maritime Management,University of Antwerp, Keizerstraat 64, B-2000
Antwerp, Belgium. E-mail: theo.notteboom@.ua.ac.be
For GeoJournal
Final Version, September 2008
1. The Container: More than a Box
“If the currently available container quantities are compared with the potential capacities of the
terminals, it is clear that the existing equipment can not be used at full economic capacity. The overinvestment is at present so large that even in the years to come the container volume cannot offer
prospects for achieving a balance” (Coppieters, 1968, p. 53)
“Containerization has transformed global trade in manufactured goods as dramatically as jet planes
have changed the way we travel and the Internet has changed the way we communicate”, Joseph
Bonney, editor of the Journal of Commerce
“Low transport costs help make it economically sensible for a factory in China to produce Barbie
dolls with Japanese hair, Taiwanese plastics and American colorants, and ship them off to eager girls
all over the world” (Levinson, 2006)
In spite of serious reservations about its potential when it was introduced in the 1960s, as
exemplified in the first quote, no other technical improvement has more contributed to the
process of globalization than the container. Containerization, through its modes, terminals and
flows expresses the physical reality of economic and transport geographies (Hall et al., 2006;
Hesse and Rodrigue, 2006). Yet, the functionality and structure that containerization has
brought to the economic and transport landscape has not been fully recognized. While transport
geography has mainly been concerned by the networks, modes and terminals associated with
container shipping, economic geography has mainly viewed the container as a tool and a
facilitator of international trade (Coe et al., 2008). Still, it is becoming increasingly evident that
there is an emerging geography of containerization with its impacts on production, distribution
and even consumption.
The Geography of Containerization
The container is thus much more than a box; it is a vector of production and distribution.
Its introduction has led to various changes in the economic and transport geography and
particularly how production and physical distribution interact. The container can be considered
revolutionary as completely new practices have taken place after its introduction in the transport
system. For instance, its impacts on supply chain management can be considered as
revolutionary since completely new means of distribution were established and since the
container facilitated a shift from push logistics to pull logistics. There has also been an evolution
within containerization as many changes were gradual and incremental within maritime and
inland freight transport systems. The ongoing application of economies of scale in container
shipping can be considered as evolutionary as gradually lower transportation costs resulted,
facilitating its diffusion within the economic landscape. While initially containerization
dominantly involved finished goods and parts, the current phase in the evolution of
containerization concerns commodities. A closer reconciliation with geographical theory leans at
looking at containerization as a form of functional and spatial diffusion and what are its growth
prospects. It has become a ubiquitous transport product servicing mobility requirements at
almost all stages of supply and commodity chains and being able to be carried virtually
everywhere there are transport infrastructures.
2. The Container Revolution: Attempts at Intermodal Integration
The history of intermodal transportation and containerization is fairly well documented
and points towards higher levels of intermodal integration (see e.g. Mahoney, 1985, McKenzie
et al, 1989 and Van Ham and Van Duin, 2001). There is somewhat of a contention about what
truly marks the beginning of intermodal transportation; in many ways intermodal transportation
has always existed as a form of transshipment. It is clear that in the late 19th and early 20th
centuries that attempts were made to improve transshipments between modes, particularly
between road and rail. The pallet can be considered as the first successful intermodal unit. For
instance, by the early 1930s, about three days were required to unload a rail boxcar containing
13,000 cases of unpalletized canned goods. With pallets and forklifts, a similar task could be
done in about four hours (Leblanc, 2002). World War II demonstrated the time and labor
saving benefits of using pallets which was an important stepping stone since a manageable load
unit became available for the emerging trucking industry. The initial idea about integrating rail
and trucking took the form of simply loading trucks on rail cars. This trailer-on-flatcar (TOFC)
approach, which began in the 1950s, provided a good source of income for rail companies since
they were able to attract a new market segment (De Boer, 1992). Still, TOFC proved to have
significant limitations in terms of capacity and turned out to be an intermediate phase of
intermodalism that is likely to endure in niche markets along major corridors.
It is the advent of the container that had the largest impact on intermodal transportation.
Even if 1956, with the launching of the first containership (Ideal X), can be considered as the
beginning of the container era, this event is of limited importance in the greater scheme of
things. In the early years, containerization was seen as the simple application of temporary
portable storage facilities, loaded with cargo, made mobile as a unit for intermodal unified
transport (Rath, 1973). Capacity was very limited and the ships used were simply converted
tankers (many World War II surpluses) purchased at rock bottom prices; such a radical shift in
transportation was considered a very risky endeavor, even among its strongest proponents. Like
2
The Geography of Containerization
many technological innovations, the container faced a long period of introduction and
experimentation which lasted about a decade. Although significant productivity improvements
were realized along the transport segments it was initially applied to (e.g. services to Hawaii and
Puerto Rico), major maritime shippers were unwilling to commit substantial financial resources
to convert to containerization; each was waiting things out, particularly which standard would
eventually prevail. Investing in an intermodal standard which could turn obsolete was seen as a
very risky proposition. The two major container shippers of that time, Sea Land and Matson,
each had their own standards and intermodal equipment. In the mid 1960s, the adoption of
standard container sizes, particularly the now ubiquitous 20 and 40 footers, and of standard
latching systems marked a significant revolution and its associated surge in containerized traffic.
Those willing to develop containerized services felt more confident as the risk was no longer
related to a standard, but simply to market potential development; the container revolution was
set.
3. The Container Adaptation Process: from Maritime to Inland, from Goods to
Commodities
In 1966, the first transatlantic container service was inaugurated, opening up long distance
containerized trade. Soon after in 1968, the first cellular containerships were introduced and
containerization started to evolve both within maritime and inland freight transport systems.
Rail companies started to offer Container-on-Flatcar (COFC) services but their extent was
limited due to high intermodal costs. For instance, 1967 saw the first containers transport on rail
by Santa Fe (now part of BNSF), and also early attempts at land bridge services, but rail was
slow to adopt the container. Inland freight distribution faced several hurdles as its modes,
particularly rail, were heavily regulated and in many cases because of public ownership, as in
Europe. The situation was much different for maritime transportation which was not hindered
by regulations and many players jumped in as container services began to be offered across the
Atlantic and the Pacific. Maritime freight distribution was thus much quicker to adapt to
containerization since it concerns a mostly private industry that saw clear performance and
competitive advantages at doing so.
Still, it is by addressing the inland transportation problem that most standardization issues
were resolved. While the maritime segment could maintain, albeit inefficiently, different
intermodal standards since they were owning their own fleet, cranes and chassis, the complexity
of ownership of inland transportation, both for rail and trucking, could not support different
intermodal equipment standards without serious disruptions. Thus, in spite of a slow phase of
adoption, inland transport systems, particularly rail, were the main factor that forced the
evolution of containerization as a fully standard transport product.
Efficient containerized inland freight transportation was to follow as the commercial
environment became more favorable. By 1980, a deregulation process was set in motion in the
United States with the Staggers Act aimed at the rail industry. It improved profitability and
favored the merger of existing rail companies into a system that would eventually become six
large rail operators. Companies were no longer prohibited from owning across different modes
and they developed a strong impetus towards intermodal cooperation. Shipping lines in
particular, began to offer integrated rail and road services to their customers. The concentration
3
The Geography of Containerization
of liner services on only a limited number of container ports was counterbalanced by extensive
port equalization systems in inland transport. The advantages of each mode could be exploited
in a seamless system. Customers could purchase the service to ship their products from door to
door, without having to concern themselves with modal barriers. With one bill of lading, clients
can obtain one through rate, despite the transfer of goods from one mode to another.
Additionally, doublestacking, Inter Box Connectors (which removed the requirement for
bulkheads on doublestack rail cars) and the setting of landbridges in the mid 1980s proved to be
a boost to long distance inland containerized distribution. This placed pressures to introduce
efficient and high volume intermodal rail cranes (1985), which played a significant role in
improving intermodal rail operations.
The evolution of containerization also saw an evolution in what was being carried. For
manufacturing parts and finished retail goods, containerization can be considered as essentially
complete. Still, the container evolves into new supply chains. While commodities have always
showed a level of containerization, particularly with the usage of refrigerated containers in the
food sector (reefers), the last decade has seen the emergence of a solid and growing market.
Containerized commodity flows have particularly benefited from the distribution environment
brought in part by containerization in the global economy. Trade imbalances have been
transposed in empty container flows, creating opportunities to fill empty backhaul movements.
This is particularly the case for international container flows in North America. It remains to be
assessed how dominant containerization will be by commodity group. For some, it will remain a
niche market, while for others complete containerization of the supply chain will become the
norm.
4. The Container Diffusion: Paradigm Shifts and Towards Maturity
It can be argued that three major paradigm shifts have taken place within containerized
freight distribution systems with each shift representing a specific functional and geographic
diffusion. The first is the introduction of the container and its diffusion within maritime systems,
particularly from the mid 1960s when standardization resulted in common size and lashing
systems. The efficiency of port transshipments improved and inland services, dominantly relying
on trucking, began to be established. The second is the diffusion of containerization within inland
transport systems. For instance, the introduction of doublestacking rail services required the setting
and redesign of inland container rail terminals in North America. The adoption of the container
in Europe gained momentum when an intermodal system started to emerge in the late 1970s.
For example, the shift from conventional and highly irregular barge services to scheduled and
reliable container services in the second half of the 1970s gave impetus to a fast containerization
process along the Rhine basin up to the main ports of Rotterdam and Antwerp (Notteboom
and Konings, 2004). We are now in the early stages of the third paradigm shift which concerns
intermodal and transmodal operations and the functional diffusion of containerization within supply chains. This
efficiency is mainly based in the reduction of the number of times a container is handled.
In theory, there should be only one movement for an intermodal transfer, but the reality is
otherwise. For instance, at a rail terminal a container is unloaded trackside on a chassis. The
chassis is then brought to a storage area where the container can be unloaded and stacked. Once
ready to be picked up, the container will be put on a chassis and brought to a pick up area.
Thus, what appears to be functionally one intermodal movement actually involves several. This
4
The Geography of Containerization
could involve even more movements if containers need to be repositioned within the storage
area as other containers are brought in or removed. The same issue applies to maritime
container terminals as several intermediate stages are required to move a container from a ship
to the terminal’s gate. The reduction of the distances involved in intermodal and transmodal
operations is also an issue of concern. It includes movements within the terminal, but also the
array of movements between terminals when transmodal operations are performed. Chicago is
notorious for such a problem as all the major North American class one rail carriers are
converging within the metropolitan area (Rodrigue, 2008). A great deal of the transmodal
movements actually involve intermodal operations and cross town movements from one
terminal to the other.
5. About the Special Issue: a Multi-Faceted Look at Half a Century of
Containerization
After more than 50 years of containerization, the true impacts of the container remain to
be more comprehensively assessed as they turned out to be more far-reaching than initially
expected (Levinson, 2006). New economic systems and new forms of distribution that
characterize the global economy could only be made possible through the massive diffusion of
the container within transport practices and in the geographical landscape. Functionally and
geographically linking the global economic geography requires a priori a level of integration of
the physical systems of distribution supported by intermodal transportation. Still, there are
several hurdles left to overcome in order to insure the setting of a truly efficient global
containerized distribution system. They mainly concern a closer integration of maritime and
inland freight distribution. On the maritime side, it is acknowledged that ships and terminals are
variations on the same old principle invented half a century ago. Technological advances have
increased scale and performance of both vessels and deepsea terminals, but future gains are
likely to become ever more marginal, thereby increasingly shifting the burden to the land side.
This raises the question whether a quantum leap in the performance of maritime transportation
and vessel handling is feasible. Without such a quantum leap, the maritime dimension in
containerization might soon reach a maturity phase.
A first contribution in this special issue addresses several questions related to the future of
containerization. What are the future growth prospects of containerization? How far are we
from a phase of maturity where containerization has completed its diffusion, both
geographically and in terms of its adoption as a mode of freight transportation? Once maturity
is reached, growth (or decline) is mainly the outcome of changes in the level of economic
activity. These are the main issues discussed by Notteboom and Rodrigue as they assess potential
future developments of containerization over maritime and inland freight transport systems.
Containerization, like any technological revolution, favors the emergence and setting of
new players. In their paper, Slack and Fremont provide a salient look at the organizational
structure of maritime container shipping companies. The strong entrepreneurial character of the
industry is underlined with many shipping lines being family controlled. This is a reflection of its
geographical footlessness and of rapid market changes, which requires a flexible management
approach.
5
The Geography of Containerization
Few other economies have been more transformed by containerization than China. The
world’s leading container ports, such Hong Kong, Shanghai, and even Singapore, are essentially
Chinese. China’s whole export oriented strategy of economic development implicitly relies on
containerization as an access vector to global markets. This process is however changing as
Rimmer and Comtois underline the ongoing containerization of the Chinese freight distribution
system, which is gradually developing inland connections after a development phase focused on
the coast and its ports.
The emergence of China on the global container market, in particular the associated trade
imbalances, has also led to numerous distribution challenges on supply chains. The empty
container problem is among the most prominent and enduring issue brought by
containerization since it requires repositioning, an activity considered to be unproductive and
tying terminal and modal capacity. Theofanis and Boile introduce the extent of the problem and
the scales at which it takes place. Although several management strategies are possible to
alleviate the issue, namely a better inventory integration between maritime shippers and inland
actors, the empty container problem remains difficult to effectively address.
At the local level containerization has significantly changed labor relations. Port activities,
once labor intensive, have been thoroughly mechanized, leading to a transformation of the role
and function of port labor. Hall underlines a growing disconnection between container ports
and their regions as local communities see the acute externalities brought by large container port
terminals, such as congestion, but do not perceive the economic benefits as it was the case in
the past when ports provided higher employment levels. The findings provide further insights
into the strained relationship between seaports and port cities in the era of containerization and
economic globalization.
References
Coe, N.M., P. Dicken and M. Hess (2008) “Global production networks: realizing the potential”, Journal
of Economic Geography, Vol. 8, pp. 271–295.
Coppieters, (1968), Konventionelle Shiffsliegeplätze und Container Terminals. Beschreibung und
Leistungsvergleich. Hinterland, no. 56, pp. 39-52.
De Boer, D.J. (1992) Piggyback and Containers: A History of Rail Intermodal on America's Steel
Highway, San Marino, CA: Golden West Books.
Hall, P.V., M. Hesse and J-P Rodrigue (2006) “Guest Editorial: Re-Exploring the Interface between
Economic and Transport Geography”, Environment & Planning A, Vol. 38, No. 8, pp. 1401-1408.
Hesse, M. and J-P Rodrigue (2006) “Global Production Networks and the Role of Logistics and
Transportation”. Growth and Change, Vol. 37, pp. 499–509.
Leblanc, R. (2002): “Pallet Evolved Along with Forklift”, Pallet Enterprise,
http://www.palletenterprise.com/articledatabase/view.asp?articleID=821
Levinson, M. (2006): “The Box: How the Shipping Container Made the World Smaller and the World
Economy Bigger”, Princeton, Princeton University Press.
Mahoney, J.H. (1985): “Intermodal Freight Transportation”, Connecticut, ENO Foundation for
Transportation
McKenzie, D.R., North, M.C., Smith, D.S. (1989): “Intermodal transportation – the whole story”,
Omaha, Simmons-Boardman Books
Notteboom, T., Konings, R. (2004): “Network dynamics in container transport by barge”, Belgeo, 5: 461477
6
The Geography of Containerization
Rath, E. (1973): “Container systems”, New York, John Wiley & Sons
Rodrigue, J-P (2008): “The Thruport Concept and Transmodal Rail Freight Distribution in North
America”, Journal of Transport Geography, Vol. 16, pp. 233-246.
Van Ham, J.C.., Van Duin, J.H.R (2001): “The second container Revolution”, in Puig, J.O., RodriguezMartos, R., Dauer, R., Gonzalez Blanco (eds), Maritime Transport, Barcelona, Technical University
of Catalonia, 17 – 27
7