Where is container transport heading?

In 1980, over 2.6 billion tons of loads were transported by sea, including a significant share handled through container transport. Over the years, this value has grown almost four times, reaching 10.7 billion tons in 2017. Despite this growth, concerns about an upcoming crisis in sea and container transport are being raised.

The cargo market is largely dependent on the global economy. Analysts predict that within the next few years another economic crisis may arise. It can significantly limit the transport of goods, also by sea. At the same time the number of loads carried in containers has increased. This kind of transport is growing year by year and sets trends in sea transport. The reduction of road transport in favour of sea transport in Asian countries is being currently noticed. Can we expect such a solution on other continents?

Development or crisis?

International sea transport has developed significantly over the last 50 years. The increase in population contributed to this – since 1980 there are twice as many of us and this trend still continues. Growth of the Internet eliminated many barriers and sped up the exchange of information, thus, boosted demand for the goods of all kinds. This, in turn, expanded trade and the phenomenon of globalization. We can safely assume that we currently live in the cargo society.

Nevertheless, the upcoming crisis in sea transport is being talked about, which is related to the recession in the world trade. In 2008 a decline in GDP was recorded in many countries, mainly those developed and developing ones. Furthermore, a substantial decrease was observed in China (from 11-12% to 7% of GDP), which is the largest exporter and the second biggest importer in the world. Although this crisis took place 11 years ago, another one is already being predicted. As in 2008 it was the United States, now China is being called ‘a credit bomb’. The debt of this country, its citizens and companies is growing. The crisis may affect shipowners all around the world. Restrictions on the export of goods to the United States, caused by the imposition of high duties on Chinese products imported to the US and, in consequence, tensions between the two biggest economies of the world, will certainly have some influence on container transport. A big share of sea transport in the global trade means that it is the economy that determines whether this transport will develop or not.

In the beginning there was a boom

Containers appeared in sea transport in the 1930s, when Malcolm McLean, an American carrier, noticed how much time is wasted when reloading goods from ships to trucks. This is when he came up with the idea of standardizing containers so that they could be transported on both trucks and ships. Shipowners carrying loads in a different way were skeptical about McLean’s idea, so he decided to build his own container ship – ‘Ideal-X’. It was the first ship of this type to accommodate only 58 containers, and its first trip gave rise to some new solutions in the 90-year-old industry becoming increasingly popular.

Since 1980 sea transport using containers has increased eighteen times. Initially, they constituted nearly 3% of all the carried goods, today it’s 20%. We owe the development of containers to the growing trend of consolidation, which allows for decreasing transport costs significantly. Other advantages include capacity and design features that enable stacking and secure loads in some way. Payers can save time and money thanks to the fact that the goods carried in a container do not require reloading. Another benefit is the appearance of even bigger container ships that can accommodate a large number of loads. Currently, container ships have a capacity of up to 20 000 TEUs, which demonstrates the scale of their development. Such great amount of simultaneously carried loads gives a significant advantage to sea transport over air transport.

United States dominates in container transport

The available data from 2016 shows that the United States carried as much as 36.5 million TEUs. This number is not surprising since the US is the largest importer and the second biggest exporter in the world.

For comparison, South Korea transported 26.01 million TEUs. This country is on the 5^th place of the biggest exporters in the world. Their main trade partner is the United States (17.8% of export and 13.9 of import), also Japan, Germany, Singapore and France.

Countries such as China do not provide data on their container transport.

The fact that container transport dominates in Asia does not surprise anyone. The same applies to Africa, which imports such goods as fabrics, telecommunications equipment and wheat. In Latin America loads are also carried with the use of containers. In turn, in Europe import by general cargo ships dominates, which is related directly to the type of loads imported to the European countries. This is due to the fact that machines and transport equipment constitute as much as 30% of goods imported to Europe.

Germany – record holders

If we ask a randomly encountered passer-by, which country possesses the most containers, the answer would probably be the ‘Middle Kingdom’. But it is Germany that has a 20.2% market share and the largest number of container ships. Next in line, Denmark, has a share of 10.7%, and the third place is taken by China (10.4%). A 9.1% share is held by Greece, which not only has hundreds of islands, but is also located on the trade route between Europe and Africa and Asia.

Germany has also the largest number of ships – as many as 1131, China is on the second place – with a much less impressive result (485).

The above data clearly shows that the owners of the greatest number of containers are the European countries – 57.44%, followed by Asia – 38.37%. Surprisingly, the United States, carrying the most with containers, has relatively few of them.

Global top 10 owners of container-carrying world fleet in 2017

In 2017 Maersk, a Dutch company, had the greatest percentage of transported containers, it was as much as 15.3%. The company owns 700 ships. The other giants in liner shipping are Mediterranean Shipping Company (Switzerland), with a market share of 12.3%, CMA CGM (France) 10.1% and China Ocean Shipping (Group) Company with 7.8%.

How sea transport will develop depends on the effects of the global economy and its opportunities for development. Despite uncertain perspectives, some positive trends related to containers in sea transport have appeared. These include development of consolidation, larger and larger container ships (which means that demand for container transport increases) and growth of e-commerce and digitization. In result, even an average person can influence the number of carried loads.