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Containerized shipping began with N.C. man 50 years ago
By BONNIE PFISTER
23 April 2006

NEWARK, N.J. (AP) - Fifty years ago on April 26, a trucker from Maxton, N.C., ran an experiment here that forever altered international trade and the global economy.

While many scoffed, Malcolm McLean hired a crane to hoist 58 trailer-sized steel cargo boxes onto a Texas-bound freighter. It was an alternative to the then-ubiquitous "break-bulk" shipping, the costly, pilferage-prone method dramatized in the film "On The Waterfront."

It was a revolutionary idea in shipping and a huge business risk for McLean.

He sold off the trucking firm it had taken him 20 years to build, in compliance with the era's antitrust regulations. And he retrofitted an old oil tanker, the Ideal X, with a reinforced flat deck specially designed with grooves to secure the containers in place for the maiden voyage down the Eastern seaboard and into the Gulf of Mexico.

By the time the tanker docked at the Port of Houston six days later, McLean's Sea-Land Services was taking orders to ship containers back north. Transoceanic shipping eventually followed, ushering in what observers call the biggest change in freight transport since steam engines replaced sails.

"There are few instances in history where innovation has had such a dramatic impact," Anthony Coscia, chairman of the Port Authority of New York and New Jersey, said Friday. "Malcolm McLean gave birth to a way of moving goods around the world that promoted global economic development that has been very positive for New Jersey and the U.S. economy."

Break-bulk, which is still used for true "bulk" commodities such as construction materials, involved armies of stevedores loading individual crates from a dock to a sling, which was then hoisted up and then down into a ship's hold, to be unloaded and positioned there.

Now shipping everything from clothing to razor blades to electronics in secured metal containers is the norm. Breakage and theft have been dramatically curtailed, and average shipping costs have fallen from 15 percent of retail value to less than 1 percent. At the Port Authority's New Jersey locations -- ports Newark and Elizabeth -- containerization accounts for 94 percent of the cargo, with break bulk about 1 percent; automobiles account for the remainder.

Over the years, that development set the foundation for big-box stores crammed with inexpensive items, allowing shopping to morph from necessity to entertainment. The advent of refrigerated containers meant no matter the season, grocers could offer fresh produce grown half a world away for reasonable prices.

"Products that couldn't move because of the export packaging and damage and so forth move freely now throughout the world," said Paul F. Richardson, a shipping consultant who worked side by side with McLean for Sea-Land's first 20 years. "It was a huge breakthrough."

McLean died in May 2001 at 87, two years after selling Sea-Land, then the world's seventh-largest shipper, to Denmark's Maersk for $800 million.

"I'm not sure if he graduated from high school, but he was brilliant," Richardson said. "He could do compound math in his head. He wasn't afraid of risk. In fact, I think he thrived on it."

But the container revolution, like many efficiency-creating innovations, also spelled the end to countless well-paying jobs, both in shipping and in manufacturing.

"It used to be if you took a ship with five cargo holds, it would take two shifts a day of up to 20 longshoremen for a week to unload it," said Arthur Donovan, a former history professor at the U.S. Merchant Marine Academy in Long Island, and co-author of "The Box That Changed The World." Today, a comparable job would take about 10 hours with three or four container cranes, employing fewer than 20 workers, he said.

"It makes the whole world like a slick surface: you can slide anywhere at almost no cost," Donovan said. "If you have pool of cheap labor that's ready to work, you simply outsource. The purpose wasn't to disemploy people, but it's the consequence of falling transportation costs."

The result is a generation of American consumers weaned on superstores. Wal-Mart is the leading user of shipping containers, followed closely by Target, Ikea and Home Depot, Donovan said.

"It's transformed retailing," he added. "The big box experience is a product of containerization."

Events commemorating the anniversary are scheduled at Port Elizabeth, N.J. on Tuesday and the Smithsonian Institution in Washington D.C. Thursday.


On the Net:
Port Authority of New York and New Jersey: http://www.panynj.gov/
History of Containerization Foundation: http://www.hocfoundation.net
 

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Dilemma: How much greener are ships than planes?
Are your Christmas presents coming by sea from China?
New superships are making all the wrong waves

28 October 2007
The Observer

In the late Eighties I went on a rather dull school trip to Dublin Port and Docks (I went to school in Dublin, near the docks, so this was a more prosaic outing than it might sound). The one shining moment, however, was seeing a container ship that had arrived from Japan. It dwarfed the surrounding buildings and seemed to block out the sky.

At just 4,000 TEU (the container ship measurement, meaning 20ft-equivalent units, or a container), that ship would now appear ridiculously puny. The new generation of megaships can carry 11,000 TEU. When the Emma Maersk docked in Felixstowe this time last year it was promptly dubbed SS Santa . At 397m long (the size of four rugby pitches) and 56.4m wide, she carried 45,000 tonnes of Christmas goodies, trainers, MP3 players, T-shirts and plastic toys.

Pound for pound, shipping is greener than aviation in terms of emissions, but that doesn't make it eco-friendly. Shipping emissions account for 5 per cent of total global emissions, producing between 600-800 tonnes of CO2 a year. And 70 per cent of ocean-going ship emissions occur just off the coast, impacting mostly in the form of acid rain and leading to severe coastal erosion. According to some commentators, the trade has been treading water when it comes to greening its act, while other modes of freight (including aviation) have made big savings.

Bigger vessels don't help. Even if new megaships have a heat-recovery system, it's a bit like fitting a Hummer with a solar-powered clock. Significantly, the size and weight of new ships, along with increased traffic (there are now 200m container movements across the world each year), have a huge impact on port and waterway expansion - so Panama's canal expansion is just tough luck for the biodiversity of the surrounding Paradise Hill area.

Perhaps this would all be more palatable if containers were carrying important cargos - say, solar panels, or warm socks for orphans. But when the Napoli ran aground off the coast of Devon last year, it disgorged the usual array of trinkets, tyres and toys, along with 200 tonnes of waste oil.

The rise of the super-container, and of sea freight's footprint, has everything to do with burgeoning consumerism. You could argue that an even greater load of rubbish is sent back on the return journey, as we export the bulk of our recycling to China. But this isn't really the point. Only 75 per cent of containers contain anything on their return journey (including rubbish).

The irony is that as global warming escalates more shipping routes are opened up. Melted ice in the Canadian arctic might feasibly allow ships to sail from Europe to east Asia avoiding the Suez or Panama Canals (there's another irony, given the latter's expansion plans), saving fuel and therefore emissions. Shipping could become greener for all the wrong reasons.
 

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BBC to follow transport container
15 September 2008
International Freighting Weekly

The BBC will be following a container transporting a range of goods as it travels around the world to help highlight the importance of the container shipping industry.

The container began its voyage in Southampton on 8 September on its way to Scotland where it will be loaded with whisky.

Then it's off to China where it will be loaded with goods ranging from car parts to footwear.

It is hoped the container will make it back to the UK by summer next year.

The journey is being organised by the Container Shipping Information Service (CSIS), which represents the largest 24 shipping lines.

The container's progress can be tracked on www.bbc.co.uk/thebox or CSIS's own website, www.shipsandboxes.com
 

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Spate of containership sales confirms depth of price drop
30 June 2009
Lloyd's List

THE number of modern containerships sold has risen in the past month, providing crucial price guidance to the struggling sector.

The resale of the 1,700 teu newbuilding Cynthia, under construction at bankrupt Wadan shipyard in Germany showed that prices have fallen dramatically in the last year. Receivers have reportedly negotiated a price of €15m ($21m) for the gearless containership with buyers Briese Schiffahrt.

A spokeswoman for Briese told Lloyd’s List yesterday they were still negotiating and could not confirm the sale details.

If it goes ahead, the price is about 20% lower than the value a similar-sized but much older containership fetched back in 2007. London-based broker Clarksons priced the average value of a 1,700 teu, 10-year-old containership at $26.5m in 2007, and $24m last September.

The broker is one of many that has now stopped providing valuations for vessels since the banking and financial crisis saw prices plummet.

But while bulk carrier and tanker sales have continued to set benchmarks, very few modern container vessels have been sold.

Allied Shipbroking reported earlier this month that 26 containerships had been sold in 2009, compared to 126 tankers and nearly 370 bulk carriers.

London-based consultancy Maritime Strategies International said that secondhand boxship prices have already collapsed by 60% since last year, and have further to go.

“We envisage potential falls of up to 20% for benchmark 10-year-olds on the back of a declining newbuilding price environment. There is limited downside to the charter market,” MSI told Lloyd’s List yesterday.

Despite the poor outlook there have been more sales reported in the sector in the last two weeks.

Brokers this week reported unconfirmed news that K Line had sold two gearless containerships of 3,720 teu, including the 1993-built Akashi Bridge and Bauhinia Bridge as part of a $15men bloc deal.

Clarksons valued a 10-year-old containership of this size at $46.5m last September.

Sanko Steamship has reportedly sold two 1,700 teu vessels, Ocean Emerald and Ocean Mermaid, but neither the price nor the new owners have been disclosed.

That comes on top of the distressed sale of bankrupt owner Eastwind’s containerships to Draften Shipping, a subsidiary of the Ofer Brothers.

The Eurus Oslo and Eurus Ottawa, both built in 1989 with capacity for 2,097 teu, were sold, as well as the smaller Eurus Lisbon (1991-built, 950 teu), Eurus Paris (1983-built, 580 teu) and Eurus Singapore (1989-built, 1,555 teu).

This article is compiled on the basis of publicly available sources. Reported transactions may not have been confirmed with the buyers or sellers named. Accordingly, Lloyd’s List cannot guarantee the accuracy of the information.

SLS tanker resales join S&P market as owners cancel SOUTH Korean shipyard SLS Shipbuilding is now looking for buyers for as many as four medium range tankers, after their owners this month cancelled their contracts just before delivery, writes Michelle Wiese Bockmann.

The resales have emerged on the market at a time when brokers are forecasting a drop of at least 15% on current values for secondhand, clean tankers.

“We foresee prices weakening further leading to a re-evaluation of sellers’ price expectations,” said Gibson in its weekly sale and purchase report. “We estimate the market needs a correction of at least 15% in prices before asset players perceive this market to be a risk worth taking.”

SLS placed the resales on the market after both Stolt Nielsen subsidiary Stolt Tankers and Glencore joint-venture Glenda Shipping cancelled orders this month. Both cited excessive delays at the yard.

Stolt cancelled two 44,000 dwt coated parcel tankers, while Glenda had cancelled the order for one 51,000 dwt product tanker with a second due for delivery this month also likely to be cancelled.

These latter two ships were ordered at a price of $47.5m each.

Galbraith’s said it expected tanker resales to become an emerging trend over the following months, due to cancelled orders. This seemed to be underscored by rumours of another promptly available tanker, a very large crude carrier, circulated for sale by a South Korean yard at $100m.

“So far, there are few takers at this level,” said Gibson.

The price compares with the Baltic Exchange sale and purchase assessment price of $83.5m for a five-year-old VLCC, down more than $10m on values seen four months ago.

Brokers believe cash-rich owners are waiting for further drops in asset prices, perhaps with one eye on the pressure that the emerging resale tanker market could place on already distressed sellers.

Gibson also reported unconfirmed rumours that Iranian buyers may have bought some VLCCs built in the mid-1990s for $54m-55m but the deal had yet to be fully concluded.

The 1995-built 298,306 dwt Songa Chelsea was one that was reportedly on subjects, Gibson said.

The VLCC is owned by V Ships Group.

“There has been a strong undercurrent of interest in the large crude sector of late but there are few ‘market’ sellers in the present climate,” said the Gibson report.

Clarksons also reported buyers from South America, Indonesia and the Middle East had shown interest for double-hulled VLCCs built in the mid 1990s.

Clarksons also said the sale of the 1993-built, 97,097 dwt Chemtrans Lyra, committed to Indonesian interests at $16.5m, had failed as the owners wanted more than $18m.

Vela International is also selling another two single-hulled VLCCs, including the 1994-built 291,435 dwt Al Bali Star. The Saudi Arabian subsidiary of government-owned oil major Aramco has already sold at least four single-hulled VLCCs over the last year.
 

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Nov 30, 2017
China's COSCO overtakes Maersk as top container shipper in third quarter: Alphaliner
Excerpt

COPENHAGEN (Reuters) - China’s COSCO Shipping took the top spot in the number of container liftings in the third quarter, overtaking Denmark’s Maersk Line for the first time, data from shipping consultancy Alphaliner showed.

China’s government is pushing to raise the country’s profile in global shipping and last year merged two state-owned firms to form COSCO Shipping, aiming to challenge the dominance of top players Maersk Line and Switzerland’s MSC.

COSCO lifted 5.49 million TEU (20-foot container units) in the third quarter, up 23 percent from the same period last year, surpassing Maersk’s 5.26 million TEU, according to the Alphaliner data, which was published this week.
 

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Container shortage delays shipments of Brazil's record coffee crop
Excerpt
Oct 14, 2020

(Reuters) - Coffee traders are struggling to ship cargos out of Brazilian ports because of a shortage of available containers or space in vessels to hold them, according to traders and analysts.

Brazil's economy is suffering due to the coronavirus pandemic, causing a 40% slide in its currency, the real. That spurred a flood of exports of now-cheaper goods, but imports have dropped sharply, causing the imbalance in containers that has led to delays.

That's a direct hit to Brazil, which with 30% of global coffee trade is the world's largest exporter of the commodity.

According to shipping industry consultancy Datamar, there was an imbalance of nearly 80,000 boxes in Brazil in August, with around 251,000 containers leaving the country and only 172,000 arriving. By contrast, in January, 216,000 boxes arrived and 201,000 left.

Global shipping companies such as MSC and Maersk are fully booked for weeks to months in Brazil. Merchants say it is not feasible to currently export Brazilian coffee for prompt shipment, and what is possible can only be done at a higher cost.

More : Container shortage delays shipments of Brazil's record coffee crop
 

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An ‘aggressive’ fight over containers is causing shipping costs to rocket by 300%
Excerpt
Jan 24, 2021

A critical shortage of containers is driving up shipping costs and delays for goods purchased from China.

The pandemic and uneven global economic recovery has led to this problem cropping up in Asia, although other parts of the world have also been hit. Industry watchers said desperate companies wait weeks for containers and pay premium rates to get them, causing shipping costs to skyrocket.

This affects everyone who needs to ship goods from China, but particularly e-commerce companies and consumers, who may bear the brunt of higher costs.

More : An 'aggressive' fight over containers is causing shipping costs to rocket by 300%
 

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The Global Food Trade Has Been Upended By a Container Crisis
Feb 2, 2021
Bloomberg Excerpt

Food is piling up in all the wrong places, thanks to carriers hauling empty shipping containers.

Global competition for the ribbed steel containers means that Thailand can’t ship its rice, Canada is stuck with peas and India can’t offload its mountain of sugar. Shipping empty boxes back to China has become so profitable that even some American soybean shippers are having to fight for containers to supply hungry Asian buyers.

“People aren’t getting their goods where they need them,” said Steve Kranig, director of logistics at IM-EX Global Inc., a freight forwarder that handles cargoes including rice, bananas and dumplings from Asia to the U.S. “One of my customers ships 8 to 10 containers of rice every week from Thailand to Los Angeles. But he can only ship 2 to 3 containers a week right now.”

The core issue is that China, which has recovered faster from Covid-19, has revved up its export economy and is paying huge premiums for containers, making it far more profitable to send them back empty than to refill them.

There are signs that the soaring freight rates are boosting the cost of some foods. White sugar prices surged to a three-year high last month, and delays in food-grade soybean shipments from the U.S. could mean higher tofu and soy milk costs for consumers in Asia, said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance.

More : Bloomberg - Are you a robot?
 

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Maersk sees first-quarter boost from strong container demand
Excerpt
Feb 10, 2021

COPENHAGEN (Reuters) - Shipping group Maersk said on Wednesday that a surge in demand for container shipping will boost earnings in the first quarter and that it expects higher profits this year.

Increased demand for goods like furniture, exercise equipment and home improvement goods from shoppers sheltering at home during the pandemic has triggered a spike in shipping rates, boosting Maersk’s earnings.

Maersk’s ocean shipping business, its largest division, “performed at record level in the quarter as a consequence of the strong rebound of demand,” CEO Soren Skou said in a statement.

More : Maersk sees first-quarter boost from strong container demand
 

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Container shipping locked in a ‘significant bottleneck’ as demand surges back
CNBC Excerpt
Feb 10, 2021

Container shipping firms are locked in a “significant bottleneck” as resurgent global demand stretches capacity and drives up freight rates, Maersk CEO Soren Skou told CNBC Wednesday.

Maersk, the world’s largest container shipping firm, missed its own fourth-quarter profit expectations Wednesday and posted a cautiously optimistic outlook for 2021 after an “exceptional while challenging quarter.”

Skou explained that after a 15% dip in Maersk’s volumes in the second quarter of 2020, the sharp rebound toward the end of the year, particularly in the U.S. and Europe, saw global trade return to a 5% year-on-year increase.

More : Container shipping locked in a 'significant bottleneck' as demand surges back
 

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Hapag-Lloyd CEO says container delays could be resolved in Q2/Q3
Excerpt

FRANKFURT, Feb 19 (Reuters) - Container shipping firm Hapag-Lloyd said surging demand for bulky goods like exercise equipment from locked-down consumers may flatten out in the second or early third quarter, helping to ease disrupted shipping logistics.

"Things will normalise somewhere hopefully in the course of the second quarter or towards the beginning of the third quarter," Chief Executive Rolf Habben Jansen said in an embargoed briefing session with journalists held on Thursday.

Around the world, port waiting times have lengthened due to labour shortages and traffic snarl-ups during the coronavirus pandemic, leading to delays in returning empty containers.

Container shipping firms re-routed cargoes and reduced stops as availability of boxes and staff tightened, which drove up freight rates and boosted profits in the sector, resulting in a sharp first-quarter earnings hike at Hapag-Lloyd.

The company has just guided for 2021 profits to "clearly surpass" the previous year, when earnings before interest, tax, depreciation and amortisation (EBITDA) are seen at 2.7 billion euros ($3.3 billion), more than a third above 2019 levels.

More : Hapag-Lloyd CEO says container delays could be resolved in Q2/Q3
 
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