The computer you’re using to read this, the food you eat, the shoes on your feet — most of these things were produced in one or more different countries and transported to you using a shipping container, says Maersk Line.
Billions of people around the world depend on containers for a steady supply of food and goods. Containers are the building blocks of global trade, connecting producers and consumers across continents.
Today’s global economy relies more than ever on international logistics chains to connect markets, people, businesses and countries. The magic of the global supply chains that connect producers on one side of the planet to consumers on the other is how invisible the whole process appears to be.
Shipping containers can deliver speed, efficiency, and security. A well-run logistics process can simplify complex global supply chains, and make substantial cost savings by reducing capital requirements, and maximising control.
This have made it possible for the logistics industry to adopt the Just-In-Time system pioneered in the car manufacturing industry. The Just In Time philosophy is that stored inventory is a waste of resources. Instead, the focus is on having “the right material, at the right time, at the right place, and in the exact amount”.
When applied to supply chains, this principle makes it possible to minimize the number of warehouses on the route from producer to customer — as long as the container carrier can be relied upon to deliver on time.
This delivers benefits to factories that assemble a finished product from a variety of parts and components. Rather than store all the parts needed to manufacture the finished product on site, factories can now use containers as a kind of floating conveyor belt to bring in the parts they need as and when they need them. This frees up floor space previously dedicated to storage, which can be used to expand production capacity.
This kind of decentralized manufacturing makes great economic sense for electronics manufacturers that source components using an international supply chain that stretches over more than five countries. Low transportation costs means they are free to source their parts from anywhere in the world — wherever they can get the best goods for the best price.
Retailers like supermarkets use a similar principle to minimise the amount of capital tied up in stored inventory. Working with sophisticated software that predicts consumer demand, they use container-based supply chains to bring in just the right amount of stock at the right time. The incredibly low transport costs achieved by containers make this system a very cost-effective way of doing business.
The overall impact on global trade is of dramatically improved efficiency, and accelerated world trade on a massively increased scale.
For consumers, containers and global supply chains have brought about a high street revolution, which has made previously unaffordable products into commodities. Modern shoppers have a much wider choice of goods, available at much better value prices.
