Imagine sea freight without the shipping container – hundreds of thousands of products individually loaded onto a ship by hand; those very ships in ports for weeks at a time; products moved, again individually, from ship to train to truck and back; and you, waiting months for your new shoes.
This was reality until the 1950s when one man, Malcolm McLean, grew impatient with the time it took his trucks to drive between New York and North Carolina. In the days before America’s interstate system a ship could sail this journey faster than a truck could drive it, so McLean set about finding a way to speed up his company’s operations. First, he drove the whole truck onto the ship, then began leaving just the loaded container on-board ready to be picked up at the other end.
The concept worked, and began to catch on. By the mid-1960s international standards were in place which meant that a single container could be used to store thousands of products on an end-to-end journey around the world.
This simple innovation of, well, putting things in a box, had profound effects, however. Shipping containers make it quicker, easier and cheaper to transport goods across the world. Ships today are in port for hours not weeks, because moving a container takes a fraction of the time it takes to move its contents individually. Products get to destinations far more quickly because internationally standardised containers can switch between modes in minutes anywhere in the world. And containers, and the ships which carry an ever increasing number of them, drive economies of scale for shippers, helping in turn to drive prices down for us. Even at the time of their introduction, it was estimated containers reduced the cost of loading a ship from $5.86 per ton to just 16 cents.
In short, shipping containers help make global trade and global supply chains on the scale we have today possible. But what about future innovation in logistics – are we likely to see such far reaching change brought about by a single such innovation anytime soon, or ever?
All change starts off small, and each overnight success story really takes years of toil and dedication, but what chances do start-ups have of being the next seed of logistics innovation?
Robotics in logistics is a subject we here at Ti have explored a couple of times lately. There certainly are many reasons to be optimistic, though it remains to be seen whether Amazon’s plan to use drones is the best possible answer. Maybe the answer is 3D printing.
Perhaps it will be external innovation that alters the way logistics operates. Indeed ‘the emergence of “supply chain management” in the late 1980s was the result of a much more complex product’ being manufactured in the automotive industry – perhaps the advances of companies such as Tesla could see a similar wave of change. Or perhaps another external innovation – e-commerce – will be the driver of fundamental change in logistics. Indeed, it’s hard to argue this isn’t already the case, particularly for last mile delivery providers.
All of these innovations have the potential to create change in the logistics industry as well as in the global economy, but of course not all will. Change will happen and innovation will continue, it just might take us until 2050 before we can look back and call one the new shipping container.
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