Answers:
Advantages and disadvantages of containerization:
ADVANTAGES OF CONTAINERISATION:
A) For ship-operators
i) Reduction in port time of ships. ii) Improved working ratio of ships.
B) For ship-users (i.e. shippers/consignees)
i) Reduction in packaging cost (as example, goods can be placed in containers packed in cartons instead of in cases);
ii) Reduction of damage, pilferage and theft;
iii) Reduction in marine insurance premium;
iv) Greater protection of fragile and easily contaminable cargoes;
v) Reduction in inland transport costs;
vi) Faster and reliable delivery;
vii) Retention of original quality of goods; viii) Physical separation of 'dirty' cargoes; ix) Simplification of documentary procedures;
x) Less inventory costs as a result of less transit time; and
xi) Stable inventory control made possible by stabilised ships operaton schedule.
The most outstanding contribution of containerisation is the suitability and capability of containers for door-to-door transportation internationally. This is called 'Intermodal or Multimodal' transportation system, eg. from Delhi to Zurich in Switzerland.
Disadvantages of containerization:
- Site constrains. Large consumption of terminal space (mostly for storage); move to urban periphery. Draft issues with larger containerships. A large post-panamax containerships requires a draft of at least 13 meters.
- Capital intensiveness. Container handling infrastructures and equipment (giant cranes, warehousing facilities, inland road, rail access), are important capital investments.
- Stacking. Complexity of arrangement of containers, both on the ground and on modes (containerships and double-stack trains). Restacking difficult to avoid and incur additional costs and time for terminal operators.
- Repositioning. Many containers are moved empty (20% of all flows). Either full or empty, a container takes the same amount of space. Divergence between production and consumption at the global level requires the repositioning of containerized assets over long distances (transoceanic).
- Theft and losses. High value goods and a load unit that can forcefully opened or carried (on truck). Vulnerability between terminal and final destination. About 10,000 containers are lost at sea each year (fall overboard).
- Illicit trade. Instrument used in the illicit trade of goods, drugs and weapons, as well as for illegal immigration. Concerns about the usage of containers for terrorism.