Advantages and disadvantages of containerization.

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.