In 2019 there were 911 million TEUs of containers handled in ports worldwide, and this number is poised to grow for reasons we will go into later. If professionals get them wrong, there will be shortages and backups until ports and shipping companies can get back on track after the COVID-19 pandemic.
Yet technology and progress are the other main forces driving trade. They always have been, and technology and container shipping have always been intertwined. By understanding the future of container shipping, you will understand the direction of the global economy.
Here are some of the biggest threats and potential changes coming to the container shipping industry:
Technology, computers, and related accessories have improved and transformed practically every other industry on the planet to some extent. This is also the case with container shipping and has been for some time. Just because every container is not digital and port work still seems more mechanical than digital does not mean computers are not in play every step of the way. Yet, how exactly is the digital world changing container shipping now? What can we expect in the future from these developments?
E-Commerce as a Driving Force
The massive growth of e-commerce has also driven up container shipping, as many products sold online are made overseas. While retail stores do the same thing, eCommerce also allows for a greater variety of products. This increases the need for more precise container shipping and a wider variety of goods. While large batches are possible, some companies are a bit more limited. They instead choose to order in smaller runs and have them shipped overseas. As more companies do this, it will be more common and affordable for companies to do.
Greater throughput for container shipping can help with these options. It allows for more container ships to be on the move at any point and allowing for faster transport of goods. Barring a shortage of vessels, the more goods on the move due to eCommerce, the better things are for eCommerce businesses.
What might also be interesting is international shipping and its relationship to eCommerce. As customers might buy directly from overseas, will shipping containers and the like be used to transport goods more? Will shipping companies take the reins? Will expensive but reliable international postage hold strong? It’s a complicated topic, but one to watch.
The margin for error in logistics is getting smaller and smaller. Many companies now prefer not to have a large surplus of goods sitting in a warehouse, cutting into costs. This means that it is vital for companies to know when shipments are coming in and if there will be any expected delays. For some items, even a week or two off-schedule can mean a shortage for customers. These customers will then either get frustrated or shop somewhere else.
The exact developments can and will occur in many ways. Yet, improved GPS and tracking mechanisms will be a priority for shipping companies across the world.
Digital Ships and Containers
We are not talking about virtual ships and containers here yet. Instead, we are talking about ships and containers that have been modernized with the latest technology. Doing so will facilitate better tracking and allow captains and engineers to notice potential structural problems before becoming an emergency, and providing better environmental control.
Having a ship automatically react to changing ocean and weather conditions without input by someone can improve safety and efficiency for a ship. It can also save a lot of work for the crew so they can work on other vital tasks. Someone will still need to be in charge, of course, but oversight via computer is easier and less time-consuming than going around the ship. The computers will still need to be maintained, but the tradeoff will be worth it for many companies.
Changes to Customs and Management
Improvements to tracking and containers can help with customs clearance. More containers coming into international ports means it takes more work to process everything.
The exact changes and developments that could happen will undoubtedly vary based on the port and the country, but they will occur as global standards move forward. The good news is that there are things that will make processes quicker, including the electronic payment of fees, taxes, and duties, which will speed things along. Electronic help can also make the release of shipments quicker. Whether the confidence exists in technology to verify paperwork etc., remains to be seen, though it could be an option (or an aid) moving forward.
Alternatively, we might see changes on the government side of things as shipping becomes an even more vital part of the economy. It is dependent on several other factors, most of which are unforeseeable, but the trend might go towards more open borders if shipping is to grow.
Automation is a tricky subject to pin down, especially when it comes to container shipping. While there are ways we can define automation in other industries, shipping for a long time to come will be driven by human input and practice paired with incredibly powerful machines and tools. Due to the size, strength, and expense of those machines, ports and shipping companies may wish to keep a human being in the driver’s seat for a few decades to come.
However, that is not to say that automation will not make things much easier for port workers and ship crews. Instead of fully automated solutions, we will likely see hybrid solutions that reduce user error and provide additional feedback and information to the operator. While incidents are uncommon, with the right help, they can become a thing of the past, or at least those which result in injury or death.
When more automation does come around in full, it may come in several forms. For example, there could be automated cranes (or automation-assisted cranes) loading or unlocking shipping containers. Improved automated tracking of containers can help the client see their goods sooner. Automated inspection of containers for defects can prevent accidents. Better sensors and cameras combined with artificial intelligence can help process shipments. They can also provide more data on the condition of goods.
The loading and unloading of containers might also receive some help from automation in the future. Automated or remote forklifts might be a thing of the future, as will drones that might be able to handle smaller tasks or get an aerial view. Cameras can do quite a bit from the ground or attached to equipment, but there will need to be a balance. Workers will likely need to readjust to the new norm, but it will be a more efficient and overall safer container shipping process for everyone involved.
Changes to Demand?
If we were to look at the amount of goods transported each year, measured in twenty-foot equivalent units (TEUs), we would see a steady increase, with some years still being better than others. This is a natural response to increased globalization and consumption (more on that later), and we can still see the trend shown below continuing.
Note that due to the COVID-19 pandemic, production and demand may have temporarily shrunk. While this has a real effect on container shipping and the economy as a whole, it does not yet showcase a change to container shipping itself. The pandemic will end or stabilize, and people will likely return to business as usual.
As much as anything else over the last century, globalization has shaped our world, culture, and most of our industry. Borders are loosening as far as trade is concerned. Of course, things such as trade wars and protectionist policies can come around from time to time, meaning some countries have a reduced market presence, but the overall trend is towards more trade.
In truth, books could be written (and should be) about the impact of globalization on shipping. In short, the main areas of impact are the addition of new markets, longer voyages to a wider variety of areas, and increased demand for foreign goods across the world over. Whether this is at the expense of domestic production matters little in comparison to this trend.
Container shipping remains the only reasonable option for the transport of many goods, and until an alternative is found, container shipping will remain a growing part of our future.
While there are ups and downs in countries, the overall arc of the world economically is optimistic. More countries are modernizing, and more people can afford more advanced goods and luxury items, so society is adjusting to support this.
We do not wish to delve too much into the complex mechanisms of international markets in this article (though it’s a fascinating subject). We can say that there is a trend towards globalization, as we mentioned, and that there will be no shortage of needs and wants. The population is still expanding, and in the countries where this is happening, the local supply can’t keep up with some goods. The transport of food products alone will be enough to keep shipping companies going for some time.
Industry in expanding markets will require the transport of industrial materials and goods, with foreign investors happy to try and find additional profits in these markets. The exact rate of growth and the precise locations will be hard to pin down. Nonetheless, there is no reason to believe it will not happen.
More Production Options
More “stuff” is being produced than at any other point in human history. Specific products might not keep up and will fall by the wayside, but this has always been the case and always will be the case. Instead, the new takes hold, and everyone in the modern world wants the latest product or gadget. Consumerism drives much, for good or for ill. As mentioned before, more people will have the funds for more consumer goods in the near future.
Furthermore, more shipping containers are always being produced. In part to replace the shipping containers that get retired or resold to the used shipping container market (they have more uses than you might think) and partially to help ensure that there are enough containers to go around. We may not see more advanced containers right away, but even a slight design change could mean improvements to the container shipping industry as a whole.
Of course, it will also matter where the production is occurring. Some countries and companies are moving away from China as tensions rise and other countries can provide better opportunities or better products. While, in many ways, this will not affect container shipping, it may impact many of the routes and the length of routes taken. Even a few hundred-miles difference is vast when comparing routes. In addition, fuel costs and crew needs will need to be reevaluated.
Additional Usage of Some Shipping Lanes?
With increased international trade, the map of routes may look different in terms of traffic. If more companies invest in Africa, Thailand, India, Vietnam, etc., for manufacturing and expand into those markets, we will see ports in those areas get more attention. In turn, this will affect how often some routes are used, which could affect logistics in several regions. We will likely even see the expansion of those ports to accommodate increased traffic.
The increased traffic will not affect much out on the open ocean, but it can impact the chokepoints that many ships rely on to get to their destinations. Think back, for example, to the Suez Canal and the recent incident there, which held back shipping traffic. That one event had a significant impact on world trade. Even if one widens canals, such events may be more impactful depending on how routes are used.
Changes to Ships and Transport Methods
While there are changes to the world, ports, and more driving the industry, container ships are also evolving. While in concept, they might not have changed for some time, constant improvements and additions are being made so that ships and companies can remain competitive in a market that relies on razor-thin margins and perfect timing. While this has not always been the case, demands and efforts to keep consumer goods low have meant these improvements are happening for better or worse.
Here are some of the most significant trends and potential changes:
As engineering evolves and better building materials become more widely available, we are likely to see more super container ships and larger container ships in general, allowing for the more efficient transport of containers. Engineers are always looking to push the limits (safely, of course) with shipping in general. Even the most minor design improvements can yield results.
For example, some of the largest ships built now have the capacity for over 20,000 containers. Try for a moment to imagine the size of a vessel required to carry that many containers. Then, think of the engineering necessary to make sure that such a ship does not sink. Such a thing would not have been thinkable a hundred or even fifty years ago.
Liquified Natural Gas
One of the big developments in container shipping is the potential use of liquified natural gas as a fuel source. It is a fossil fuel and has some of the same detrimental effects on the environment as currently used fuels. However, it gives off 25 percent fewer emissions than most others. This can make a huge difference. It means that more trips can be made with the same impact, buying the planet more time while humanity figures out what it wants to do about a growing climate crisis.
In truth, we are unlikely to see a complete refitting of container ships to use liquified natural gas in the future. However, manufacturers may build future ships to use the fuel, and it might be a good alternative if diesel or other fuels prices rise to unacceptable levels. The cost of refitting on a massive scale is just too great, and there are disadvantages to be mindful of. Some specialist ships may utilize liquified natural gas, but most will be experimental in nature.
Regardless of how much this fuel type is used, it is a step towards a trend of alternative fuel sources and more environmentally conscious shipping. Notably, however, there is already a super container ship that runs on it: the CMA CGM Jacques Saadé.
Greener Ships and Processes
The industry is increasingly environmentally conscious, and ships are being designed to be more fuel-efficient. Lower carbon fuels, as described above, are an option. However, ship designers are also looking into hull shapes, more efficient propellers, better logistics, and ship options. They are even looking into things such as ship coatings and cushions to reduce friction. Research is being conducted to this effect on multiple fronts.
Some of these solutions may seem minor or insignificant when considering the size of these ships and the volume of fuel they use. Yet note that even a one or two percent reduction in fuel usage makes a huge difference to the environment, given the amount of shipping that occurs worldwide. A 10 percent reduction in emissions can make up for years. Fewer trips and less consumption might still be the best way to help the environment, but this is unlikely to happen anytime soon.
Solar and Wind Power?
On top of the above developments, ship designers are looking at other ways to use renewable energy sources to propel the ship or to help reduce energy usage overall. Given their size, they are effectively small villages or towns at sea, and they have the power needs of one. In addition to reducing the need through improved technologies, ships can also seek to create more power on ships through renewable means.
Significantly, these goals do not only help the environment but also save costs. If such installations are done correctly and efficiently, solar panels and wind turbines on a ship can also be an excellent investment. They cut down on fuel costs (and related expenses) over time and potentially make longer journeys possible and more efficient (fuel is heavy to carry around, after all).
The true challenge lies in finding solar panels and wind turbines that fit on a ship and are worth the initial investment. Modifying a ship to such an extent is no easy task, and the weather and other conditions must be taken into account. The changes to ships are likely to occur over time.
Improved Communication and Ship Management
As more processes become digital, we are likely to see more management of the ship done digitally. More can be controlled by a computer than many people realize. Specialized systems allow a ship’s crew to know what is going on at any time and respond all the faster for it. The sooner a problem is acknowledged, the less of a disturbance it will be to shipping operations.
Furthermore, better communication and instant information also allow ports to operate in a much more efficient manner. Ships can get in and out more efficiently, and ports can ready workers and equipment to load and unload ships to the minute. You can even speed up even things such as refueling and maintenance to some degree.
Note that this does not mean we will see ships with skeleton crews or remote captains anytime soon. The weather can still interfere with communications, and heaven forbid transmission equipment were to become broken or damaged on the high seas. The ship, and all of its cargo, could be lost as a result. Yet, some jobs that you could do remotely from port might be in the future, and such a placement might be better for all parties involved.
Better Services to Clients
Clients are concerned about their cargo and when it will arrive. However, ships move as fast as they can and are generally already doing their best. Competition between ships and shipping companies does lead to some innovation, and this is especially the case in customer service.
Some services to be offered or expanded might include:
- Real-time tracking of shipments and ship location (within reason, GPS coordinates might not be perfect, and there are security concerns).
- Faster processing and paperwork handling to save more time for clients.
- Digital warehousing allowing for more control over the goods. This is more likely with full-service shipping companies.
- There may also be additional services in the future depending on the future needs of the client. If a shipping company does not innovate, you can be sure that they will adapt to keep up with the competition (with likely mixed results).
All the above looks optimistic and generally positive for the shipping industry but are also concerns. Here are some of the significant points of worry:
- While there is little reason to expect reduced market demand for goods in general, there could be an economic downturn in the future that affects container shipping, either reducing growth or causing a downturn in the industry. Yet, even if this were the case, it would certainly not cripple or ruin the industry.
- While the expansion of the container shipping industry may occur, the growth of ports and the opening of new ports to meet the needs of larger and more ships might take longer. Efficiency can only improve so much before more infrastructure is required. Unfortunately, ports and facilities take a lot longer to build to high standards than the economy does to shift to favor a new location.
- Furthermore, as experienced with the Suez Canal incident, there may also be bottlenecks to contend with in the future as well.
- While economics and industry often stay somewhat predictable and on track, politics is anything but predictable. A single incident could change trade agreements, leading to reduced shipping to and from certain countries. An unstable world can lead to reduced global trade. This would, in turn, impact the shipping industry.
- Digitization is a positive trend in most regards. It does leave open the possibility of a cyberattack that could cause massive damage. In 2017, Maersk suffered such an attack that cost them $300 million.
Even after looking at all the above, these topics are only the tip of the iceberg. There is so much that could happen globally to affect the industry. However, we can be confident it will continue and remain strong in an economy where people want a broad range of goods from around the world.
We hope you have learned something interesting in this article and that we have piqued your curiosity to find out more. Whether you are most excited about green technologies, larger ships, or increased logistical capabilities, shipping will drive the world forward.
This article is shared by courtesy of ConexBoxes – offering steel shipping container solutions – storage containers. Meet Conex Boxes and find the original article here.