Port Containerization

Opportunity and Challenges

With the increase in technology proliferation, the world can expect to develop even further as far as globalization and related concepts are concerned. Across the global transport industry, in network fleet activities and commercial approaches, containerization has several opportunities to improve the overall performance. For example, traditional systems are being replaced by more modern concepts, including tracking and better logistics systems (Rodrigue & Notteboom, 2015). Outmoded approaches will be replaced by more updated design approaches, ushering in a new age in global containerization and better management of ports. According to Saxon & Stone (2017), globalization provides more opportunities to the business of containerization, expands the need for port terminals around the globe, and increases the need for transportation using shipping containers. Another opportunity that emerges through port containerization is the standardization of the transport system in the recent past in a way that enables the movement of goods from one nation to the next (Seoane, Laxe, & Montes, 2013). For example standardized modes of containerization makes transportation of goods more effective even where there are language barriers. Additionally, D’agostini, Nam, & Kang (2019) point to the flexibility that comes with containerization, noting that as more businesses become interconnected, it would be possible to move different types of commodities including manufactured goods, refrigerated goods and liquids. The concepts of globalization and the interconnectedness that the world is experience will also yield the opportunity for containers to offer low-cost and fast transportation solutions ((Rodrigue & Notteboom, 2015). It will enable the growth of businesses in the international scene and set the tone for the next few years in the management of containers and their advantages in transportation. Another opportunity that comes with port containerization is the development of security in other fronts such as in IT and other technologies, providing future transportation benefits with better cargo security. A combination of these issues will provide carriers and ports with an opportunity to charge premium prices

Even with the foregoing opportunities, port containerization has a number of challenges that has hampered progress and better performance for the sector. Kotowska, Mańkowska, & Pluciński (2018) point to one major challenge regarding site constraints for port containerization. The large consumption of port and other terminal space is a major challenge, meaning that more funds and capital are required for the sector to be fully operational. In agreement, Wang, Woo, and Mileski (2014) report that port containerization is limited by the capital intensiveness that is required to ensure effective and efficient handling of container infrastructure and equipment. These investments also mean that development and expansion in the port containerization sector is limited by funds and space as mentioned earlier. Of larger consequence is the challenge of keeping up with global changes in technology and strategic approaches. López-Bermúdez, Freire-Seoane, & Lesta-Casal (2020) assert that fleet changes and the development of the global transport industry have rendered network designs used in containerization processes outmoded. As a result, the networks used by a majority of shipping companies fail to adequately maximize financial benefits. For example, the use of new bigger and more cost-effective container ships has led to massive losses and other cascading impacts on companies that use smaller ships. There is a likelihood that the growth in technology will lead to the squeezing out of vessels operating in the port containerization process. Additionally, there is an emerging challenge regarding the conflict between transportation companies and asset management techniques in influencing business decisions (Hlali & Hammami, 2019). Asset management practices are evolving in a way that transportation companies has not been able to keep up. The result is that policies and company decisions have become more suboptimal as time progress. The transportation mindset needs to be in constant evolution in line with the objectives of asset management so as to reduce conflict in the short and long term. Other notable challenges include theft and losses, the effect of the illicit containerization industry, the divergence between consumption and production, and the cross-border issues that emerge with the international trade between different jurisdictions.

ReferencesD’agostini, E., Nam, H. S., & Kang, S. H. (2019). Gaining competitive advantage at sea: an overview of shipping lines’ strategic decisions. Int J Transport Eng Technol, 5(4), 74-81.

Hlali, A., & Hammami, S. (2019). The evolution of containerization and its impact on the Maghreb ports. Annals of Marine Science, 3(1), 001-005.

Kotowska, I., Mańkowska, M., & Pluciński, M. (2018). Inland shipping to serve the hinterland: the challenge for seaport authorities. Sustainability, 10(10), 3468.

López-Bermúdez, B., Freire-Seoane, M. J., & Lesta-Casal, E. (2020). Core and comprehensive ports: The new challenge for the development of the Spanish port system. Transportation Research Interdisciplinary Perspectives, 8, 100243.

Rodrigue, J. P., & Notteboom, T. (2015). Looking inside the box: evidence from the containerization of commodities and the cold chain. Maritime Policy & Management, 42(3), 207-227.

Saxon, S., & Stone, M. (2017). Container shipping: The next 50 years. Travel, Transport & Logistics. https://www.hktdc.com/resources/New_Corporate_Site/almc2018/1543288787953_Steve-Saxon.pdf

Seoane, M. J. F., Laxe, F. G., & Montes, C. P. (2013). Foreland determination for containership and general cargo ports in Europe (2007–2011). Journal of Transport Geography, 30, 56-67.

Wang, G. W., Woo, S. H., & Mileski, J. (2014). The relative efficiency and financial risk assessment of shipping companies. Maritime Policy & Management, 41(7), 651-666.