The shipping container: an invention that revolutionized trade and turned the world into a giant conveyor belt

Maritime transport fuels global trade. But is it already too cheap to be sustainable?

Marine Traffic Live Map is an online service that provides real-time information on movements of ships. And there are ships galore on the seas. All around the world, thousands and thousands of cargo vessels, tankers and passenger ships are hard at work.

Somewhere among them, in the middle of the Atlantic Ocean, is a cargo ship that carries a container packed with all the belongings of Professor Jari Eloranta's family: their car, furniture, kitchenware, clothes, books – and also guitars and amplifiers, as Eloranta plays in a band.

Eloranta became a professor of economic history at the University of Helsinki last autumn, and moved to Finland from North Carolina, where he worked at Appalachian State University.

Upheaval on the seas

Had Eloranta relocated a hundred years ago, the ship would have looked entirely different. There would have also been hundreds of dockworkers loading the ship with bagged cargo.

These days, modern cargo vessels can accommodate up to 10,000 standard containers that are piled aboard by automatic cranes, like Lego bricks. It only takes a dozen sailors to transport a giant load across the sea.

The container carrying the belongings of the Eloranta family will spend a few weeks at sea before arriving in Finland. When examining the overall cost of the relocation, shipping barely accounts for a third.

Since the 1960s, the use of shipping containers has revolutionised ships, cargo and marine traffic which, since the introduction of containers, has blown up in scale to an unparalleled volume.

 “It is the single greatest change in the history of marine traffic. The size of the ships combined with the efficiency of the production chain has turned the world into a giant conveyor belt,” Eloranta says.

Fish boned in Asia

In the 18th century, shipping costs could sometimes equal the value of the cargo. Currently, only a few per cent of the value of exchange of goods goes to cargo costs. Technological advances, larger ships, smaller crews and competition have caused the price of shipping to collapse.

Shipping has become so affordable that fish from Europe and the United States is often transported to Asia to be boned – and then sent back for selling. The overall costs remain lower than if the work was done in the West.

 “Marine traffic has had a momentous effect on globalisation,” Eloranta says.

The first significant increase in world trade occurred in late 18th century, and trade continued at a brisk pace until World War I. The next wave of globalization began in the 1960s. We are now surfing on its crest.

During the 19th century, world trade increased twenty-five-fold. In the 20th century, it grew 4,000-fold. Today, approximately 80 per cent of all cargo travels by sea.

 “Nowadays, international trade relies on the affordability of maritime transport. If extra fees were imposed on marine traffic, they would have to be introduced gradually. Otherwise, the worst-case scenario would be a global recession,” Eloranta says.

Miserable colonies

The first wave of globalisation was created by colonial trade, industrialisation and increasingly efficient seafaring. Previously, trade consisted of luxury items. In the 19th century, the development of refrigeration equipment gave rise to the shipping of consumables and food.

Raw materials were taken from colonies at exploitative prices to be refined in the mother country. This became the world’s first global production chain. However, these activities were not profitable even for the mother countries.

 “The colonial model was ineffective also for the rulers. They had to administer, build infrastructures and solve conflicts, all of which incurred costs. Ultimately also the world wars stemmed from the colonial system,” Eloranta says.

Before the First World War, many believed that trade relations would prevent wars. Even today, this idea is expressed regularly. According to Eloranta, this way of thinking is naïve.

 “We are currently even more linked to each other than before the First World War. But that does not guarantee anything. Trade does not prevent conflicts,” he says.

Environmental damage

In hindsight, it is easy to recognise the unfairness of the colonial system. But is the current world trade system fair either?

For Western consumers, it is affordable and enables our high standard of living. When transportation costs are minimized, the end product remains cheap. This is why we can buy T-shirts for five euros, or frozen fish boned in Thailand. However, minimizing the costs is detrimental to the environment, to safety and to sailors’ working conditions. Heavy fuel oil, which is the cheapest maritime fuel, is also the worst polluter.

The environmental advantage of shipping on a gigantic ship is that the carbon footprint of individual products remains small. On the other hand, the combined carbon dioxide emissions of marine traffic are a little over three per cent of global emissions, which is a little more than emissions of air traffic. They are also expected to grow in the future. Maritime transport and aviation are not included in the Paris Agreement.

On occasion, waste water from the ships is poured directly into the sea and ships are demolished on beaches with no regard to environmental or safety regulations. Taxes and regulations are avoided by re-registering ships in states that will turn a blind eye to any issues.

Who receives information?

Regulation of marine traffic has been difficult, since it is extremely competitive and there are many operators. The UN hosts the International Maritime Organization, IMO, but it has no more leverage than any other organisation to force anyone to follow its guidelines.

The seaworthiness of vessels is monitored by insurance companies and classification societies. Inspections are conducted in ports, but when the ships are at sea, they are beyond control. However, the situation is changing.

 “This is due to digitalisation,” says Daria Gritsenko, an assistant professor at the Aleksanteri Institute, who specializes in marine traffic .

Sensors are attached to the hulls and machinery of ships, which are then used to monitor what is going on at sea. Functioning internet connections were introduced on-board about ten years ago.

 “Now the greatest debate is about who is responsible for overseeing ships and who will receive the information gathered. Will it be accessible to classification societies, engine manufacturers or authorities?”

Data will allow shipping companies to plan their shipping operations more efficiently and safely. Approximately five years ago, Gritsenko and her colleagues noticed that the carbon dioxide emissions of ships had decreased slightly. This was caused by ships being steered more slowly to save fuel and engines.

 “It is important that cargo is delivered on time, but people are willing to compromise on the speed of transport.”

Price is too cheap

Gritsenko sums up the future of ship traffic in two questions: Who is interested in the sustainability of shipping and who should pay the costs?

 “Ships do not run for fun but because they have something to carry.”

At the moment, possible extra costs incurred by ecological solutions will be left to the ship-owners who operate with narrow margins. Should the sender and the recipient also contribute to covering the costs?

 “The solution would be to accept that transport needs to be more expensive. We cannot keep on demanding ridiculously cheap consumer goods,” says Gritsenko.

Technology may provide help on these issues. Perhaps ships will once again run on wind energy, when rotor sails are developed to be effective enough. At the moment, 42 per cent of marine cargo is energy: coal, oil and gas. If fossil fuels are replaced with renewable energy sources, the volume of transport will also decrease.

No crew required

If unmanned ships become more common in the future, questions concerning the crew conditions and dumping of waste water will no longer be valid.

 “Since a large part of accidents are caused by human error, unmanned ships could also be a safer option,” says Gritsenko.

On the other hand, a transitional period with both automatic and human-steered vessels could turn out to be very hazardous. In addition, the disappearance of the sailor’s profession would be a tragedy for those made redundant. Seafaring is an occupation with a long tradition and Gritsenko sees value in keeping sailors’ skills alive for their own sake. 

Jari Eloranta has studied the stage at which sailing ships were replaced by steamships. At the time, many lost their jobs, but not everyone. Even today, Eloranta does not believe that all sailors will be turned into landlocked control-room employees.

We do not know the future, but it is likely that some kinds of ships will keep on transporting something. According to the ancient Romans, who were skilled seafarers: sailing is necessary, living is not.

The article was originally published in Finnish in the Y/01/19 issue of Yliopisto magazine. 

Big gains, big risks

The history of the world is largely a history of seafaring: political and economic dominance has usually required a navy.

 “Trade has always been conducted through waterways because it is the most convenient way to transport large amounts of heavy material,” says Mikko Huhtamies, Academy of Finland research fellow in marine history.

Crossing the sea has required courage, knowledge and skills. For example, the Romans possessed all of these, and it is unlikely that their empire could have reached its limits without supremacy over the Mediterranean. The Vikings sailed all the way to North America and later the seas of the world have been dominated in their turn by the Spanish, the Portuguese, the Dutch and the English.

Ships have also transported other things besides goods. At its zenith, the Hanseatic League operating in the Baltic Sea comprised as many as 170 cities. None of them were located in Finland but their effect was felt in Turku and Vyborg. According to Huhtaniemi, Hanseatic merchants introduced wine, fashion, town squares, the guild system and the whole concept of the city to Finland.

After the Hanseatic League, the Baltic Sea was the domain of the Dutch followed by the Brits. All of these seafarers left behind shipwrecks as a reminder of the dangers of the sea.

 “The sea has attracted people even if the risks have been great. Then again, the gains have been great enough to justify the risk,” says Huhtamies.

He has studied shipwrecks and their cargo in the Baltic Sea. The founding of St. Petersburg changed the situation on the Baltic Sea. The city had wealth and merchant ships aimed to get there regardless of the weather. Risks were managed by dividing the cargo among various ships and co-ownership of the ships. Hull insurances were also an early development.

In addition to trade, war and looting were essential parts of seafaring. The Vikings are known as rogue merchants but later seafarers have not managed much better. Up until the 18th century, it was common to privateer ships sailing under the banner of other states and the cannons often dictated the terms of transactions.

Does anything in the marine traffic of today remind you of seafaring of old?

 “Marine traffic continues to be important and it continues to be risky. Traffic bottlenecks and dangerous areas are the same as in previous centuries. In 1994, the cruise ferry MS Estonia sank in the same region as countless other ships before it,” says Huhtamies.