Development of Containerization and Dry Ports

1. Development ofContainerization and Dry Ports Presentation by : Tarun Jain DGM (G) & CPRO NWR 25.09.2014

2. What is Containerisation • It is a system of inter-modal cargo transport using standard ISO containers that can be loaded on containerships , railroad cars/trains and trucks • Container capacity of Ships, Yards , Terminals are measured in TEU = Twenty foot Equivalent Units or FEU = Forty foot Equivalent Units .

3. History & Origins • Benjamin Outram made first attempt at containerisation with a horse drawn wheeled wagons in form of containers loaded with coal for transshipment into canal barges on Derby canal. • The Liverpool and Manchester Railway in the United Kingdom started container movement . "Simple rectangular timber boxes, four to a wagon,they were used to convey coal from the Lancashire collieries to Liverpool, where they were transferred to horse-drawn carts by crane. • Iron boxes were introduced as well as wooden ones. • The early 1900s saw the adoption of closed container boxes designed for movement between road and rail.

4. History & Origins • From 1926 to 1947 in the United States, the Chicago North Shore and Milwaukee Railway carried motor carrier vehicles. • shippers' vehicles loaded on flatcars between Milwaukee, Wisconsin, and Chicago. • Beginning in 1929, Seatrain Lines carried railroad boxcars on its sea vessels to transport goods between New York and Cuba.

5. History & Origins • In the mid-1930s, the Chicago Great Western Railway and then the New Haven Railroad began "piggyback" service transporting highway freight trailers on flatcars limited to their own railroads. • By 1953, the CB&Q, the Chicago and Eastern Illinois, and the Southern Pacific railroads had joined the innovation. • By 1955, an additional 25 railroads had begun some form of piggyback trailer service.

6. History & Origins • During World War II, • The Australian Army used containers to help overcome the various breaks of gauge. • These non-stackable containers were about the size of the later 20-foot ISO container and perhaps made mainly of wood

7. History & Origins • Toward the end of World War II • The US Army used specialized containers to speed the loading and unloading of transport ships. • The army used the term "transporters" to identify the containers, for shipping household goods of officers in the field. • A transporter was a reusable container, 8.5 feet (2.6 m) long, 6.25 feet (1.91 m) wide, and 6.83 feet (2.08 m) high, made of rigid steel and with a carrying capacity of 9,000 pounds.

8. History & Origins • During the Korean War • the transporter was evaluated for handling sensitive military equipment and, proving effective, was approved for broader use. • Theft of material and damage to wooden crates convinced the army that steel containers were needed. • In 1952 the US army began using the term CONEX, short for "container express“ • The first major shipment of CONEXes, containing engineering supplies and spare parts

9. History & Origins • By the time of the Vietnam War the majority of supplies and materials were shipped by CONEX. • US Department of Defense standardized an 8-foot by 8-foot cross section container in multiples of 10-foot lengths for military use, it was rapidly adopted for shipping purposes. • The railways of the USSR had their own small containers

10. International Standardization of shipping containers. • In 1955, former trucking company owner Malcom McLean worked with engineer Keith Tantlinger to develop the modern intermodal container. • The challenge was to design a shipping container that could efficiently be loaded onto ships and would hold securely on long sea voyages. • The result was a 8 feet (2.4 m) tall by 8 ft (2.4 m) wide box in 10 ft (3.0 m)-long units constructed from 2.5 mm (0.098 in) thick corrugated steel. • The design incorporated a twistlock mechanism atop each of the four corners, allowing the container to be easily secured and lifted using cranes. • This began international standardization of shipping containers.

11. Standardization of Container • During the first 20 years of containerization many container sizes and corner fittings were used • Four important ISO (International Organization for Standardization) recommendations standardized containerization globally. • January 1968: R-668 defined the terminology, dimensions and ratings. • July 1968: R-790 defined the identification markings. • January 1970: R-1161 made recommendations about corner fittings. • October 1970: R-1897 set out the minimum internal dimensions of general purpose freight containers.

12. Container standards • There are five common standard lengths : • 20-ft (6.1 m) gross mass 24,000 Kg, • 40-ft (12.2 m) gross mass 30,480 Kg, • 45-ft (13.7 m), • 48-ft (14.6 m), and 53-ft (16.2 m). • US domestic standard containers are generally 48 ft (15 m) and 53-ft (rail and truck). • Container capacity is often expressed in twenty-foot equivalent units (TEU, or sometimes teu). • An equivalent unit is a measure of containerized cargo capacity equal to one standard 20 ft (length) × 8 ft (width) container. • As this is an approximate measure, the height of the box is not considered. For instance, the 9 ft 6 in (2.9 m)high cube and the 4-ft 3-in (1.3 m) half height 20 ft (6.1 m) containers are also called one TEU.

13. Container ship • The first vessels purpose-built to carry containers began operation in Denmark in 1951 • In the United States, ships began carrying containers in 1951. • None of these services was particularly successful. • The containers were rather small, with 52% of them having a volume of less than 3 cubic metres (110 cu ft).

14. The world's first purpose-built container ship • First purpose-built container ship was the Clifford J. Rodgers • Built in Montreal in 1955 and owned by the White Pass and Yukon Route. • Its first trip carried 600 containers between North Vancouver, British Columbia, and Skagway, Alaska, on November 26, 1955 in Skagway, the containers were unloaded to purpose-built railroad cars for transport north to the Yukon,

15. The world's first purpose-built container ship • In the first intermodal service using trucks, ships, and railroad cars southbound containers were loaded by shippers in the Yukon and moved by rail, ship, and truck to their consignees without opening. • This first intermodal system operated from November 1955 until 1982. • The first truly successful container shipping company dates to April 26, 1956, when American trucking entrepreneur McLean put 58 containers aboard a refitted tanker ship, theSS Ideal X, and sailed them from Newark to Houston.

16. Effects of Containerisation • Containerization greatly reduced the expense of international trade and increased its speed, especially of consumer goods and commodities. • Its changed the character of port cities worldwide • Prior to highly mechanized container transfers, • crews of 20–22 longshoremen would pack individual cargoes into the hold of a ship • large crews of longshoremen were no longer necessary at port facilities • the decline of some ports and the rise of others

17. Effects of Containerisation • As of 2009, approximately 90% of non-bulk cargo worldwide is moved by containers stacked on transport ships • 26% of all container transhipment is carried out in China. • In 2005, some 18 million containers made over 200 million trips per year • Most economic studies of containerization merely assumed that shipping companies would begin to replace older forms of transportation with containerization, • the process of containerization itself would have a more direct influence on the choice of producers and increase the total volume of trade • The widespread use of ISO standard containers has driven modifications in other freight-moving standards, gradually forcing removable truck bodies or swap bodies into standard sizes and shapes (though without the strength needed to be stacked), • and changing completely the worldwide use of freight pallets that fit into ISO containers or into commercial vehicles.

18. Effects of Containerisation • Improved cargo security is also an important benefit of containerization. • The cargo is not visible to the casual viewer and thus is less likely to be stolen • the doors of the containers are usually sealed so that tampering is more evident. • Some containers are fitted with electronic monitoring devices and can be remotely monitored for changes in air pressure, which happens when the doors are opened. • This reduced the thefts that had long plagued the shipping industry. • Recent developments have focused on the use of intelligent logistics optimization to further enhance security.

19. Effects of Containerisation • The use of the same basic sizes of containers across the globe has lessened the problems caused by incompatible rail gauge sizes in different countries. • The use of container trains in all these countries makes transhipment between different trains of different gauges easier. • Containers have become a popular way to ship private cars and other vehicles overseas using 20- or 40-foot containers. • Unlike roll-on/roll-off vehicle shipping, personal effects can be loaded into the container with the vehicle, allowing for easy international relocation.

20. Benefits of Containerization • Establishment of dry port with container-handling facilities encourage greater use of container. • Facilitation of multi-modal transport – from one transfer mode to another which take place safely, efficiently and speedily. • Complete suitability to door to door transport • Ease to transport of cargo on a combined transport bill of lading. • Lower to risk of damage, pilferage and loss of cargo during transit, intermediate handling or storage. • Cargo can be sent in “ready to sell” or “consumer-ready” condition.

21. Benefits of Containerization • Speedier cargo handling – one lift of crane may shift 25 tons cargo, 20 lifts per hour • Reduced amount of covered space for storage in ports and dry ports. • Increase utilization of land for storage – This implies general cargo storage capacity or around 60 metric tons per 20 –foot (6.096 meters)ground slot. • Easier inventory control and cargo tracking at terminals owing to the ease of identification of containers. • Trade facilitation – to motivate small producers of goods to export. Established the port infrastructure at their doorstep, where all the agencies involved in export clearance and promotion are located under one roof.

22. Benefits of Containerization • Improved use of transport capacity - through compactness and standard size of container, cargo can be loaded and unloaded speedily and more cargo can be carried per vehicle. • Road congestion alleviation – • one container makes better use of truck capacity. • Potential number of commercial vehicle on road can be reduced • This in turn saving on haulage and road maintenance cost. • Customs facilitation – custom may be satisfied with a simple check of the container’s exterior surface and seal in normal cases.

23. Benefits of Containerization • Improvement of inland distribution system – • This development may, in turn, contribute to the buoyancy of the national economy and to the international standing of the country.

24. India - Containerized Market Growth • Real GDP has grown at more than 7% CAGR in the last 10 years, with port growth of 11% CAGR over last 10 years. • In the last 5 years, GDP has grown by 6.8%, with port growth of 6.3%

25. How system works

26. Pictorial flowchart Shipper books shipment with WHL WHL advises port depot to release empty to Shipper Port depot releases empty to Shipper Released empty is taken to Shipper’s premises At Shipper’s premises shipment stuffed into Contr. laden box taken to vsl side for loading Stuffed laden box upon return to port is stacked in CY Stuffed laden box returned to port by Shipper At Shipper’s premises shipment stuffed into Contr. laden box is loaded to vsl Ship sails out with the shipment

27. With the advent of Containerisation

28. Types of Containers The exterior dimensions of all containers conforming to ISO standards are 20 feet long x 8 feet wide x 8 feet 6 inches high or 9 feet 6 inches high for high cube containers. VENTILATED CONTAINER 20’ Ideal for cargo requiring ventilation BULK CONTAINER 20’ For bulk cargoes

29. Types of Containers ..contd. TANK CONTAINER 20' For transportation of liquid chem chemicals and food stuffs DRY FREIGHT CONTAINER 20' and 40' General purpose cont container HIGH CUBE CONTAINER 40' and 45' 9'6" High - For over height and voluminous cargo

30. Types of Containers ..contd.. OPEN TOP CONTAINER 20' and 40' Removable tarpaulin for top loading of over height cargo FLAT RACK 20' and 40' For over width and heavy cargo PLATFORM 20' and 40' For extra length and heavy cargo

31. Types of Containers ..contd… INSULATED CONTAINER 20' and 40' For additional insulation of sensitive cargo REEFER CONTAINER 20' and 40’ & 40’HQ For Temperature controlled cargo. cooling, freezing or heating of foods or chemicals

32. 40-Foot Containers

33. OPEN TOP CONTAINERS

34. Refrigerated Container

35. Tank Containers

36. Double stacked Containers on Rail

37. Containership

38. DRY PORTS AN INLAND TERMINAL To which shipping companies issue their own import bills of lading for import cargoes Assuming full responsibility of costs and conditions and from which shipping compamies issue their own bills of lading for export cargoes

39. DRY PORT • A Common User Facility With Public Authority Status, • Equipped with fixed installations and offering services for handling and temporary storage of any kind of goods(including containers) • Carried under customs transit by any other agencies competent to clear goods for home use, warehousing, temporary admissions, re-export temporary storage for onward transit and outright export

40. Locations • Inland from sea port – • Dry port could be inland terminal within a country that has a gateway port • In hinterland – • Dry port could be located in adjacent land-locked countries in the hinterland of one or more sea ports.

41. Pre-requistes of Dry port • Holding compound with security cordon • Temporary storage for warehousing during customs inspection • Customs control and clearance facility • Common user facility accessible to all shippers • Provision for containment of goods • Container handling equipments • Offices of operators, either the site owners lessor or contractor • Offices of clearing and forwarding agents • Reliable and efficient communication facilities • Container freight station with stuffing and destuffing facilities

42. Additional facilities • Offices of shipping line agents • Railway goods office • Road haulers offices • Cargo packers services • Consignment consolidation services • Container clearing services • Computerised cargo tracking services

43. Additional facilities • Container repair facilities • Cleaning and fumigation services • Refer refrigeration points • Weigh bridges • FCL cargo clearance • LCL cargo clearance • Bonded Warehouse

44. Benefits of DRY PORTS • Increased trade flows – • Beneficial to a region or • To the country as a whole. • Lower door to door freight rates • By consolidation of consignments and greater use of containerization can contribute to lower through –rates.

45. Benefits of DRY PORTS • In avoidance of clearing and forwarding agents fees at sea port – • Fees may be completely avoid where dry ports allows • The use of combined transport bills of lading or multi-modal transport documents. • When such documents issued by a shipping line because shipping line takes responsibility for the passage of goods through maritime port. • No need to employ clearing and forwarding agent.

46. Benefits of DRY PORTS • Avoidance of storage, demurrage and late documentation fees • Storage, demurrage and late documentation fees arise due to • Goods held up at maritime ports or at land borders • Absence of documentation such as ocean bills of lading or commercial invoices, minor irregularities in documents, prepayment of handling charges, lapse of bond, non availability of onward transport etc. • With a Dry port and combined transport bills of lading • Customs inspection at maritime ports and at borders of transit countries least minimized. • Many of the unusual cause of delay at maritime port will removed. • Hence , storage cost, demurrage and late documentation fees do not occur.

47. Benefits of DRY PORTS • Possible avoidance of the need to extend the period of marine insurance • Marine insurance usually extends to 60 days after completion of discharge overside of the goods insured from the sea going vessel at final sea port of destination. • With a dry port, delay in excess of 60 days not occur, so any additional premium is thus averted. • Marine insurance could end at the dry port itself if it has been designated as the final destination. • such coverage could also cease at dry port if • long-term storage take place there • goods kept there for distribution

48. Benefits of DRY PORTS • Optimal use of road and rail transport • By substitution of existing long distance road haulage by rail transport. • This may be savings to be gained in transport costs • Which can be assessed by finding difference between rail and road through transport cost. • Use of national rolling stock • Dry ports enables cargo to be transhipped more readily from foreign owned to domestic owned rail wagons. • Foreign wagons returned quickly to the foreign railway. • The purpose of the dry port and the combined transport document is to reduce transhipment with its attendant handling cost to a minimum.

49. Benefits of DRY PORTS • In better utilisation of capacity by • Reducing empty rail wagon or truck movement • Acting as a consolidation for return loads of export cargo. • Increase in load factor may enable some savings to be made in overall transport cost • In greater use of Containers • Establishment of dry port with container-handling facilities encourage greater use of container.

50. Benefits of Dry ports • Lower customs staff costs • Benefit to sea ports • Lower congestion • Reduced handling of goods at ports • Reduction in demand for storage space due to faster onward transit • Saving in both capital costs of handling equipment and warehousing as well as maintenance costs • Higher berth throughputs thereby reducing the cost per unit of cargo handled