Case1/EMBA/Term 3/Fall 2013

1. What is containerization and how did the innovative use of containers transform the
distribution of goods?
Ans- The traditional way of transporting goods and commodities from one part of the world to
another was highly labor intensive. Goods were in individual crates of different sizes, shapes and
firms. People used to manually lift and stow in the holds of ships. The development of concept of
containerization emerged as the time passed by. Basically, ontainerization is done by using
intermodal containers which are also called shipping containers and !"# containers. !t is made of
weathering steel. The containers have standardized dimensions, available in $% ft and &% ft in
length. These can be loaded, unloaded and transported over long distances. They can be stac'ed
and transferred from one mode of transport to another li'e on a lorry, by rail, by sea or air. The
containerization is considered as the 'ey innovation in the field of logistics which has
revolutionized freight handling. ontainerization is also the consolidation of many goods into a
large container that are easier to be transferred between two transportation modes.
ontainerization is the standardized containers for storage and transportation for goods within a
manufacturing facilities where the advantages of containerization includes minimize product
damage, reduced waste as the container are reusable and the increase the inventory accuracy as
counting processes become easier by using containerization.()errell* Pride, $%%+,
The use of containerization has transformed the distribution of goods in the different ways-
-.se of containers help in moving goods in lots which are too small for the traditional
bul'.
- Provides safety from human and natural factors.
-"ubstantial amount of time and labor cost is saved which would otherwise have incurred
in loading and unloading goods.
-Prevents poor handling of goods that results from bul' transport systems.
-ontainers can act as mode of storage anywhere along the transport route.
-ontainer ships provide regular service to overseas ports, thus it minimizes the waiting
time.
-/educes the transit time.
Roll No: 13504, Bipin Chhetri
Case1/EMBA/Term 3/Fall 2013
2. What role has containerization played in the development of a global economic
system?
Ans- The intermodal shipping container is a simple technology. The use of the same has had a
profound social and economic impact. !t is a large steel bo0 built in a small number of standard
sizes. These standard sizes allow the transportation of goods by ship, truc', train and even in
airplane. That impact was initially felt by shipping industry and also to local development and
the global economy.

!t is not due to the invention of the container itself that led to the revolutionary changes in world
shipping and freight transportation. /apid increase in cross border movement of goods, services,
technology and capital created the economic globalization. !t is the increasing economic
interdependence of national economies. /apid growing of information in all types of productive
activities and mar'etization as well as the advancement of science and technologies also created
the economic globalization. !t comprises the globalization of production, mar'ets, competition,
technology and industries. )oreign direct investment, reduction of trade barriers and cross
broader immigration made possible of integrating developed economies with less developed
economies.
- Greatly reduced the e0pense of international trade by ma'ing shipping cheap and
made it possible to have a world economy.
- Avoids road congestion and increases its speed especially of consumer goods and
commodities.
- /educed and lowered labor costs. Prior to containerization, number of crews of
longshoremen would pac' individual cargoes into the hold of a ship. After
containerization, large crews of longshoremen were no longer necessary at port
facilities.
- 1as an economy of "cale due to the combination of technological advances and lower
labor costs.
- 2ith intermodal containers, the 3ob of sorting and pac'ing containers could be
performed far from the point of embar'ing. heap transportation has revolutionized
the supply chain for businesses. )irms no longer need to locate near to ports to locate
different parts of the supply chain close together but can split it up and locate each
production stage where costs are lower.
Roll No: 13504, Bipin Chhetri