Containers: The Lifeblood of Modern Trade?

This morning, I'd like to welcome back a regular guest columnist to Spend Matters. Brian Sommer is a Senior Fellow at Azul Partners, founder of Tech Ventive, and is author of the blog Services Safari..

Last year, the book, The Box: How Shipping Container Made the World Smaller and the World Economy Bigger came out (Marc Levinson, Princeton University Press). It's an interesting read and many newspapers and magazines highlighted its release. The book traces the voyage of the Ideal-X and its cargo of 58 containers. It also follows Malcom McLean and his trucking and Sea-Land firms in the expansion of containers over the last few decades. There can be no doubt that containers have re-shaped rail, ocean and truck freight while also radically redefining our expectations of today’s modern global supply chains.

But then late last year, I was surprised to see a brief piece in World Trade that indicated container evolution might take a step backward. The EU may implement a ban on 45-foot containers inside the 25-member countries as a means of easing road congestion and improving road safety. By the way, there are between 170,000 and 200,000 of these containers worldwide.

In the United States, 45-ft. containers aren't a road issue at all. We've got shippers trying to expand the penetration of multi-trailer trucks into additional states. 45-ft. seems small compared to the overall lengths of these setups.

Should the EU change occur and stay in effect, it will raise costs for EU consumers and for companies doing business there. The use of smaller containers will mean more containers are required to ship the same quantity of goods and more containers will require more crane time, more cartage charges, more port delays, etc. Interestingly, I predict it will mean more trucks on crowded EU roads. I can’t believe that putting more trucks on roads makes these roads safer.

One should never handicap bureaucrats and the EU has plenty of them. What way their committees and study groups land on this issue should be interesting.

Brian Sommer authors the blog: Services Safari

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