Analysis on Status and Development Direction of Freight Container in

Analysis on Status and Development Direction of Freight Container in
Modern Logistics Industry
YANG Liu1, ZHENG Xiang2
1. School of Economics and Management, Beijing Jiaotong University, P.R. China, 100044
2. School of Humanities and Social Sciences, Beijing Jiaotong University, P.R. China, 100044
[email protected]
Abstract: Container transportation is one of the most important innovations of movable transportation
resource nowadays, is the symbol of modern logistics industry, and is the internal demand of
multi-model transportation development. The functions of container in modern distribution include
promoting infrastructure and shipping tools, enhancing the formation of such intermediaries as cargo
agencies, and improving multi-model transportation efficiency, so as to take advantage of network
economy, and save market transaction cost. The empirical study of EU nations and America shows that,
in according to ISO basic standards, container type varies, laws and criteria tend to be unified,
multi-model transportation tools becomes diversified, and transportation service provided gets seamless.
The function and development of container logistics are of important highlights for China.
Keywords: container, status, development, logistics
1 Background of Freight Container Logistics
The International Standard ISO-830-1981 “Terminology of Freight Container” drafted by Technical
Committee 104 of ISO defines the freight container as “a transporting equipment characteristic of (1)
durability and enough strength suitable for recycled use; (2) convenience of transportation in one or
several means through special design without the need to exchange package in the midway; (3)
convenience of transportation from one way to another with fast loading/unloading and conveyance
device; (4) convenience for full loading and unloading; (5) a volume of 1m3 and above. The term of
freight container does not include vehicles and general packages”. [1]
As the freight container can reduce transportation cost, protect the goods, and promote transaction
efficiency, it has now become an indispensable resource in modern transportation and logistics industry.
Therefore, the Article tries to specify the status and role of freight container logistics from the theoretic
level, discuss its development trend in the future, expecting to obtain beneficial conclusions and
suggestions for China logistics industry.
2 Status of Freight Container in Modern Logistics
Freight container is a very important resource, which largely improves efficiency of removable traffic
resources, effectively promotes the capability of transportation industry to utilize the economy of scale
and scope, and obviously reduces the cost in the process of transaction in freight container logistics. [2]
2.1 Freight container is a basic carrying tool in modern logistics
Railway is an important part in transportation resources. Professor Rong Chaohe considers that
transportation resources include fixed resources and removable resources which are together called hard
resources, as well as soft resources composed of manpower, information, organization and management
system etc. [3]
Transportation activity is a process to transport goods with transportation resources including removable
resources such as transportation containers and carrying tools, and the freight container is the most
important transportation container. The information indicates that along with development of freight
container technology, carrying tools like trailer flatcar, container flatcar, double-layer container, and
bi-technology have made a large development (Table 1).
399
Table 1 Container carrying tool development
China's domestic market
Market share
share
23%
95%
43%
25%
34%
25%
<1%
5%
Share
Tool Category
TOFC
COFC
Double stack
Bi-Modal
Foreign
share
5%
75%
75%
95%
markets
As the freight container is a special container of standard size, convenient for loading/unloading and
fixing, freight container transportation can make it easy for multiple means of through transport and
make the transportation process reasonable, so as to extremely promote development of modern logistics
industry.
2.2 Freight container logistics is the carrier to realize economy of network
The theory of transportation economics considers that with constant development of industrialization
process, the transportation level is also enhanced. When the transportation develops to the perfect stage,
the comprehensive logistics representative of freight container will take the dominant position (Figure 1).
Only if freight container logistics develops to be the basic mode in logistics industry can modern
transportation cost and logistic cost be greatly reduced and modern market scale and scope be largely
expanded.
Total cargo
Industrial stage
Pre-industrial stage
Post-industrial stage
Integrated Logistics
Airlines
Shipping
Pre-transport stage
Pipeline
Container transport
Highway
Railway
Time
Canal
0
The initial
Improved
transport stage
transport stage
Transport stage
Post-transport stage
Figure 1 Role of container transport in integrated logistics development [4]
In the senior stage of transportation development, one important reason for rapid development of freight
container logistics is that freight container transportation is of economy of scale and scope.
2.3 Freight container logistics is the platform to reduce transaction cost
Modern logistics is a complex involving transportation through highway, railway, waterway, and civil
aviation. Take the logistics of foreign trade as an example, the consigner takes the goods from factory to
400
the place as designated by the forwarder who then transport goods through trucks to the railway station;
the railway forwarder transport goods to the port where goods will be loaded on the ships; after ships
arrive at the destination, goods will be transported in two or more means of transportation like railway,
highway, civil aviation, and waterway (Figure 2) to finally complete goods transportation.
LCL Cargo
1
Warehouse
Terminal
Terminal
2
3
4
5
6 Warehouse
FCL Cargo
Container
1
Factory
Ship
Container Terminal
2
Factory
Container Terminal
Figure 2 Container intermodal chain diagram
The economics of transaction cost considers that many costs would arise for transaction activities
between economic bodies, including pre-transaction negotiation, execution, and after-transaction
supervision etc. Under an asymmetric system of information, one economic body may obtain benefits at
the cost of damaging other’s benefits as driven by opportunism [5] .Before emergence of freight container
transportation, there lacks protection of goods and it’s ambiguous in distinction of goods damage
liabilities, which cause failure of through transportation. With development of freight container logistics,
particularly the rapid development of intermediate organizations like forwarder, loading/unloading
supervision agency, and customs clearance company, the transaction cost of freight container logistics
and opportunistic act of the transaction body has been effectively controlled, and forwarder risks have
been largely reduced, which compose the key internal economic causes for rapid development of
modern freight container.
3 Development Trends of Freight Container Logistics in the Future
With constant development of freight container logistics, there are diversified types of freight containers,
and relevant laws and regulations have been consummated, through transportation devices have become
varied, and the transportation service has been developing towards seamless full-service mode.
3.1 Diversified types of freight container
Besides freight container as defined by ISO, there are also domestic containers and trailers in China in
multi-modal transportation. Presently, there are 14 types of dry cargo containers as ISO definition (Table
2).
Container Type
1AAA
1AA
1A
1AX
Table 2 list of ordinary dry cargo container standards of ISO
Outer dimensions (mm)
Length
Width
Height
12192
2438
2896
12192
2438
2591
12192
2438
2438
12192
2438
2438
401
（ ）
Load Kg
30480
30480
30480
30480
1BBB
1BB
1B
1BX
1CC
1C
1CX
1D
1DX
9125
9125
9125
9125
6058
6058
6058
2991
2991
2438
2438
2438
2438
2438
2438
2438
2438
2438
2986
2591
2438
2438
2591
2438
2438
2438
2438
25400
25400
25400
25400
24000
24000
24000
10150
10150
Actually U.S.A and EU countries have developed their own standards for containers with increasing
development of domestic and international logistics. For example, U.S.A, insisting on container of 8 feet
wide before, actually develops drastically. Owing to modification of domestic regulation on highway,
the container width has expanded from 8 feet to 8 feet and 6 inches (2,591mm) and length from 40 feet
to 45, 48, and 53 feet (or even 57 feet in some states) and height to 9 feet and 6 inches.
3.2 Unified laws and regulations
The economic globalization is increasingly developing, and the economic structure of global production,
circulation, trade, and cycling is gradually coming into existence, and the logistic standardization has
become an irreversible trend. As the core for integrity and cooperation in steps of international logistic
process, the freight container transportation standardization has undoubtedly become the key factor for
efficiency of international logistics. In such a case, it’s necessary to unify standards and regulations on
freight container logistics to give essential guidance in laws, regulations, and systems, so as to promote
efficient linkage between each step of freight container logistics, accelerate unification of standards on
infrastructures, carrying tools, loading/unloading devices, and accessories, and avoid efficiency loss or
cost increase caused by inconsistency standards. See Table 3 below for general standards, transportation
standards, loading/unloading standards, and information standards for freight containers in China.
Standard Type
Ontology Standards
Tray Standard
The standard of transport
Infrastructure standards
Handling Standard
Management Information
Standards
Table 3 Container Logistics Standardization condition
shipping
rail transport
Road transport
√
Common Criteria
√
×
√
×
√
√
√
×
×
×
√
√
×
×
3. 3 Various means of through transportation
Multi-modal transportation means a comprehensive transportation in two or more means of
transportation involving railway, highway, civil aviation, and waterway where one operator will under
take liabilities to goods under several means of transportation from the place of consignment to the
destination and charge based on the transportation agreement. With continuous enhancement of railway
transportation ability and improvement of multi-modal transportation with freight container, the mode of
freight container transportation in China is ceaselessly developing, largely promoting development of
freight container logistics.
3.4 Seamless multi-modal transportation
Complete transportation product means the concept of removal of goods from one place to the
destination as required by the customer; provision of complete transportation product by the forwarder
means the forwarder provides transportation service within certain period with one or more
transportation tools from one place to the destination. Seamless transportation as proposed by EU means
one way of transportation to avoid user’s contact with more than one railway transportation service
402
providers and long period of negotiation with railway forwarders in different regions. The constant
development of freight container logistics and enhancement of abilities of the logistic service provider to
provide complete transportation product and seamless services in the market has largely promoted and
contribute to the prosperity of modern economic transaction activities.
4 Conclusion
Freight container is a very important removable transportation tool in modern logistics industry, which,
directly causing reduction of transportation cost and increase efficiency, container is an important mark
of comprehensive logistics and transportation modernization. The importance of freight container would
be mainly represented in the following three aspects: (1) freight container is a basic carrying tool in
modern logistics; (2) freight container logistics is the carrier of economy of network; (3) freight
container logistics is the platform to reduce transaction cost. With integration of global economy and
intensification of economic activities between each country, the freight container logistics presents
development trends like diversified types of freight container, unified laws and regulations, various
means of through transportation, and seamless multi-modal transportation.
Acknowledgements:
Supported by Beijing Jiaotong University Science and Technology Innovation Fund for Outstanding
PhD and the Basic Industries Research Center of Beijing Jiaotong University, Transportation
Development Research Base of Beijing Jiaotong University, and topic of Regulation and Legislation of
Transportation Industry.
References
（ ）
[1]. Yang Qingbo. The development process of the container [J]. Logistics Age, 2007 10 : 70.
[2]. Zhang Rongzhong. Substantial increase in container throughput of ports in Asia and Europe in
recent [J]. International Market, 2008 6 : 38-40.
[3]. Rong Chaohe. Emphasis on transportation resources based on economic analysis of transportation
J . Beijing Jiaotong University (Social Science Edition), 2006 12 : 1-7.
[4]. Rong Chaohe. Recent progress in the theory of transport development [J]. China Railway Science,
2001 3 : 1-8.
[5]. Oliver E. Williamson. The economics of capitalism[M]. New York: Free Press, 1985: p276-279.
［］
（）
（）
（ ）
403