Daily Archives: May 24, 2013

I Am The Freight Container

I am the freight container
And I now just where I stand
Another freight enabler
And another caravan
Today I am your champion
As I have won your hearts
And I know the game
You won’t forget my name
And I’ll still be here
In a hundred years
As I’m still state of the art

I am the freight enabler
As I have reduced your price
The things you did not know at first
You learned by doin’ twice
And you cannot replace me
No mater what they say
No one else can dent
by ninety seven percent
shipping costs compared
to loading freight impaired
by old bulky wooden crates.


Little did Malcom McLean know when he first invented, patented, and then sent the first metal shipping container on its way on April 26 in 1956 that it would do more to enable global trade than any treaty or global trade organization ever would. As pointed out in this recent economist blog that asked why have containers boosted trade so much, a recent paper by Daniel M. Bernhofen, Zouheir El-Sahli, and Richard Kneller on Estimating the Effects of the Container Revolution on World Trade, has disentangled the impact of trade deals from that of shipping containers and derived a rather shocking result. Analyzing the data from 22 industrialized countries, the study found that that containerization is associated with a 320% increase in bilateral trade over the first five years and a 790% increase in bilateral trade over 20 years. On the other hand, a bilateral free-trade agreement only boosts trade by 45% over 20 years and membership in GATT (the General Agreement on Tariffs and Trade) raises trade by 285%. In other words, a trade agreement will boost trade 50%, membership in GATT will increase trade by a factor of two and a half, but containers will increase trade by a factor of 8!

So, not only did they greatly reduce shipping costs (by 97% according to the shipping records maintained by Mr. McLean who saw his costs per tonne fall from $5.83 per tonne for loose cargo to $0.16/tonne), but they have already done more for global trade than any long winded bureaucrats and diplomats ever will.