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 |
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.