Introduction
Containerization of the global transport system was directly related to the increase in the share of general cargo turnover in the world and became one of the primary ways to of its improvement during the era of scientific and technological revolution. The use of containers for the transportation of cargo shortens the time of loading and unloading, hence reducing the cost of human labor. In comparison with the old ways of transportation, it increases the process productivity significantly. The introduction of standardization of the containers has allowed unifying the transportation process and contributed to the organization of multimodal transportation by different types of transport. Therefore, containerization of the world transport system is often referred to as the container revolution. In addition, it has also introduced the concept of the container terminal – the place of storage, loading, and unloading of containers with the help of special equipment. The container revolution has affected railway, road, and water transport. At the junctions of sea and land trade routes, large terminals adapted for the transport of containers have appeared. The same can be said about road transport, where the use of containers has contributed to the door-to-door delivery of various cargoes, especially in the presence of not only the main but the feeder (side) roads. Still, containerization had the most significant effect on the water, especially the sea transport, causing a significant change in the structure of the trading fleet (vessels with horizontal loading) and the port facilities (container terminals and ports).
However, despite the growing popularity of container transportation and the fact that certain cargo routes have been containerized completely, there is still a particular group of products that was left almost untouched by the container revolution – commodities. This problem has attracted the attention of many scholars, becoming a central topic of many scientific works on economics and logistics, including the article by J.-P. Rodrigue and T. Notteboom titled as The Containerization of Commodities. The following work is dedicated to the discussion of the mentioned article, including the comprehensive analysis of opportunities, issues, and challenges presented by the containerization of commodities.
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Analysis
In their article, Rodrigue and Notteboom point out that containerization is underrepresented in the process of transportation of commodities, as well as the cold chain (Rodrigue & Noteboom, 2013). However, they do not explain the reasons for such a situation. Therefore, for further discussion to be comprehensive, it is necessary to define them, namely by understanding the meaning of such terms as containerization and commodities.
Thus, containerization is a process of transportation of general cargo (resources and products that are transported in the packaging) in special metal containers. According to Rodrigue and Notteboom, commodities are consumable resources that have no qualitative differentiation (Rodrigue & Noteboom, 2013). In terms of transportation, bulk commodities, such as grains, oil, cotton, and coffee, present a particular interest because they are usually transported without packaging, i.e. in bulks. Thus, it can be said that containerization and bulk commodities are virtually incompatible terms, which can be considered one of the primary reasons for the underrepresentation of container transportation in the logistic chain of commodities. However, modern realities have somewhat changed the situation. Even though in the extent of the total cargo handling, the sector of bulk commodities that are transported in containers is rather small, it develops quite dynamically. The authors consider the reasons for such shift to be a global trend for containerization of cargo traffic, which has resulted in the emergence of niche transport systems that do not use containers yet and, thus, have a potential for further development (Levinson, 2010). It should be noted that this statement is indeed true, especially for the developing countries, the export growth rate of which exceeded the growth rate of imports (e.g. agriculture-centered states). In turn, the volume of shipment of bulk cargoes increases, spurring a particular interest in containerization from the side of traders. For example, grain traders start considering an opportunity of transporting exclusive batches of grain in containers (Van Ham & Rijsenbrij, 2012). However, this trend is not limited to the developing countries only; in particular, authors note that about 9% of waterborne agricultural exports of the United States are shipped in containers (Rodrigue & Noteboom, 2013). Moreover, the commodity niche of the global transportation market continues its movement towards containerization due to several factors. First of all, containers are widely available throughout the transport markets of the world (however, this fact does not guarantee there will be no shortages). A minimum load unit for bulk cargo increases with each year, making it difficult for the smaller commodity exporters to access other markets without resorting to containerization. The prices for commodities, as well as the demand for them, also increase, especially in the new markets. In such conditions, containerization of commodities may be one of the ways of adding value to the product. In addition, bulk shipping becomes more expensive than usual, forcing the traders to search for alternative and more stable ways of shipment. At the same time, container shipping costs remain relatively stable. By being combined with an opportunity to use the pools of empty containers for the organization of the backhaul (return) flows of commodities, these facts make containerization of commodities quite feasible (Rodrigue & Noteboom, 2013).
Thus, having read the first part of an article by Rodrigue and Notteboom, one may ask about the reasons for the delays in the process of commodities’ containerization. Indeed, as mentioned by the authors, such an opportunity is often overlooked by traders. At the same time, the shift to another method of transportation for the entire group of products is not meant to be an easy process. In particular, Rodrigue and Notteboom mention several issues and challenges that accompany the process of commodities’ containerization. In general, they can be identified as those belonging to the either technological or infrastructural aspect of the problem. The technological aspect includes the availability and preparation of containers for the transportation of bulk commodities, as well as the process of loading and unloading. For example, bulk commodities are often characterized with a higher weight, which may result in an excessive load on the container and the potential damage both to it and the cargo it holds (Rodrigue & Noteboom, 2013). As a result, there may be a need for modernization of the existing containers and the potential change of standards of their construction. It is also possible to complement the authors’ finding by adding technological problems observed during stuffing the containers with bulk commodities in the conditions of low temperatures, when such cargoes as grain may get frozen, and, thus, require special conditions of loading and unloading (Gunther & Kap Hwan, 2005).
Infrastructural aspects of the problem are related to the fact that the handling of containers requires certain changes in the entire transportation system. Such a system is a rather complex mechanism that requires a professional approach, since a single failure may result in delays throughout the entire supply chain, disrupting the normal flow of commodities through it. This is especially true for containerized chains that operate in conditions of containers deficit (e.g. the mentioned backhaul flows) (Gunther & Kap Hwan, 2005). At the same time, the authors primarily concentrate their attention on the terminal and translating issues, which are closely connected to a certain peculiarity of the commodities. In particular, they are extracted in the inland areas and are usually consumed in coastal regions, meaning that their containerization requires a presence of a developed infrastructure (roads, terminals, and railways) connecting such areas. In addition, as noted by the authors, terminal characteristics and dynamics of bulk cargoes are quite different, which requires increased flexibility of terminals (Rodrigue & Noteboom, 2013).
It should be noted that in their work, Rodrigue and Notteboom primarily refer to the experience of the developed countries. However, in the conditions of globalization, it may be necessary to take into account the capabilities of the developing states in terms of containerization of commodities. In particular, such issues as physical and moral deterioration of technical equipment, as well as the old technology of transshipment may be rather common there, which may slow down the processes of stuffing and loading. In turn, a slowdown on this stage may affect all the subsequent processes, ultimately leading to the failure of shipment. In this regard, the unavailability of the infrastructure of certain developed countries to provide services of stuffing and loading inhibits the development of containerization not only in them but in the entire world (Gunther & Kap Hwan, 2005).
The list of issues and challenges, accompanying the process of containerization of commodities is not limited by the ones presented by Rodrigue and Notteboom. In particular, the authors did not pay much attention to the economic component of the problem, which calls for additional research on this matter. First of all, it should be noted that bulk cargoes, including commodities, are usually very sensitive to any, even small changes in tariffs for transportation in the entire supply chain, especially in terms of sea freight (Van Ham & Rijsenbrij, 2012). This aspect is particularly relevant in the modern economic conditions, as the costs of container shipping have also increased. The arguments of the transporters are rather clear – the fuel prices are growing; however, an increase in freight reduces the turnover of cargo, as it is unfeasible for the smaller traders to transport it by any means, including the containers. Of course, certain types of bulk commodities that have rather high prices and are characterized by stable demand for them, such as coffee, will not have their profitability lowered significantly. Indeed, the authors mention that currently, about 95% of European coffee imports are shipped in containers (Rodrigue & Noteboom, 2013). However, the same cannot be said about such bulk commodities as grain or chemicals, as they have rather different demand structures (for instance, they present interest for a limited circle of consumers) and lower profitability per ton. In addition, the agricultural products are characterized by seasonality, meaning that their supply, as well as the demand for them, varies throughout the year. As a result, it may be impossible to use a single method of transportation for them. Indeed, the authors note that the coexistence of bulk and container transportation in such conditions is to be of a complementary, rather than a competitive nature (Rodrigue & Noteboom, 2013). However, due to the differences in terminal characteristics and dynamics, one of the methods will remain preferable, while the complete transition to containerization will mean that both traders and transporters will have to refuse from their old and tested transportation models in the favor of the new one. In the end, the authors state that the outcome of the abovementioned shift, as well as the coexistence, is yet to be defined, leaving the question of the feasibility and possibility of containerization of commodities open.
Conclusion
The article by Rodrigue and Notteboom gives an insight into the problem of containerization of commodities in the modern economic conditions, describing the current state of affairs in the transportation industry in a rather generalized way and based on the global trends, rather than local ones, which makes it possible for the reader to conduct an additional, more comprehensive research on the matter; in combination with the openness of the question on the feasibility and possibility of containerization of commodities, these facts make it possible to assume that the reviewed article was meant to be a starting point for a wide array of the related researches; instead of focusing on a single aspect of containerization of commodities, Rodrigue and Notteboom have presented all of them at once, making it possible for the reader to see the entire picture and potentially center his/her attention on the particular aspect of the problem, with a probability of its further analysis.
