View Full Version : Is the container ship responsible for China's growth?
09-28-2010, 06:13 AM
I'm wondering if the container ship is responsible for China's growth. Did the lower cost of shipping allow Chinese goods to be more competitive, which allowed the Chinese economy to grow?
09-28-2010, 07:35 AM
Sure. Well that and Richard Nixon.
09-28-2010, 07:57 AM
Well, it's part of it. But if stuff still went with general cargo ships, I bet they'd still be pretty competitive. I think we here in Europe should blame Vasco Da Gama. He found the way around Africa. Who should the Americans blame? Magalhaes, maybe...
09-28-2010, 08:37 AM
I don't think it's just the container ship, but instead the whole system of containerized shipping. I don't have any hard numbers but I believe that it has in fact lowered the cost of shipping worldwide.
09-28-2010, 08:42 AM
Whatever advantages container shipping gives to China, it also gives to the rest of the world. So it's not the container ship.
09-28-2010, 09:07 AM
No, but to paraphrase Thomas Friedman, containerized shipping has flattened the world. It's removed one advantage that a local supplier has over one on the other side of the world.
09-28-2010, 09:07 AM
Chinese goods sold very nicely in the US prior to Mao's takeover. The main difference was that back then, they were derided as being cheap and now cheap is good.
09-28-2010, 09:21 AM
A couple of years ago, an economist named Marc Levinson wrote a book on exactly this subject. It was called The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (http://en.wikipedia.org/wiki/The_Box_%28book%29) and it was supposed to be good, although I haven't read it.
09-28-2010, 09:35 AM
IIRC, one of the premises of certain cyberpunk novels like Snowcrash was that cargo dirigibles (there was big interest in reviving these at one point) would extend the container ship concept to every point of the globe, "flattening" the globe almost completely.
One big result of reduced shipping costs was the rise of the idea that we were entering a post-industrial society; that manufacturing would become a global commodity, where it largely wouldn't matter where stuff was physically made.
09-28-2010, 02:11 PM
I read where it claimed that cargo containers lowered the cost of loading a ship from $5.86 per ton to 16 cents a ton. I assume that is figured using unionized longshoremen. There are additional savings from being able to turn the ships around quicker.
I don't know what it do for American jobs, but I suspect we would buy a lot more of our merchandise from Mexico, than we do now. The savings on rail and truck shipping are probably a lot less dramatic, since they are already containers with wheels on them anyway.
That might be an indirect benefit, since there would be less illegal immigration if there were more jobs paying a living wage in Mexico.
09-28-2010, 02:26 PM
There was a program recently on TV here and switching to containers all but eliminated theft and breakages. The test case for the transatlantic trade was whisky. Previously, so much got stolen or broken (often deliberately) that it wasn't worth trying to send it to America by sea. But the containers of Scotch made it intact and that was that.
But the key move was that the inventor of the container system, John McLean, patented it and then let people use it freely.
Stranger On A Train
09-28-2010, 06:48 PM
There was a program recently on TV here and switching to containers all but eliminated theft and breakages.The use of shipping containers may have controlled gross theft and deliberate breakage, but it certainly hasn't eliminated it. Container crane operators are known to occasionally drop a container that has a valuable manifest, and the cargo is usually OSDed (Overstock, Salvage, and Damaged) immediately by insurers, who don't care where the contents go.
The use of cargo containers has allowed more efficient handling and stowage of non-bulk commodities, and also protects them better during shipping than hull stowage in open crates, especially when dunnage bags are used. (CONEX-type containers are surprisingly watertight, to a point of being a minor shipping hazard if lost at sea.) The really big advantage of shipping containers, though, is that they make intermodal transfers (from or to ship to rail or over-the-road truck) enormously more efficient; you basically pull a container, drop it on a strongback trailer, and have an intermodal tractor pull it over to a parking lot where it will be picked up by an OTR tractor or loaded onto a rail car.
As for the o.p.'s question, the use of CONEX-type containers has certainly facilitated industrial globalization, making it possible to ship goods inexpensively from remote parts of the globe that have never heard of fair trade or employee protection laws to North America and Europe. However, I don't think this contributed to mainland China's economic growth any more than it has any other nation in particular. The Chinese mainland is certainly dependent upon containerized shipping, but so is the rest of the Pacific Rim, and in particular Taiwan, Malaysia, Indonesia, and the Philippines.
China's growth can largely be credited on a formerly untapped cheap labor market, a wealth of natural resources that China is currently exploiting the living hell out of, a strong effort toward investment and economic commerce in Africa that Europe lost in the post-colonial period, and a gap in current socioeconomic spectrum left by a progressively post-industrial Western hemisphere. Like other upcoming industrial nations, China has a very laissez-faire attitude toward business use of labor, but at the same time maintains fairly tight control over production, and also has resources to invest in infrastructure and technological development (when they don't steal it outright from someone else). Right now China (Microchip Technology Trading) stands poised to flood the mobile market with inexpensive microchip technology, which has nothing to do with its shipping market.
09-28-2010, 10:44 PM
The use of shipping containers may have controlled gross theft and deliberate breakage, but it certainly hasn't eliminated it. Container crane operators are known to occasionally drop a container that has a valuable manifest, and the cargo is usually OSDed (Overstock, Salvage, and Damaged) immediately by insurers, who don't care where the contents go.
I can't speak for the US but this doesn't apply here in Australia or any first world jurisdiction in which I have done much work. I very much doubt it is true in the US though I haven't had a lot to do with claims there.
If a container is dropped there are cargo surveyors called in by the insurer which absolutely does care what the state of the contents is, and whether it can be salvaged. Further, unless the container is damaged so badly that it can't be moved (in which case the content will be cactus anyway) it is moved out to to the owner (shipper or consignee) who takes up the claim. No way can crane operators get any advantage.
(CONEX-type containers are surprisingly watertight, to a point of being a minor shipping hazard if lost at sea.)
No, they are weather tight but take on water around the door seals very rapidly. They are a minor shipping hazard because they are often stocked with goods that themselves have bouyancy sufficient to keep the container afloat.
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