Growth Factors behind the Containerization of Commodities


Factor Outcome
Growing availability of containers More containers available on freight markets. Ubiquitous transport product.
Rising demand and commodity prices More commodities in circulation (usage of containerization to accommodate growth).
New producers and consumers (marginal markets penetration).
Volatility and rises in bulk shipping rates Decrease in the ratio cargo value per ton shipping rate for commodities.
Volatility (rates) and risk (hedging).
Search for options to bulk shipping.
Low container shipping rates Increase in the cargo value per TEU shipping.
Relative rate stability.
Imbalances in container shipping rates Export subsidy for return cargo.
Empty containers repositioning Pools of containers available for backhauls.
Processing Processing close to production favors a shift from bulk to containerized shipping.

The above table underlines the main factors behind the containerization of commodities. Depending on the circumstances and the commodity trade involved, each factor plays a different role. For instance, in the United States, imbalances in container shipping rates have favored the export of low value commodities (e.g. waste paper) across the Pacific.