Diffusion Cycle of Containerization

Diffusion Cycle of Containerization

Containerization is evocative of a standard diffusion curve concerning four major phases:

  • Adoption. In the early 1960s, containerization was an unproven technology with a few competing standards in terms of size and latching systems. The services offered were specific (point to point) and represented a niche market. Still, containerization demonstrated that it achieved productivity gains through a much more efficient form of transshipment.
  • Acceleration. In the early 1970s, containerization became a recognized and emerging form of transportation. New services and networks were being established, which multiplied transport productivity. Growing volumes and the application of economies of scale underlined the competitive advantages of containerized shipping both at the modes and at the terminals. Inter-range services, which would become the standard network configuration for containerized maritime shipping, were being set.
  • Peak Growth. By the 1990s, containerization became the dominant support of global trade and globalization, heading towards its full market potential. Its diffusion was massive, particularly in newly industrializing economies such as China. Network development was facing growing complexities, which led to the setting of major intermediate hubs reconciling regional and global shipping networks.
  • Maturity. In a phase of maturity, growth is much less related to diffusion but with standard economic cycles and the exploitation of remaining niches, such as the containerization of commodities. It remains highly debatable if the global maritime container transport system has reached a phase of maturity as the financial crisis of 2008-09 represented a paradigm shift in demand patterns. While in many regions, such as in Latin America, growth remains significant (peak growth), in markets such as Japan, Western Europe, and North America, there are signs that the growth potential may have peaked.