One shipping company can start an industrywide trend with a push for something different, or it can doom itself with a strategic misstep. APL Logistics is pushing ahead with plans to field more 53-foot shipping containers simply because they match well with U.S. truck configurations. The problem is that U.S. trucks are the only leg of the global transportation system that is out of step with global container standards.
The intermodal industry is built around the twenty-foot equivalent unit (TEU), a decades-old measure of container traffic that relates directly to the size of a standard oceangoing container. One retailer complains that the 53-foot box makes transloading easier. They may be a lonely voice in the sector. Their distribution model is built around cheap Asian imports flowing from West Coast ports to East Coast markets. There is no guarantee that model is sustainable if rising energy costs make Asian imports more expensive.
Do longer containers pose problems for infrastructure in some places? State highway planners will have to think of new routes for extra-long trucks. Longer routes will add to shipping time and costs. LTL truckers and railroads are used to the TEU standard. Forcing them to change will force them to think about dropping some shippers as customers.
Even APL admits that only a small part of its fleet can handle 53-foot containers. Committing to newbuilds that can stack configurations other than the TEU will drive up per-ship costs as the shipbuilding industry adjusts to boutique requirements. Even analysts won't be happy with this move, because they'll have to adjust their traffic calculations to equate cargo volumes carried by two different configuration standards.
Betting against the TEU configuration is probably a bad idea. It reminds me of the U.S.'s refusal to adopt the metric system for weights and measures, which adds to the administrative costs of foreign manufacturers who want to ship goods here. Retailers who think their buying power will force carriers to adopt a new container standard assume the rest of the world will adjust. The world is pricing in the end of American dominance in more ways than we know.
The intermodal industry is built around the twenty-foot equivalent unit (TEU), a decades-old measure of container traffic that relates directly to the size of a standard oceangoing container. One retailer complains that the 53-foot box makes transloading easier. They may be a lonely voice in the sector. Their distribution model is built around cheap Asian imports flowing from West Coast ports to East Coast markets. There is no guarantee that model is sustainable if rising energy costs make Asian imports more expensive.
Do longer containers pose problems for infrastructure in some places? State highway planners will have to think of new routes for extra-long trucks. Longer routes will add to shipping time and costs. LTL truckers and railroads are used to the TEU standard. Forcing them to change will force them to think about dropping some shippers as customers.
Even APL admits that only a small part of its fleet can handle 53-foot containers. Committing to newbuilds that can stack configurations other than the TEU will drive up per-ship costs as the shipbuilding industry adjusts to boutique requirements. Even analysts won't be happy with this move, because they'll have to adjust their traffic calculations to equate cargo volumes carried by two different configuration standards.
Betting against the TEU configuration is probably a bad idea. It reminds me of the U.S.'s refusal to adopt the metric system for weights and measures, which adds to the administrative costs of foreign manufacturers who want to ship goods here. Retailers who think their buying power will force carriers to adopt a new container standard assume the rest of the world will adjust. The world is pricing in the end of American dominance in more ways than we know.
