By Sultan Bin Sulayem, Special to Gulf News
In the age of mega-ships, it will continue to dominate all trade forms
The internet and technology have revolutionised the way we do business … but it was a simple metal container that first transformed global trade, spawning an intricate secret web linking global economies.
Towers of aluminium or steel boxes at ports may not be immediately inspiring, but they are of immeasurable value to everyone. I remember well how the container changed for the better the way goods were packed and transported, whether a prized toy for a child or a vital piece of machinery for a budding entrepreneur.
No longer did ports have to deal with loose cargo that could be easily damaged or odd-sized boxes that required big crews to organise. Instead containers fit together as easily as Lego blocks, making loading a precise science, improving safety while cutting transportation and insurance costs.
Containers have been the backbone of modern commerce for over half a century following their invention in 1956. These humble metal boxes have had as big a role as trade pacts in boosting global trade.
A tripling of growth in container shipments generates 1 per cent growth in global GDP; that’s meaningful, equal to around $730 billion in 2015. Last year the world’s ports handled 685 million containers, while at DP World we moved 62 million across our global portfolio spanning 40 countries — that’s around 9 per cent of global trade by sea.
Container traffic will continue carrying the majority of global trade for the foreseeable future, with sea trade domination, currently accounting for 90 per cent of international trade, expected to prevail.
However, we have now moved into the era of the mega-vessel — giants of the seas requiring pricey investment in deep water ports to accommodate them on their voyages around the world. If placed vertically, these ships would tower over many skyscrapers. Research shows that there are now around 120 mega container ships worldwide, each able to hold between 13,000 to 20,000 containers.
DP World terminals in South Korea, China, the UAE, Belgium, France and the UK now have the ability to handle these juggernauts, while our flagship Jebel Ali port (UAE) can handle 10 of them at the same time.
For ports and logistics operators like us, the trick now is to further maximise efficiency, making sure innovations coming on stream are able to lower costs, increase productivity and move goods arriving in vast quantities from these enormous ocean carriers quicker and faster than before.
The opportunities in global trade and logistics are numerous and the UAE is well placed to take advantage as our leaders have delivered infrastructure projects that have transformed Dubai into a cosmopolitan trading and financial hub that sits at the crossroads of world trade.
Our country was able to capitalise on trade to diversify its economy and I have personally seen this transformation. I am proud to have been part of a government-led effort since the 1980s to boost our trade activities.
Yet our vision at DP World is also global and foreseeing change, thinking about future opportunities, enhancing efficiencies and adopting innovative and creative trade solutions is part of what we do. In an age of unparalleled change, transforming the way goods are transported is being explored across the world.
Moving containers in different ways both by sea and across land has exciting potential.
As part of that future thinking we’ve formed an agreement with Hyperloop to investigate the business case, route options and cost to build and operate a Hyperloop “cargo offloaded” in Dubai.
A dedicated Hyperloop tube could zip containers quickly, safely and reliably to an inland hub, freeing up valuable space on the quayside and relieving Dubai’s roads of congestion and pollution.
A Hyperloop tube could tunnel underground or fit within existing rights of way, minimising the impact on cities. For large continents such as Africa and Asia this mode of transport could well prove valuable along with the development of inland container terminals allowing us to deliver containers in more convenient locations.
Hyperloop is one of these disruptive innovations to make that happen.
And what other smart trade innovations will we see? Will trade move from sea to land? While I believe maritime transport will continue to dominate the way we deliver goods to our shops, inland trade also offers opportunities to develop new trade routes and to enhance connectivity globally.
By building free zones, rail, air and seaports with inland counterparts and where customers want them to be, the way we trade could again take a quantum leap forward for the benefit of economies around the world.
That’s why the New Silk Road offers further exciting opportunities connecting China, Asia and Europe.
The technological innovations we are seeing now are very exciting, but let’s not forget how the simple invention of a metal box to transport cargo revolutionised our industry.
Perhaps there is something simple yet magical lying ahead to change the shape of trade and logistics for the next 50 years.
Maybe the container is here to stay and the disruption will come on the transportation side. At DP World we are looking at all the scenarios, the shifting global trade patterns, increasing urbanisation, macroeconomic trends, the digital economy, and road-testing innovations to strengthen global trade for generations to come.