One Hundred Ports: The numbers tell the story
Delving into the Lloyd’s List archives, volumes at the world’s largest box ports from yesteryear show the rapid pace at which containerisation has evolved
The development of container port throughput figures from the early 1970s through to today charts the rise and success of containerisation. From the early transatlantic traders to East Asia’s manufacturing boom, and from the industry’s ‘golden age’ to China’s rise to prominence, it is a story 60-plus years in the making
LLOYD’S List’s record of global container throughput totals stretches as far back as 1973. Comparing the ports that held the top-ranking positions nearly half a century ago with those of today, the regional variation is immediately apparent. Yet perhaps even more striking is the astronomical rise in port volumes.
Charting the fate and fortunes of the world’s elite container facilities over the decades is reflected in the changing face of containerisation.
Although the idea of putting goods into a container is centuries old, it was not until the late-1950s that the concept of ‘containerisation’ with which we have become accustomed was born.
When Malcom McLean converted the first commercially successful containership, Ideal-X, in 1956, it was the inception of an industry that opened new markets and gradually connected just about every corner of the world to the global economy.
Containerisation has undertaken a significant role in the rise of globalisation, evolving into a seamless, interconnected, intermodal freight system that dramatically reduced the cost of shipping goods internationally, spurring the post-Second World War boom in international trade and allowing the age of consumerism to prosper.
The container ports dotted along the coastlines of major cities and population arteries globally, provide the vital link between land and sea. Like the thousands of ships they serve, the ports too have grown in size and magnitude as ocean volumes and the container industry’s reach has steadily risen over the past 60-plus years.
Although Lloyd's List's figures do not recount containerisation in its entirety, it was not until the late-1970s that ports’ handling figures were consistently measured.
In the early years, numerous ports would report all containers; others included just loaded volumes; while some would use different methods of counting odd-sized containers, or those not of the standard 20 ft or 40 ft variety, which would often skew reported totals.
Further, these initial figures pick up the story when the industry had already started to make headway and intercontinental box trade was in its fledgling years.
Volume development thereafter depicts the rise of manufacturing powerhouses, the industrialisation of nations, economic progress, and the geopolitics and government policies that have shaped the dynamics of containerised trade.
Setting the standard
After container shipping’s trailblazer Ideal-X, ships carrying containers soon started to operate up and down the US Atlantic and Gulf coasts.
Renowned historian, economist and author Marc Levinson recalls to Lloyd’s List how similar experiments took place a few years later on the US west coast, from California to Hawaii, but also from the US east coast to Puerto Rico.
Crucially, he explains, these were routes to destinations that did not compete with the railroads.
However, it was not until the 1960s that containerisation expanded beyond the US and its territories intercontinentally.
Critical to this development was the standardisation of the container, at first in the US, but then with Western Europe and Japan, and eventually through the International Organization for Standardization, where an agreement was reached on the 20 ft and 40 ft standard sizes, or today’s ISO containers, explains Mr Levinson.
“This agreement made it possible to be confident that one could ship a container anywhere in the world. Any containership would be able to handle it; and a crane in any port, or rail yard. That really set the stage for the expansion of container shipping internationally,” says Mr Levinson.
Standardisation was also important as it freed up capital. Whereas previously private capital was extremely reluctant to invest in an industry without such metrics, the money soon flooded into the industry and container shipping quickly accelerated.
This helped drive transatlantic trade in the 1960s — so much so that breakbulk shipping across the Atlantic effectively evaporated in the space of just a few years.
Container ports began springing up across Northern Europe to serve this burgeoning trade, including in Rotterdam, London and Bremerhaven, while container shipping’s port pioneers on the US Atlantic and Gulf coasts grew in stature.
By the time Lloyd’s List started to record container volumes on an annual basis in the early-1970s, volumes were still largely concentrated on ports on either side of the Atlantic.
In 1973, the world’s largest port at the time, New York/New Jersey, handled just over 1.6m teu — double that of its closets rival Rotterdam. New York/New Jersey was one of seven US ports — eight, if including Puerto Rico’s San Juan — making up the top 20 largest ports.
A further seven spots were taken by Northern European ports, but — and in stark contrast to today — only four from Asia.
Interestingly, Melbourne was also among the world’s top 10 container facilities, as one of the early adopters of containerisation, having begun regular European services in the late-1960s.
Asia came late to the initial box party. The political situation in China meant it was effectively isolated, so commerce between other nations was minimal, says Mr Levinson.
South Korea, although industrialising — exporting apparel and similarly low-value goods to ramp up its manufacturing sector — was still very much a labour-intensive economy, he adds.
“Meanwhile, the US was engaged in war in Vietnam, Cambodia and Laos in the early-1970s, so there was effectively no foreign trade from those countries. Many countries such as India had pursued autarkic economic strategies, so there was not a great deal of foreign trade there. Essentially, the North Atlantic is where it was at.”
Containerisation in Asia did not really kick off until, once again, Malcom McLean drew attention to what intermodal freight could achieve with the first container shipping across the Pacific.
Mr McLean, who ran Sea-Land Services at the time, was awarded a contract by the US Department of Defense to run containerships from California to a port that he built in Cameron Bay, as a way of straightening out the highly publicised logistical problems of the US military in Vietnam, says Mr Levinson. It was an overwhelming success.
“His contract was for carrying goods from the US to Vietnam. There was no backhaul. So he hit upon the idea of stopping in Japan for backhaul — and that was more or less the beginning of the large import surge from East Asia to the US.”
Over time, trade across the transpacific and with Western Europe from East Asia began to displace North Atlantic container trade.
In the early-1980s, although major ports in the US and Northern Europe were still clocking up some of the largest annual throughput figures — with Rotterdam as the world’s largest port, having usurped New York-New Jersey — East Asian ports began to grow rapidly.
The manufacturing boom in East Asia saw ports such as Japan’s Kobe and Yokohama, Kaohsiung in Taiwan, as well as Busan, South Korea, come to the fore.
Singapore was also on the rise. Mr Levinson explains how the country was vastly impacted by Britain’s decision in the early-1970s to withdraw troops from its military bases in Southeast Asia.
Singapore built vessels and maintained a good part of the British fleet, so the country was devastated when Britain closed the docks — and the political leadership had to figure out something else to do to maintain its economy pretty quickly.
“So transhipment and servicing for vessels passing through [the port] were natural things for Singapore to focus on,” says Mr Levinson.
Transhipment was not common in the breakbulk era, but this became feasible through the rise of container shipping. Singapore saw an opportunity to become a transhipment hub for regional trade that could bring huge benefits to its economy — a model that has since been replicated and proven successful the world over.
Singapore’s success in the transhipment market saw its port grow to be the largest globally for periods in the 1990s and at the start of the 21st century. Indeed, Singapore has remained among the top two busiest box ports from 1988 through to this day.
The rise of Singapore coincided with that of Hong Kong, which also enjoyed several stints at the top of the throughput tree during this period.
Before China began to open its economy a little in the 1990s, Chinese exports were carried to Hong Kong, which essentially became its trade gateway to the world.
Although there was a lot of manufacturing in China, Hong Kong was one of the original outsourcing locations for both Japanese and US industry, adds Mr Levinson.
The 1990s signalled the start of container shipping’s ‘golden age’, as global trade took off. More and more goods were traded economically, and manufacturing across developing nations in East Asia grew exponentially.
Cheap labour was, of course, crucial, but containerisation made shipping goods manufactured in East Asia economically viable.
Western consumers could not get enough of the easily affordable TVs and other household appliances, clothes, footwear and furniture shipped from the other side of the world. Container port volumes went through the roof.
In 1990, figures published in the Containerisation International Yearbook show annual global container throughput at below 100m teu; by the start of the 21st century, it had more than doubled to a figure approaching 250m teu.
The success of containerisation in the 1990s did not escape the attention of China, where much discussion had taken place as to how it could capitalise on this expanding industry.
Although Shanghai became a top 10 port towards the end of the decade, the absence of Chinese representation at the upper echelons of the throughput tables before then is striking.
In the late 1990s, China started investing heavily in port infrastructure. Huge container terminals were developed up and down its coastlines in support of thriving export trade, buoyed by its burgeoning manufacturing sector and cheap labour market. China became the factory of the world.
Fast-forward to 2010, and Shanghai had replaced Singapore as the world’s largest container port — where it remains to this day — and no fewer than six Chinese ports were among the biggest globally in annual throughput terms.
China’s rise to prominence at the start of the century came as container trade continued to accelerate. Global supply chains had evolved to become more intricate and inclusive, supporting the rapid growth of e-commerce.
Indeed, for most of the so-called ‘noughties’, box throughput totals continued to outpace GDP growth, as in previous decades. By the end of that decade, however, container throughput levels had surged to more than 500m teu per annum.
The only blip came in 2009, when the global financial crisis led to the industry registering its first annual fall in container throughput since inception — a feat only repeated once since then, during 2020’s Covid-induced downturn.
Yet the crisis also marked a period of more moderate growth — which was more in line with global economic growth — in a trend that has largely continued through to today.
In terms of container trade dynamics, the big story from a port sector perspective over the past 20 years, though, is the sustained dominance of China, developing in tandem with its meteoric economic rise.
Today, China’s ports make up seven of the top 10 largest ports, one quarter of the top 100, while volumes handled at Chinese container facilities represent more than 40% of total trade handled by the 100 ports in Lloyd’s List’s latest rankings.
How times have changed…