Containerization - Trade glossary

Definition and principle

Containerization is the intermodal transport system using standardised containers (ISO standards) to ship goods by sea, road, and rail. Developed from the 1950s by Malcolm McLean, it revolutionised international trade by drastically reducing handling costs and loading/unloading times.

Standards and dimensions

Containers are standardised by the International Organization for Standardization (ISO), primarily standard ISO 668:

20-foot (TEU): 6.1 m x 2.44 m x 2.59 m — standard unit of measurement for container traffic
40-foot (FEU): 12.2 m x 2.44 m x 2.59 m — the most commonly used in practice
40-foot High Cube (HC): height increased to 2.9 m — for voluminous goods
Special types: reefer (refrigerated), open top, flat rack, tank, bulk

Impact on Incoterms and customs

Containerization has had a direct impact on Incoterms usage:

FOB and CIF terms are designed for goods loaded individually on board the vessel — they are unsuitable for containerised transport as the container is usually handed to the terminal before loading on board
FCA and CIP terms are recommended for containerised transport as risk transfers when goods are handed to the carrier (at the terminal)
The ICC has explicitly recommended this substitution since Incoterms 2010

Customs implications

The container number is a mandatory element of the customs declaration and ENS (Entry Summary Declaration)
The Verified Gross Mass (VGM) of the container has been mandatory since the SOLAS 2016 convention
Containers are subject to security controls (scanning, physical inspection) under ICS2
Container identification uses the BIC (Bureau International des Containers) system with a 4-letter owner code + 7 digits