Containerization and world trade

The introduction of containers has dramatically simplified international trade but has been resisted in some ports with even more dramatic consequences. Before containers, the unloading of ships was a process that would drag on for days, if not weeks, involved a lot of manual labor. With containers, a ship can unloaded or loaded in hours. Unions resisted the containerization of port facilities, and where this was successful port became rapidly obsolete and underused. The prime example was Liverpool, which is still reeling from this major negative shock to its most important economic sector. The ports that quickly adopted container thrived though, and mostly still do. While there are undoubtedly distributional consequences, what has been the overall impact of the introduction of containers?

Daniel Bernhofen, Zouheir El-Sahli and Richard Kneller exploit the different timing of the adoption of containers across ports to tease out how much more international trade containers have brought. For trade among developed economies, they find that containers multiplied exchanges by about eight over a twenty year period. That is huge. The much celebrated impact of the GATT is about half that, still huge though. This shows that any study about the growth of trade around 1960-90 needs to take containerization into account.