Container Shipping and the TEU Metric

A shipping container is a large, strong steel box of a fixed standard size that carries goods by ship, train and truck without being opened in between. Because every container in the world has the same basic size and the same corner fittings, any crane, ship, rail wagon or truck can lift and carry any container.

The TEU (Twenty-foot Equivalent Unit) is the unit used to count containers: one 20-foot container is 1 TEU, and one 40-foot container is 2 TEUs. Ship sizes, port traffic and factory output are all measured in TEUs.

Why does it exist?

Before containers, goods were loaded onto ships one sack, barrel or crate at a time. This was called break-bulk cargo. Hundreds of dock workers carried each item by hand. Loading one ship could take days, goods were often damaged or stolen, and port costs were a big part of the final price. Containers solved this.

Goods are packed once at the factory, the box is sealed, and it is opened only at the buyer's warehouse. Think of it like a tiffin box: you pack food once at home and carry the same box on a bus, a train and to your office, without taking the food out each time.

Where did it come from?

The modern container era began on 26 April 1956, when an American trucking businessman, Malcom McLean, sent a converted oil tanker, the Ideal X, from Newark (New Jersey) to Houston (Texas) carrying 58 containers. McLean worked out that loading cargo the old way cost about USD 5.83 per tonne, while with containers it cost less than USD 0.16 per tonne.

Early containers came in many sizes. In the late 1960s the International Organization for Standardization (ISO) fixed common sizes and fittings, mainly through the standard ISO 668. This standardisation is what let containers spread across the whole world.

How does container shipping work, step by step?

1. An exporter packs goods into an empty container at the factory or at a nearby depot, and customs seals it.
2. A truck or train takes the box to a port.
3. Huge cranes lift the box onto a container ship. Boxes are stacked many layers high, below and above deck.
4. The ship sails on a fixed route with fixed stops, like a bus service. This is called a liner service.
5. At a very large port, the box may be moved to another ship heading to its final country. This is called transshipment.
6. At the destination, the box is unloaded, carried inland and opened at the buyer's premises. The empty box then goes back into use.

The key parts and facts

• Standard sizes (ISO 668): a 20-foot container is about 6.06 m long, 2.44 m (8 ft) wide and 2.59 m (8 ft 6 in) high. A 40-foot container is about 12.19 m long with the same width and height. A "high cube" container is 2.90 m (9 ft 6 in) high.
• TEU and FEU: 20-foot container = 1 TEU. 40-foot container = 1 FEU (Forty-foot Equivalent Unit) = 2 TEUs.
• Weight: a standard 20-foot or 40-foot box is commonly rated for a maximum gross weight (box plus goods) of about 30,480 kg.
• Material: most dry containers are made of a special rust-resisting steel called weathering steel (often sold as Corten steel), with a wooden or bamboo floor and strong steel corner castings at each of the eight corners. Cranes and twist-locks grip the box through these castings.
• Types of containers: dry (general cargo, the most common), reefer (refrigerated, for fruit, medicine, fish), tank (for liquids and chemicals), open-top (for tall goods) and flat rack (for machinery and vehicles).
• Safety approval (CSC): every container used in international trade must meet the International Convention for Safe Containers (CSC), 1972. The United Nations and the International Maritime Organization (IMO) adopted it, and it came into force in 1977. A container that passes its strength tests gets a metal CSC Safety Approval Plate, usually fixed on its left door. Countries that signed the convention accept each other's plates, so an approved box can travel anywhere.
• Ship size: the largest container ships today carry over 24,000 TEUs. As of early 2024, MSC's Irina-class ships held the record at 24,346 TEUs.

Who makes the world's containers?

Container manufacturing is one of the most concentrated industries in the world. Industry estimates say about 95% of the world's containers are made in China. Three Chinese companies, CIMC (China International Marine Containers), Dong Fang and CXIC, made about 82% of global output in recent years, with CIMC alone holding over 40%. This happened because China has cheap steel, very large factories, and is also where most export cargo starts its journey, so empty boxes are needed there first.

India's position and Indian examples

• Ports: India's biggest container ports are Jawaharlal Nehru Port Authority (JNPA) near Mumbai in Maharashtra and Mundra in Gujarat. Vizhinjam in Kerala is India's first deep-water transshipment port; it was formally dedicated to the nation in May 2025. Until now, a large share of India's containers has been transshipped at foreign hubs such as Colombo, Singapore and Jebel Ali (Dubai), which adds time and cost.
• Inland movement: the Container Corporation of India (CONCOR), a Navratna public sector company under the Ministry of Railways, was set up in March 1988 and began operations in November 1989. It runs container trains and inland depots across the country.
• Making containers: India has made very few containers. Most of the boxes used by Indian traders are imported or leased from foreign companies. India's manufacturing capacity was only about 70,000 TEUs a year (as of October 2026).
• Container Manufacturing Promotion Scheme (CMPS): to change this, the Union Cabinet approved the CMPS on 28 October 2026. It was first announced in the Union Budget 2026-27 and is run by the Ministry of Ports, Shipping and Waterways. It has a total outlay (money set aside) of ₹10,000 crore and runs up to 2039-40. Its aim is to raise India's container making capacity about ten times, to about 7.5 lakh TEUs a year. Its main parts are:
• Operational Expenditure Assistance (₹8,891 crore): support for each container that an eligible maker builds to global standards and sells.
• Interest Subvention Assistance (₹859 crore): the government pays 3% a year of the interest on eligible term loans for new or expanded factories.
• Testing and certification (₹150 crore): common testing facilities, so Indian boxes can get their safety approval at home.
• The 2021 shortage lesson: during COVID-19, empty containers piled up in the wrong places and Chinese ports were congested. Indian exporters could not find boxes, and freight rates shot up. Drewry's World Container Index reached about USD 9,818 per 40-foot container in late August 2021, roughly 351% higher than a year earlier. This exposed how much India depends on others for a basic piece of trade equipment.

Commonly confused concepts

• TEU vs number of containers: "100 TEUs" is not the same as "100 containers". 100 TEUs could be 100 twenty-foot boxes or only 50 forty-foot boxes.
• TEU vs tonnes: TEU measures the number and size of boxes, not the weight of goods. Port tonnage (in million tonnes) also counts bulk cargo like coal and crude oil.
• Container ship vs bulk carrier vs tanker: container ships carry boxes; bulk carriers carry loose dry cargo like coal, iron ore and grain; tankers carry liquids like crude oil and LNG.
• Transshipment port vs gateway port: a gateway port serves its own country's trade (cargo starts or ends nearby). A transshipment port mainly moves boxes from one ship to another (for example Singapore, Colombo).
• ICD vs CFS: an Inland Container Depot (ICD) is an inland "dry port" with customs clearance, away from the sea. A Container Freight Station (CFS) is a facility, usually near a port, where cargo is packed into or taken out of containers and cleared by customs.
• Container manufacturing vs container shipping: making the steel boxes is a manufacturing industry. Moving the boxes on ships is a shipping (service) industry. India's Container Manufacturing Promotion Scheme (2026) supports the first, not the second.

Issues, criticism and the way forward

• Cost gap: Chinese makers have huge scale and cheap steel. Indian containers have cost more to make, which is why per-container support is needed to close the gap for some years.
• Steel and parts: a container needs special weathering steel, corner castings, floor wood or bamboo, and marine paint. If these are imported, the gain to India is small. Raising local sourcing is a key goal.
• Demand and leasing: much of the world's container fleet is owned by global shipping lines and leasing firms. Indian factories must win their orders on price and quality.
• Testing and certification: containers must meet strict international safety rules and pass tests before they can sail. India has lacked enough testing facilities, which the scheme is meant to fix.
• Strategic risk: when one country makes almost all the world's containers, any shock (a pandemic, a war, trade sanctions) can choke trade. Many experts argue that some domestic capacity is a form of supply-chain insurance.
• Way forward: experts point to linking container making with port-side land, cheaper finance, domestic steel supply, better ports and transshipment hubs, and India's own container shipping capacity, so that the whole chain grows together.

Concepts to Know

• Containerisation: the system of carrying goods in standard sealed boxes that move easily between ships, trains and trucks.
• Break-bulk cargo: goods loaded piece by piece (sacks, barrels, crates) instead of in containers.
• Liner service: a ship service that runs on a fixed route and timetable, like a bus route at sea.
• Freight rate: the price charged to carry goods, often quoted per container.
• Twist-lock: a metal lock that fits into a container's corner castings to fix it to a ship, truck or another container.
• Navratna: a status given to large, profitable central public sector companies, which gives them more freedom to invest without asking the government each time.
• Interest subvention: the government pays part of the interest on a loan, so the loan becomes cheaper for the borrower. Under the CMPS this is 3% a year.
• Supply-chain resilience: the ability of a country's trade and production system to keep working even when there is a shock somewhere in the world.