Bulk containers pose awkward problems for Third World exporters

In the past 20 years use of shipping containers has radically reshaped transport of goods by rail, road, and sea. If revolution is too strong a term to describe this development, evolution is not.

These "sealed boxes" were first used by the US army in the early 1960s and then adopted by all western countries. Within a decade the containerization idea had spread worldwide, challenging many developing countries, such as African coastal states, to adapt to the new system. An initial, but only partial, response to the innumerable problems posed by containerization was the refurbishing of a few West African ports, such as Cotonou, Lomé, and Abidjan, that had been built in colonial times. A much broader campaign of reorganization will involve shipping agents, vessel owners, port directors, insurance companies, and warehousing concerns. Evidence of the seriousness with which the new technology is regarded was revealed in a symposium on containerization earlier this year organized jointly by the ports of Abidjan and Rouen and held in Abidjan. More than 600 transportation specialists from Europe, the United States, Brazil, and 35 African countries participated.

"The question", says Rainer Vogel of UNCTAD's Transport Division, "is no longer whether or not to accept the system, but one of knowing how to make use of it."

The basic advantage of the system is that it provides for secure and rational transport of goods from the place of manufacture to the importer's warehouses. Containers were, however, conceived in response to the specific needs of exporters of manufactured goods in the industrialized North. For exporters of raw materials in the South, the new technology often creates more problems than it solves. "We are confronted," Ivory Coast's Minister for Marine Affairs, Lamine Fadika, told symposium participants, "with the necessity of adapting the container to its contents."

Traditional trade contracts for such diverse products as coffee, minerals, vegetable oils, and rubber must be redefined to take account of the transport capacities of containers. For example, African rubber, in contrast to practices in the Far East, is invoiced on the basis of rates that vary according to destination rather than by the container. The unit is the value of the merchandise before containerization. In the Far East, a fixed shipping rate was adopted independently of the fact that the container may be loaded with 16, 19, or 24 tons. Moreover, while traditional containers are suited to transport coffee over short distances where there are no significant changes in temperature or humidity, on long sea voyages some varieties, such as Arabica, require - at least in the opinion of importers - ventilated containers whose costs of manufacture and maintenance are 25 to 30 per cent above those of the traditional container. Thus, if new techniques of shipping in bulk containers under an inert gas are required to achieve even better results in preserving the freshness of coffee beans, costs to shippers could practically eliminate savings achieved elsewhere.

The new containers also demand, on the part of the exporter, modification of packing and shipping methods. Satellite or "upstream" occupations and technologies, such as fork lift equipment and trucks, are also being transformed. What is to become, for example, of workers who make the sacks or bag the coffee, once bulk containerization has been adopted?

Beyond the initial restructuring of the principal West African ports, which in any case has not been sufficient to avoid overcrowding of facilities, any gains accruing to exporters are dependent on the introduction of a much more complete transformation of the transportation infrastructure to permit more effective use of containers. Suitable roads and storage areas are needed, as are terminals equipped for loading and unloading. The whole logistic network, including trucks, freight cars and barges, need to be standardized to match the dimensions of the sealed containers. These costly undertakings (Abidjan's new sea terminal will cost 12.5 billion CFA francs}will need to be matched at the bureaucratic level with an effort to coordinate and speed up customs formalities to provide for smoother movement of merchandise. Also required is more research on the type of training programmes designed for personnel who will, be using the new technology one way or another.

Although bulk containers, designed with a view to optimizing the amount of merchandise that can be transported, have proven ideal for large plants, it remains to be seen whether they can be utilized as efficiently by the myriad of small production units scattered throughout some of the most remote and inaccessible areas of Africa. Such enterprises are confronted by high rental costs, delays resulting from maintenance operations and the need to accumulate sufficient stock to justify the use of containers. The only possible solution appears to be that of group or cooperative efforts by small producers.

On a broader scale, this also appears to be the route that African states themselves will be obliged to follow. Regional or sub-regional cooperation offers not only the possibility of confronting the new logic of economies of scale and time, but also of ensuring the survival of merchant fleets threatened by the introduction of containerization.

Such alliances are needed first of all for the development of African products, especially those of the landlocked countries. Mali, for example, needs to find some way to move 6 000 tons of mangoes to European markets and cannot rely on air transport for this purpose. Niger and Upper Volta face similar problems. For these countries, the container, in spite of the costs involved, could represent an extremely valuable solution if developed in the framework of regional cooperation with coastal states.

"A developing country cannot cope with new technology by itself," says Rainer Vogel of UNCTAD," and in the case of West African countries the annual volume of their trade neither requires nor justifies such investments. Some Asian countries can use up to 500 000 containers a year, but the average in Africa ranges between 30 000 and 50 000 and a country like Mauritania, to cite only one case, uses less than 1 000. If these countries do not organize among themselves they will become dependent on large multinational firms."

The adoption in 1974, under auspices of UNCTAD, of a code of conduct for Ocean Shipping Conferences provided a base upon which developing countries were able to establish national and regional policies for the creation of mercantile fleets. Today, however, bulk containers pose a new threat of marginalization for African countries. Modern cargo vessels, designed to match the new technology, have allowed European ship-owners to become more efficient and reliable, but African countries have not been able to exploit the new technology on a national basis. For Lamine Fadika, the Ivory Coast's noted leader in the shipping world, the solution for West Africa would begin with the coordination and rotation of investments among the fleets of different coastal states in the region: Ivory Coast, Cameroon, Senegal, and Nigeria. UNCTAD has conducted several studies on technological changes and at present a recommendation has been made for the development of a combined shipping and harbour technology with a view to restructuring fleets to include large freighters as well as smaller vessels. These fleets would be designed to correspond to the needs of the region and would be capable of accepting containers as well as traditional shipments which continue to represent an important part of maritime transport.

But if West Africa is taking major steps toward integrating container technology in the region's fleets, the are some signals that would counsel prudence. Massive investments by western countries over the past 15 years have resulted in an over-capacity not only in containers (there are presently a million of these not being used) but also in shipping. Reduced freight rates make the profitability of shipping a chancy proposition. Between the peril of technological dependence and that of over-investment, West Africa's margin for maneuvering, in spite of all efforts, will remain narrow for years to come