Containerization:Facilitating Globalization And China’s Foreign Trade

In the past55years, containers have transformed surface freight transportation worldwide. Containers have greatly reduced the cost and time required to pack and move cargoes, have made intermodal transportation possible, and have supported the growth of new patterns of global production and distribution. However, this technological invention has escaped previous literature on the causes of globalization and, the relationship between transportation costs and trade. This paper attempts to fill the gap by outlining how containerization fits into the development of maritime transportation since its introduction in the late1950s, and analyzing the relationship between container transportation costs and international trade.Since the introduction of containerization, international trade has grown tremendously, particularly in manufacturing goods and intermediate goods. Hence, this paper will examine how containerization facilitates the global supply chain and subsequently, its impact on international trade. To support this concept, this paper will also look into the relationship between transportation costs and trade through a simple correlation analysis on the3major liner routes:transpacific, transatlantic and China-Europe. In addition, a simple linear regression analysis is also performed to understand the underlying factors that affect container freight rates.