I’m going to take a step away from being a discouraged news junkie this week and marvel at one of the world’s most underappreciated inventions: the humble shipping container, those ugly, stenciled and frequently rusty steel boxes we see perched on trucks, trains and ships everywhere. Their beauty won’t be found in their appearance, that’s for sure. But we will find it in what they accomplish and what they prevent.
Standard shipping containers, more formally known as intermodal containers, are eight feet wide, come in two standard heights and are either 20 or 40 feet long, give or take a few specialized container sizes1. They’re built to last over a decade and approximately 90% of them are manufactured in China. There are even small communities2 made of upfitted steel boxes.
Thanks to that standardization, cargo doesn’t need to be repeatedly loaded and unloaded as goods make their ways from factories to ports, ships, trucks and trains. All shippers need to do is load up a box once and send it on its merry way. Cargo ships reaching lengths of up to 1,312 feet can transport as many as 21,000 20-foot boxes in one trip, reducing the cost of transport. Cranes at ports load and unload at breakneck speeds. Freight brokers rapidly negotiate the best rates between shippers and transportation companies with excess capacity.
All of this has evolved very quickly. The standard system shippers rely upon today has only been in place since approximately 1970 and demand continues to increase. Our own Port Manatee just received approval to double its container yard capacity in late July.
Lest you think I’m a logistics nut—not that there’s anything wrong with that—I’m fascinated by these containers because they are yet another example of societal progress. Thanks to those unsightly steel boxes, companies can sell us the goods we want at lower prices. Products we might never get access to because of transportation costs can be found in dollar stores everywhere. Seas aren’t jammed with thousands of industrial ships serving an infinite variety of cargo. There’s an active market for new and used containers, allowing them to be put to their most efficient use.
Now, back to investing. Netflix, Amazon, Samsung, Apple and Google are all innovators. But innovation happens everywhere and all the time, whether we’re discussing selling cars in an economic expansion or travel in a global pandemic. We need to remain observant. There are profits to be found from looking at what’s happening in the warehouses instead of merely the websites. All those iPhones, big screen monitors and N95 masks need to get to their destinations somehow. The firm that finds a way to move a container five percent cheaper than its competitors might see its profits quadruple. This, obviously, isn’t confined to shipping containers. The most mundane of businesses can surprise us with the most exciting profitability figures.
There’s every reason to become more disengaged with this infected and angry society we’re in at the moment, but there’s equally reasons to retain that fascination, determination and optimism that will fuel yet another expansion, sooner or later.
Evan R. Guido is the Founder of Aksala Wealth Advisors LLC, a 2018 Forbes Next-Gen Advisors List Member, and Financial Professional at Avantax Investment ServicesSM. Evan heads a team of retirement transition strategists for clients who consider themselves the “Millionaire Next Door.” He can be reached at 941-500-5122 or firstname.lastname@example.org. Read more of his insights at https://finance.heraldtribune.com/category/ask-guido/. Securities offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM, Insurance services offered through an Avantax affiliated insurance agency. 8225 Natures Way Suite 119, Lakewood Ranch, FL 34202. The views and opinions presented in this article are those of Evan R. Guido and not of Avantax Wealth ManagementSM or its subsidiaries.