As one of the main pillars of global trade, maritime shipping, accounts for approximately 80% of goods shipped today. In 2020, over 200 countries had ports open to container ships, generating record global container port volumes of ~800 million containers. These ports measure the volume of containers they handle in twenty-foot equivalent units (TEUs).
As an importer or exporter, it’s essential to understand the ins and outs of container shipping. This knowledge ensures that you know the correct terms and, most importantly, complete the correct paperwork. As you’ve probably guessed by now, one of the more commonly used shipping terms is “TEU.” But what is a TEU, and what do you need to know about it? Read on to learn what TEU means and why it’s important.
The acronym TEU stands for Twenty-foot Equivalent Unit. A TEU is a shipping container with internal dimensions that measure approximately 20-feet long, 8-feet wide, and 8-feet tall. Whether you’re using EUR-pallets or standard pallets, expect between 9 and 11 pallets to fit in a TEU. The term TEU is widely used throughout the shipping industry as a general measurement.
History of TEU
In the early days of shipping, loading and unloading cargo was tedious and time-consuming because it involved unloading or packing shipping vessels item by item. Cargo was loaded sacks, barrels, crates —amphorae, but there wasn’t a well-defined, space-efficient system in place.
In the 1950s, Malcolm McLean came up with a solution by creating standardized containers to hold cargo. He then purchased an oil tanker and redesigned it to hold 58 containers. The first shipment using his system took place in 1956.
Containers have been modified since then to the standard sizes used today. This standardization ensures the efficient loading of vessels and eliminates discrepancies between shipping companies.
Why is TEU Important?
Today, TEU is often used to determine cargo capacity on shipping vessels. It is commonly used to calculate containers per port activity.
Calculating Port Activity
There are many units used to calculate port activity. Calculations include measuring square miles/kilometers, and the value of cargo handled every year. However, they don’t always accurately measure a port’s capacity and efficiency.
TEU provides a clearer picture by measuring port activity in terms of capacity and throughput. Globally, TEU is considered the standard unit of measurement.
Gauging the capacity of various ports around the world in TEUs provides a standardized frame of reference. The most active ports in the US handle over 16 million TEUs a year. That’s an average of about 1.4 million TEUs per month. The busiest ports in China, Shenzhen and Shanghai, handle more than 65 million TEUs a year or approximately 5.4 million TEUs every month.
Calculating Vessel Size and Capacity
There are various categories of vessels based on size and TEU capacity. The largest ships have a carrying capacity of 14,000 TEUs. The smallest ones are closer to 1,000 TEUs.
Knowing Your TEUs
“What is a TEU?” is an essential question. Companies that import or export or plan to enter the international marketplace should understand this term clearly. Dedola Global Logistics can help you with all your shipping needs. We have been providing freight management solutions since 1976. We serve over 100 industries and 20,000 customers, catering to all logistical needs, common or customized. Our mission is to optimize your supply chain with industry-leading customer service. We provide unparalleled access to logistics expertise so that you can achieve the results you want at the right price.
Reach out to our team today and experience what unbeatable service feels like in the logistics world.