TEU, FEU and the container – the dimensions that run world trade

This is the script, written before recording. The text below is what gets said, and the lines in italics are production cues – they are not read aloud. Once the episode is recorded, this text is replaced by what was actually said.

Length: allow roughly 12–14 minutes at a calm pace.

The opening

(Straight in. No long intro – the same opening as the barcode episode.)

You have heard the number. The largest container ships carry 24,000 TEU.

And people assume that means 24,000 containers.

It does not. It is closer to 13,500.

Today we are going to look at why – at what a TEU actually counts, at what is written on the side of a container, and at why the agreement about the box mattered more than the box itself.

A TEU is a counting unit

(Graphic: the TEU definition. Leave it up until after “not a list”.)

TEU stands for twenty-foot equivalent unit. A twenty-foot container, converted into a counting unit.

The reason it exists is simple: containers come in several lengths. If you want to state how much a ship can carry, you need one common unit rather than a list.

So: a twenty-footer is one TEU. A forty-footer is two.

And you can already see where this goes wrong. “24,000 TEU” is not a number of boxes. If half the slots are filled with forty-footers, the number of boxes is far lower than the figure suggests.

FEU is the same logic for the forty-footer – forty-foot equivalent unit. One FEU is two TEU. In practice FEU is used mostly in pricing, while TEU is used for capacity.

(You can mention the calculator here, but save the main point for the end.)

And here is what surprises people: even though everything is counted in twenty-foot units, the forty-footer is the common container. You do not pay double for double the length, because much of the cost sits with handling one unit – one lift, one slot, one document.

The height that is not in the name

(Graphic: the table of the four types, with the TEU column.)

The names tell you length. They say nothing about height, and that is where a practical trap sits.

A twenty-foot standard is the base unit – one TEU. A forty-foot standard is double the length, same height – two TEU. A forty-foot high cube is the same again, but a foot taller. More volume, same floor area – and still two TEU. A forty-five foot high cube is longer still, used quite a bit in Europe, and is usually also counted as two.

(Point at the right-hand column as you say this.)

Look at that last column. A high cube gives you more volume, but still counts as two TEU. That is one reason a TEU figure is a blunt measure: two ships with the same TEU capacity can carry different amounts of goods, depending on what kind of boxes are actually there.

Alongside the dry boxes there are types for cargo that does not fit in a closed case. A reefer has its own refrigeration unit. An open top is for cargo that has to be lifted in from above. A flat rack for anything too wide or too tall. And a tank for liquids.

They all use the same outer dimensions at the corners. That is the whole point – they can be handled by the same equipment.

The number on the side

(Graphic: the four parts of the container number, built up piece by piece. If you have a photo of a real container, put it in here.)

Every container has a unique number, and it is built to a standard called ISO 6346. Eleven characters, and each part has a job.

First, three letters – the owner code. It identifies the owner or principal operator, and the codes are registered with BIC, which has kept that register since 1970.

Then one letter – the equipment category. U for freight containers, J for detachable equipment, Z for trailers and chassis.

Then six digits – the serial number. The owner chooses that one.

And finally one check digit, calculated from the preceding ten, which catches misreadings and typing errors.

(If you have seen the barcode episode, you recognise this – say so.)

If this reminds you of the GS1 episode, that is no accident. The principle is exactly the same: an issuer hands out a prefix, the owner fills in the rest, and a check digit at the end lets the systems catch typing errors. The calculation for containers is a different one from GS1, and is specified in ISO 6346.

Below the number there is often a size and type code of four characters. The first says something about length, the second about height, and the last two about what kind of container it is. That is the code a terminal system reads to know whether the box is a dry forty-foot high cube or a reefer.

Weight or volume

(Graphic: cube out versus weigh out, side by side. This is the most practical part – take your time here.)

This is the part that matters to anyone who has ever ordered a container.

There are two ways to run out.

The first is called cube out. The container is full, but you are well under the weight limit. Typically light, bulky cargo: pillows, packaging, plastics. Here height pays off – a high cube gives you more for the same lift.

The second is called weigh out. You hit the weight limit while the container is still half empty. Typically heavy and compact: liquids, metal, stone, machine parts. Here the twenty-footer is often the right choice.

And this explains why heavy cargo often goes in twenty-footers while light cargo goes in forty-footers: the length is no use to you if you hit the weight limit first. An experienced forwarder knows which of the two binds before the container is even booked.

One more thing worth having: the weight limits are not only about what the container can take. They also depend on what the cranes, the chassis and the road network can take at both ends – and road weight is a national rule, not an international one.

Why the standard mattered more than the box

(Graphic: before and after – break bulk versus container.)

And now the real point, which is the same as in the barcode episode.

Before the container, everything was handled separately. Sacks, crates and barrels loaded one at a time. Many hands per tonne. Long time sitting in port. Loss and damage along the way.

Afterwards, everything is handled the same way. One box, one lift, whatever is inside. The same corner castings all over the world. Ships, trains and trucks using the same unit. Sealed from sender to receiver.

(This is the episode’s most important sentence. Say it slowly.)

A steel box is not an invention anyone can patent. What was valuable was the agreement – that the corners sit in exactly the same place on every single container in the world, so that any spreader fits.

Without that agreement, a container is just an expensive crate.

Summing up

(Graphic: the points as they are listed.)

Five things to take with you.

That a TEU is a counting unit and not a container, and that a TEU figure therefore says less than it appears to.

That the forty-footer is the common one, and that the price is not double a twenty-footer.

That a high cube gives you volume, not more TEU.

That the number on the side is an owner code, a serial number and a check digit – the same idea as in the barcode.

And that you either run out of space or out of weight, and that this decides which box you should order.

The ending

(This is where the calculator comes in. It is the reason to send people to the site.)

If you want to see the number from the start of the episode with your own figures, there is a calculator on sporretimen.no. You enter a mix of twenty- and forty-footers, and it shows you how many TEU that comes to – and how many boxes.

Turn up the share of forty-footers and watch what happens. The TEU figure holds still. The number of boxes falls.

That is the whole reason a ship rated at 24,000 TEU never has 24,000 containers on board.

(End card.)