Logistics Terms What are the Differences? TEU vs FEU

In international maritime transport, container vessels are used most of the time. To better operate them efficiently and mitigate limitations of modes of transportation, TEU (Twenty-foot Equivalent Unit) and FEU (Forty-foot Equivalent Unit) are used as standard units to measure container capacity, and vessel and terminal handling capacity.

International Maritime Organization (IMO) created the standard and global major ports and ocean carriers comply with them. In the international ocean shipping industry, the TEU and FEU standards play a crucial role in cargo transport efficiency and global supply chain management. They are expected to contribute to the digitization and automation of ocean logistics through continuous advancement moving forward.

TEU is a Twenty-foot Equivalent Unit whereas FEU is a Forty-foot Equivalent Unit. These two units represent specification and size and are used as key indicators to determine cargo volume and transport capacity. They are the most commonly used container units.

TEU is suitable for transporting mainly small cargo, whereas FEU is for large volume or heavy cargo. With the continued growth of global trade, cargo transportation has become the foundation for transporting goods across countries. An efficient and cost-effective cargo transport system is essential in boosting the competitiveness of companies and national economic development.

Accordingly, port and logistics companies are utilizing the two units by establishing efficient cargo handling and vessel operation plans.

The dimensions of TEU are 20ft long (approximately 6 m) and width and height of 8ft respectively (around 2.4 m). It can load about 9 to 11 pallets. The payload of TEU is 48,600 lbs and internal dimensions measure about 19.4ft long, 7.8ft wide, and 7.9ft tall.

A FEU is 40ft long (approximately 12 m), has twice the volume of a TEU, and can carry approximately 20 to 24 pallets. The FEU has a payload of 80,350 lbs, an internal length of 39ft, a width of 7.8ft, and a height of 7.9 ft. It has gained popularity recently because it can be towed by a semi-trailer truck.

A 40HQ (40 High Cube) container is 40ft (approximately 12.19m), 8ft wide, and 9.5ft tall. Compared to 40ft, 40HQ, which has the same length and width but a higher height, is suitable for transporting large cargo. It is mainly used for transporting furniture and large items, electronics, industrial equipment, agriculture, and consumer goods.

In addition, there are 48-foot and 53-foot containers, which are large cargo shipping containers mainly used in North America. It is a trailer-type container designed for inland and rail transportation and plays a critical role in increasing cargo transportation efficiency.

A 48-foot container is 8.5ft wide and 9.5ft high. It is longer than existing 40-foot containers, so it can load more cargo and is mainly used in inland transportation (trucks and railroads).

A 53-foot container is 8.5ft wide and 9.5ft high. It is the largest standard container in North America and has the same width and height as a 48-foot container, but is 5ft longer and can carry more cargo.

Advantages

It is more flexible in terms of cargo handling because it doesn’t need separate infrastructure. Therefore, it can be easily transported by various modes of transportation such as truck, train, and vessel.

The required space is smaller and freight rates are lower than FEU as it can be widely used.

Most ports are well-equipped with container handling facilities suitable for TEU containers, making them easily accessible.

Disadvantages

TEU has less capacity than FEU so it is not suitable for large volumes of cargo.

As it has less capacity than FEU, transportation of cargo using TEU can be less cost-effective.

The size of TEU is smaller so it has more throughput at ports, which means that it takes longer to load and unload.

Advantages

FEU has about twice the cargo capacity of TEU so it can transport large volumes of cargo efficiently.

In the case of large-sized cargo, FEU is more cost-effective.

The size of FEU is larger so cargo can be loaded efficiently.

Disadvantages

In general, FEU costs more than TEU. Depending on sizes of cargo and weights, higher commissions and rates can be imposed at ports and terminals.

Many ports and terminals are not equipped with infrastructure and equipment that can handle FEU, so it has limited access.

1) Loading
The size of the vessel and container loading capacity are important factors when establishing logistics planning because transportation cost efficiency varies depending on loading capacity.

Larger ships can carry more TEU and FEU containers, effectively reducing transportation costs per unit. For example, a 20,000 TEU ultra-large container ship can considerably reduce transportation costs compared to a 5,000 TEU ship.

However, large vessels have limited ports to berth so there are restrictions when designing logistics networks. On the other hand, small and medium-sized vessels can berth at most ports, allowing more flexible operation.
In addition, since the loading efficiency of TEU and FEU containers varies depending on the spacing of Twin Stay, a loading and unloading support device, the optimal configuration must be considered according to the characteristics of the cargo.

For example, FEU is more efficient when transporting cars or large machinery but TEU is more suitable for transporting small volumes of cargo. Therefore, shippers and transportation companies must comprehensively take into account various factors such as cargo characteristics, transportation distance, and vessel size to determine the optimal configuration of TEU and FEU. This approach allows you to reduce transportation costs and improve efficiency simultaneously.

2) Freight
Freights of TEU and FEU are decided according to sizes and weights. As TEU (20ft) is smaller and less heavy than FEU (40ft), their freights are lower. However, when calculating actual costs, diverse factors like distance, transportation modes, types of cargo, etc. are considered.

Most transportation companies set basic rates based on a unit of TEU and the rate for FEU is approximately 1.5 times higher. For instance, if the rate for TEU is $2,000, the one for FEU would be $3,000 to $4,000.

In terms of transportation distance, rates are determined by miles or segments. The longer the distance is, the lower the cost will be. In addition, rates by modes vary, generally making ocean transportation less costly than inland transportation. Additional charges could be imposed when it comes to special – dangerous or refrigerated – cargo.

After all, freights of TEU and FEU are calculated using various variants, and carriers provide final rates by considering those comprehensively. Shippers can cut costs by selecting optimal transportation modes matching the characteristics of their cargo.

3) Distance
Globally renowned carriers have their policies for utilizing TEU and FEU.
Particularly, distance could be a standard for rate changes. Company A, for example, uses TEU for smaller cargo and FEU for larger cargo. The company follows its policy of consisting of 35% of its total volume with TEU and 65% with FEU. Accordingly, the company adjusts the ratio of TEU and FEU based on transportation distances. It uses FEU more often for longer journeys while TEU for shorter distances, improving space management and efficiency.

Company B makes use of TEU and FEU based on types of cargo and distances. Special cargo, such as refrigerated or hazardous cargo are mostly contained in FEU. On the other hand, for general dry cargo, the company appropriately distributes proportions of TEU and FEU. As such, transportation companies enhance cargo shipping efficiency with the right strategies for TEU and FEU.

Distance: TEU would be suitable for short distances while FEU would be more efficient for long-distance, larger cargo.

Cargo Types: TEU would be better for a small amount of dry cargo or box/palletized cargo. But for larger and heavier cargo, FEU could be a better choice. Special cargo like frozen/refrigerated or dangerous goods are mostly shipped in FEU. It is indispensable to select the right size of containers for the safety of cargo.

Destination: TEU has an advantage when delivering cargo inland, but FEU is more efficient when unloading large amounts of cargo at a port.

Transportation Cost: The base rate for TEU is lower but FEU would be more cost-effective per unit in long-distance transportation of large cargo. Optimizing the space of containers and choosing appropriate containers is essential for efficient transportation.

Policies of Carriers: Some companies change the ratio of TEU and FEU depending on distance and types of cargo.

To conclude, making the optimal choice among TEU and FEU after reflecting on diverse aspects, including the type, usage, distance, destination, freight, etc. is crucial.

Going forward, the cargo transportation industry will further develop standards for TEU and FEU and is forecasted to accomplish digitization and automation of container transportation. An integrated logistics management system will be established to optimize transportation and manage global supply chains.
Moreover, the industry will make an effort to cut down on carbon emissions by introducing green transportation modes and operational methods. Carriers are expected to come up with innovative services for customer convenience and efficiency of transportation.

As TEU and FEU have pros and cons, users need to utilize those according to the types of cargo and transportation conditions. TEU is flexible and accessible to ports while capacity is limited and less cost-effective when transporting large volumes. In contrast, FEU has advantages in long-distance, large cargo transportation, but freights are higher and might not be able to be handled at some ports.

Thus, it would be desirable for small and short-distance cargo to choose TEU, and for large and long-distance cargo to opt for FEU. Efficiency would improve while using an appropriate mix of TEU and FEU by taking types of cargo and distances into account. As an example, some cargo could be transported by TEU for a short distance and transferred to FEU when other mass cargo is added. Likewise, we could anticipate more efficient logistics coming with the advancement of technologies and automation.

TEU is more suitable for a small volume of cargo and are easier to handle. Therefore, they are more appropriate for short-distance shipment compared to FEU shipping relatively large volumes of cargo.

TEU is versatile with less space and better accessibility to most ports and terminals. The total rates are lower than FEU.

FEU is 40 ft long (12.2 meters) * 8 ft wide (2.4 meters) * 6 ft tall (2.5 meters), so those ships can load cargo more efficiently.
These ships are not only spacious but also less expensive.

FEU is twice the size of TEU, therefore it is able to ship larger cargo, making it easier to transport vehicles, machinery, hazardous goods, and special cargo.