An exact unit of measurement used to determine cargo capacity for container ships and terminals. It is derived from the dimensions of a 20-foot standardized shipping container which is 20 feet (6.1 m) long, 8 feet (2.4 m) wide, and 8 feet (2.4 m) high.
Since standard containers come in 20-foot and 40-foot sizes, a ship’s total capacity depends on the mix of these containers. To simplify calculations, ship capacity is expressed in TEUs, where one 40-foot container equals two TEUs.
Why Is TEU Important?
TEU is essential for rate calculations in shipping. When companies provide freight rates, they typically charge per TEU, not per container. This means you must multiply the given rate by the number of TEUs in your shipment to get an accurate cost estimate.
Beyond pricing, TEU is also used to measure the capacity of container ships, port terminals, and overall port throughput. This standardized unit helps ensure consistency in global trade and logistics.