A TEU or Twenty-foot Equivalent Unit is an exact unit of measurement used to determine cargo capacity for container ships and terminals.
This measurement is derived from the dimensions of a 20ft standardized shipping container. Because standard containers can be 20 or 40ft in length the capacity of a container ship can depend on the ratio of the two sizes.
In order to avoid confusion and standardize a ship’s capacity, the number of containers a ship can load is translated into a number of 20ft containers and that measurement is known as TEU. For example, one forty foot container is two TEUs.
What is TEU used for?
Understanding how TEU’s work is important because when shipping companies give rate calculations they do it per TEU. So, when you receive a rate calculation from a company make sure you multiply it by how many TEUs your shipment consists of, not just how many containers you are shipping.
TEU is also used in reporting the capacity of container ships and terminals. Additionally, metrics about port throughput are often reported in the amount of TEUs.