Depending on the airline involved, domestic flights may not use cargo containers for luggage but international flights generally do. There are two logistical purposes for using the containers. First, packing individual bags into shaped containers saves space because the containers are designed to fit the internal dimensions of the aircraft cargo hold compartment. Second, the use of containers makes moving luggage around much easier than transporting luggage piece by piece, in addition to being less hard on the bags. Once the luggage containers are filled, they are transported by specialized vehicles and conveyed along a belt loading truck into the cargo hold.

Security Precautions:

There is also a third purpose for using cargo containers within the cargo hold areas: security against terrorism. Specifically, the cargo holds are designed to contain the destructive force of explosive blasts such as where a bomb inside luggage is not detected by other security processes. This is especially important in international flights because of the vast overseas distances involved and the reduced likelihood that a damaged aircraft will remain airworthy until an emergency landing is possible. By enclosing luggage inside reinforced containers, the effects of a bomb blast can be confined to the container...

The primary mechanism for accomplishing this task is the manner in which the luggage is separated at the departure airport so that any luggage requiring transfer to connecting flights is presorted for that purpose. In the event individual pieces of luggage are misdirected, the barcodes placed on the original luggage tags allows baggage handlers to scan them instantaneously with hand-held scanners to identify the proper final destination for every piece of luggage.
At the destination airport, baggage is offloaded and directed to the luggage retrieval areas designated for each specific flight so that passengers can retrieve their luggage as quickly and efficiently as possible. Some airports employ personnel to check passengers departing the luggage retrieval areas to confirm that the luggage in their possession matches their ticket stubs, but these precautions are not uniform and are frequently enforced only haphazardly even in airports where they are part of security procedures.