The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (2 page)

C
ontainer shipping
is not ancient history, but much relatively recent source material proved surprisingly difficult to locate. Many relevant corporate records have been destroyed. The early growth of containerization was nurtured by the Port of New York Authority (now the Port Authority of New York and New Jersey), but many of that agency’s records were destroyed in the terrorist attacks on the World Trade Center on September 11, 2001. That this book came to be is a tribute to the work of the many dedicated archivists and librarians who helped me identify extant materials in collections that researchers rarely look at, as well as to private individuals who combed their own files for important records.

Back in the early 1990s, when I first thought of writing about Malcom McLean, George Stevenson of the North Carolina State Archives came up with hard-to-find material about the McLean family. When I decided to revisit containerization more recently, Kenneth Cobb of the New York Municipal Archives, Doug DiCarlo of the LaGuardia and Wagner Archives at LaGuardia Community College in New York, and Bette M. Epstein of the New Jersey State Archives in Trenton helped me piece together the story of how the container decimated New York’s port.

The lack of historical material on the International Longshoremen’s Association is a serious impediment to historical work on longshore labor relations. Gail Malmgreen of the Robert F. Wagner Labor Archives at New York University helped me locate documents and oral histories in that remarkable collection. Patrizia Sione and Melissa Holland of the Kheel Center, Catherwood Library, at the Cornell University School of Industrial and Labor Relations, guided me through the papers of Vernon Jensen, which contain a wealth of detail on the ILA.

Military history is not my field, but my efforts to learn about the role of container shipping in the Vietnam War benefited from much expert guidance. Gina Akers and Wade Wyckoff of the Operational Archives Branch of the Naval Historical Center, in Washington, helped me with the records of the Military Sea Transportation Service and with the U.S. Navy’s extensive collection of oral histories. Jeannine Swift and Rich Boylan, of the Modern Military Records division of the National Archives in College Park, Maryland, went to great lengths to locate little-used material on Vietnam-era logistics. William Moye, of the U.S. Army Materiel Command Historical Office at Fort Belvoir, Virginia, furnished important information on General Frank S. Besson Jr., who persuaded the U.S. armed forces to embrace containerization.

Roger Horowitz and Christopher T. Baer, of the Hagley Museum and Library in Wilmington, Delaware, suggested files I would never have thought to investigate in the archives of the Penn Central railroad. Beth Posner of the City University of New York Graduate Center located much obscure material for me. I also drew on resources from the Bancroft Library of the University of California at Berkeley, the Library of Congress, the Cornell University library system, the New York Public Library, and the Seattle Public Library, and I wish to record my appreciation for their assistance.

The oral histories prepared for the Smithsonian by Arthur Donovan, professor emeritus at the U.S. Merchant Marine Academy, and the late Andrew Gibson are an important source for any researcher on this subject, and Professor Donovan also pointed me to records on container standards. Marilyn Sandifur, Midori Tabata, Jerome Battle, and Mike Beritzhoff of the Port of Oakland were kind enough to guide me around the port and bring my knowledge of terminal management up to date. I owe a particular debt to Jim Doig, who allowed me to use material (now in the New Jersey State Archives) that he compiled in preparing his masterful book on the Port of New York Authority, and to Les Harlander, whose files on the negotiation of container standards are the major source for
chapter 7
.

A number of people read portions of the manuscript, caught embarrassing errors, pointed me to additional sources, and provided valuable comments. I especially wish to thank Jim Doig, Joshua Freeman, Vincent Grey, Les Harlander, Thomas Kessner, Nelson Lichtenstein, Kathleen McCarthy, Bruce Nelson, and Judith Stein. The material in
chapter 5
was presented to the Business History Conference, several of whose members provided insights and suggestions. Portions of
chapter 5
appeared in
Business History Review
,whose anonymous referees made extremely helpful suggestions, and the referees who reviewed the manuscript for Princeton University Press did much to improve it. I would also like to thank my editors at Princeton University Press, Lauren Lepow, who did a superb job of copyediting, and Tim Sullivan, who enthusiastically shared my vision of this book and my belief that the container really did change the world.

August 2005

O
n April 26, 1956
, a crane lifted fifty-eight aluminum truck bodies aboard an aging tanker ship moored in Newark, New Jersey. Five days later, the
Ideal-X
sailed into Houston, where fifty-eight trucks waited to take on the metal boxes and haul them to their destinations. Such was the beginning of a revolution.

Decades later, when enormous trailer trucks rule the highways and trains hauling nothing but stacks of boxes rumble through the night, it is hard to fathom just how much the container has changed the world. In 1956, China was not the world’s workshop. It was not routine for shoppers to find Brazilian shoes and Mexican vacuum cleaners in stores in the middle of Kansas. Japanese families did not eat beef from cattle raised in Wyoming, and French clothing designers did not have their exclusive apparel cut and sewn in Turkey or Vietnam. Before the container, transporting goods was expensive—so expensive that it did not pay to ship many things halfway across the country, much less halfway around the world.

What is it about the container that is so important? Surely not the thing itself. A soulless aluminum or steel box held together with welds and rivets, with a wooden floor and two enormous doors at one end: the standard container has all the romance of a tin can. The value of this utilitarian object lies not in what it is, but in how it is used. The container is at the core of a highly automated system for moving goods from anywhere, to anywhere, with a minimum of cost and complication on the way.

The container made shipping cheap, and by doing so changed the shape of the world economy. The armies of ill-paid, ill-treated workers who once made their livings loading and unloading ships in every port are no more, their tight-knit waterfront communities now just memories. Cities that had been centers of maritime commerce for centuries, such as New York and Liverpool, saw their waterfronts decline with startling speed, unsuited to the container trade or simply unneeded, and the manufacturers that endured high costs and antiquated urban plants in order to be near their suppliers and their customers have long since moved away. Venerable ship lines with century-old pedigrees were crushed by the enormous cost of adapting to container shipping. Merchant mariners, who had shipped out to see the world, had their traditional days-long shore leave in exotic harbors replaced by a few hours ashore at a remote parking lot for containers, their vessel ready to weigh anchor the instant the high-speed cranes finished putting huge metal boxes off and on the ship.

Even as it helped destroy the old economy, the container helped build a new one. Sleepy harbors such as Busan and Seattle moved into the front ranks of the world’s ports, and massive new ports were built in places like Felixstowe, in England, and Tanjung Pelepas, in Malaysia, where none had been before. Small towns, distant from the great population centers, could take advantage of their cheap land and low wages to entice factories freed from the need to be near a port to enjoy cheap transportation. Sprawling industrial complexes where armies of thousands manufactured products from start to finish gave way to smaller, more specialized plants that shipped components and half-finished goods to one another in ever lengthening supply chains. Poor countries, desperate to climb the rungs of the ladder of economic development, could realistically dream of becoming suppliers to wealthy countries far away. Huge industrial complexes mushroomed in places like Los Angeles and Hong Kong, only because the cost of bringing raw materials in and sending finished goods out had dropped like a stone.
¹

This new economic geography allowed firms whose ambitions had been purely domestic to become international companies, exporting their products almost as effortlessly as selling them nearby. If they did, though, they soon discovered that cheaper shipping benefited manufacturers in Thailand or Italy just as much. Those who had no wish to go international, who sought only to serve their local clientele, learned that they had no choice: like it or not, they were competing globally because the global market was coming to them. Shipping costs no longer offered shelter to high-cost producers whose great advantage was physical proximity to their customers; even with customs duties and time delays, factories in Malaysia could deliver blouses to Macy’s in Herald Square more cheaply than could blouse manufacturers in the nearby lofts of New York’s garment district. Multinational manufacturers—companies with plants in different countries—transformed themselves into international manufacturers, integrating once isolated factories into networks so that they could choose the cheapest location in which to make a particular item, yet still shift production from one place to another as costs or exchange rates might dictate. In 1956, the world was full of small manufacturers selling locally; by the end of the twentieth century, purely local markets for goods of any sort were few and far between.

For workers, of course, this has all been a mixed blessing. As consumers, they enjoy infinitely more choices thanks to the global trade the container has stimulated. By one careful study, the United States imported four times as many varieties of goods in 2002 as in 1972, generating a consumer benefit—not counted in official statistics—equal to nearly 3 percent of the entire economy. The competition that came with increased trade has diffused new products with remarkable speed and has held down prices so that average households can partake. The ready availability of inexpensive imported consumer goods has boosted living standards around the world.
²

As wage earners, on the other hand, workers have every reason to be ambivalent. In the decades after World War II, wartime devastation created vast demand while low levels of international trade kept competitive forces under control. In this exceptional environment, workers and trade unions in North America, Western Europe, and Japan were able to negotiate nearly continuous improvements in wages and benefits, while government programs provided ever stronger safety nets. The workweek grew shorter, disability pay was made more generous, and retirement at sixty or sixty-two became the norm. The container helped bring an end to that unprecedented advance. Low shipping costs helped make capital even more mobile, increasing the bargaining power of employers against their far less mobile workers. In this highly integrated world economy, the pay of workers in Shenzhen sets limits on wages in South Carolina, and when the French government ordered a shorter workweek with no cut in pay, it discovered that nearly frictionless, nearly costless shipping made it easy for manufacturers to avoid the higher cost by moving abroad.
³

A modern containerport is a factory whose scale strains the limits of imagination. At each berth—the world’s biggest ports have dozens—rides a mammoth oceangoing vessel, up to 1,100 feet long and 140 feet across, carrying nothing but metal containers. The deck is crowded with row after row of them, red and blue and green and silver, stacked 15 or 20 abreast and 6 or 7 high. Beneath the deck are yet more containers, stacked 6 or 8 deep in the holds. The structure that houses the crew quarters, topped by the navigation bridge, is toward the stern, barely visible above the stacks of boxes. The crew accommodations are small, but so is the crew. A ship carrying 3,000 40-foot containers, filled with 100,000 tons of shoes and clothes and electronics, may make the three-week transit from Hong Kong around the Cape of Good Hope to Germany with only twenty people on board.
⁴

On the wharf, a row of enormous cranes goes into action almost as soon as the ship ties up. The cranes are huge steel structures, rising 200 feet into the air and weighing more than two million pounds. Their legs stretch 50 feet apart, easily wide enough for several truck lanes or even train tracks to pass beneath. The cranes rest on rails running parallel to the ship’s side, so that they can move forward or aft as required. Each crane extends a boom 115 feet above the dock and long enough to span the width of a ship broader than the Panama Canal.

High up in each crane, an operator controls a trolley able to travel the length of the boom, and from each trolley hangs a spreader, a steel frame designed to lock onto all four top corners of a 40-ton box. As unloading begins, each operator moves his trolley out the boom to a precise location above the ship, lowers the spreader to engage a container, raises the container up toward the trolley, and pulls trolley and container quickly toward the wharf. The trolley stops above a rubber-tired transporter waiting between the crane’s legs, the container is lowered onto the transporter, and the spreader releases its grip. The transporter then moves the container to the adjacent storage yard, while the trolley moves back out over the ship to pick up another box. The process is repeated every two minutes, or even every ninety seconds, each crane moving 30 or 40 boxes an hour from ship to dock. As parts of the ship are cleared of incoming containers, reloading begins, and dockside activity becomes even more frenzied. Each time the crane places an incoming container on one vehicle, it picks up an outbound container from another, simultaneously emptying and filling the ship.