Monday, June 18, 2007

I recently read "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger," by Marc Levinson. Sounds kind of boring, huh? You might be surprised. While it certainly drags in places, it's a pretty interesting story. This is a book intended for a popular audience, and it generally hits the mark. There could have been less information about various political and regulatory developments, but much of that was essential for demonstrating both the resistance and then the transformation wrought by the shipping container.

50 years ago, if you wanted to send 50 bags of coffee across the ocean, someone would walk each back one by one onto a freighter and find somewhere to stick it. The process was unbelievably inefficient. Goods would take more time to be loaded and unloaded than they actually spent on the ocean in transit. Then there were the union rules and interstate and international commerce rules, which might be enough to turn anyone into a laissez-faire capitalist. For instance, if the longshoremen received a palletized shipment for transport, they would unpack the pallet on the dock, repack the same shipment onto the same pallet, and only then load it, billing the shipper for the extra time. The Interstate Commerce Commission in the United States had books of rules about how much truckers, railroads, and cargo ships could charge for each commodity, and which routes they could take; a trucker couldn't take an alternate, shorter route from Nashville to Atlanta unless his company had the rights to that route, and he had to drive the truck back empty if they only had cargo rights in one direction. Needless to say, all of this had a crippling impact on efficiency, and thus a huge increase in costs.

The container was by no means a non-obvious invention. Various attempts had been made over a period of decades to rationalize freight, but ran into various obstacles due to (lack of) scale, political consideration, union resistance, or technological problems. Only in the late 1950s did the various factors come together with the drive and vision of one Malcom McLean, who wasn't even in the marine shipping business. Over the course of just a couple of decades, the container completely transformed the shipping business, with growth to match that of any high tech startup. The changes rippled throughout the world economy as land-based shipping and manufacturers adapted. That a computer assembly plant in Tennessee can put together Korean RAM, Taiwanese motherboards, German CPUs, and Japanese displays delivered yesterday to fulfill a $300 order today owes everything to the revolution of the shipping container. It ranks with the automobile or the telephone in its transformative effect on society, but unlike those other inventions, its impact was hidden from the public eye. Until now.

( books )