• 16/08/18 General

    The box that changed the world

    By Doron Fishler

    Published on Alaxon – digital magazine for thoughts, articles of notes and new ideas

    Translated to English by Dr Wipe

    containers in Hong Kong port

    containers in Hong Kong port

     

    If you are sitting on a Swedish chair, wearing shoes made in Thailand and work on a computer made in China, you have a big elongated steel box with two large doors to thank.
    These are some of the inventions that changed the world, not necessarily in order of importance: the wheel, the printing press, the computer, the light bulb, the container.
    The last item is a bit different than the rest of the list. The container is not a technological or scientific breakthrough: it’s a box. A long, steel box with two large doors on one side. Every time you passed some port you must have seen huge parking lots filled with these boxes, in different colors and placed one on top of each other, like huge Lego blocks. The container receives much less credit than the invention of the computer of the fire, but this box has shaped the world we live in today.
    At this very moment, there are probably dozens of imported items within your hand reach. Your computer screen was made in china, and so were the components of your mobile phone, even though the phone itself may have been assembled in Korea. Your shirt was very likely sewn in Bangladesh, and your socks – in Columbia, but the wool was weaved in Vietnam from American cotton.
    Your shoes may be Italian, but they were made in Indonesia. You may be sitting on a Swedish chair, eating Swiss chocolate and drinking Turkish coffee, which was grinded from Columbian beans.
    It hasn’t been always like that. It was not that long when the average man did not come in touch with anything that was made more than dozens of kilometers away. International trade, sometimes intercontinental, has existed for thousands of years, but these long journeys are a huge investment and therefore anything that comes from afar has to be expensive. In Europe, black pepper was considered a luxury item and a status symbol for many years. The spice itself, is simple and cheap to produce – in the far east. What has made it into edible gold was its transportation into European houses. Merchants spent months and even years, in dangerous journeys across Asia and the middle east, and later – across the sea, hostile oceans and around Africa – all this in order to satisfy the European hunger for pepper. The component of pepper in the price of each pepper grain was almost zero; most of the price is the price of the transportation.
    As transportation means developed, international transportation became less expensive, and import from far-away places has become practical. In the 1950’s, you no longer needed to travel on a camel’s back in order to transport the pepper, and yet the simple rule was that local goods are cheap and what comes from far away – is expensive.
    You can import clothes from the other side of the world, but they should be luxurious clothes for the rich. No one considered importing disposables from China.
    And then came the box.
    The man behind the container’s vision is Malcolm McLean. Many inventors have colorful stories, not necessarily historically accurate, about their Eureka moment – the apple that fell on Newton’s head, Archimedes bath. In McLean’s case, according to the story he used to tell, the idea that changed the world came into this head around 1935, while sitting in a truck near a port, bored to death.
    At the age of 22, MckLean was the owner of a trucking company, which had a fleet of exactly one truck; he was also the only driver in the company. In theory, a truck driver’s job is mostly on the open road while in fact, MckLean found out that he spends less time riding on the road than waiting in the ports. McLean would bring cotton from the plantations in North Carolina to Hoboken port, New jersey, overlooking Manhattan. Over there the goods were unloaded from this truck by the dockworkers, and loaded unto one of the cargo ships sailing to sell it around the world. The process of unloading the truck took a long time, and bored McLean had plenty of time to examine the work of the dockworkers.
    Each cargo ship was loaded with hundreds of thousands of different items- boxes, Crates, barrels, sacks, packages and bundles of sorts. Each of these items had to be loaded using a crane from the dock to the ship, moved into its proper place on or below the deck, listed and numbered, tied and tightened and position the items one of top of the other in a way which will utilize the space in the ship most efficiently and would not collapse with the waves. Loading and unloading the cargo ships was a task that demanded expertise and strong back muscles, but most of all it demanded time. Lots of time. The typical loading time for one cargo ship – a relatively small ship compared to today’s huge cargo ships – took longer than a week. At the end of the loading, the ship sailed – and when it reached its destination another week was spent unloading the goods.
    Since the consumers are not usually located at the port, all of the cargo had to be reloaded – on trucks or on train cars or any transportation means that would take them from the port onward. Cargo and goods crossed thousands of kilometers, but most of the journey’s time was really spent in the 200 meters between the ship and the dock.
    All of this could be resolved, MckLean though: it would have been so much simpler if we would give up all this unloading, loading and unloading again. What if we could simply drive the truck into the ship? The ship would sail, filled with trucks – and they would come out at the destination port, all ready to drive to the final destination. McLean had nothing to do with his idea at that time, because he was merely a truck driver.
    Nearly 20 years later, McLean was much more than just a driver. His single truck company had turned into an empire of 1770 trucks. The shipping business, however, had changed very little. Now that he had the means, McLean had decided to try and realize his idea. In 1953 he acquired a shipping company, after selling his trucking company (since the US regulation had forbidden cross ownership of land and sea transport companies) and tried to implement his fantasy – ships that carry trucks. Soon he realized that his idea was faulty. The weight and volume of the trucks made the transportation very inefficient. Even if you load only the wheels and the trunk, without the front part – the options are very limited, and trucks cannot be loaded one on top of the other. McLean decided to try a different idea: to dismantle from the truck the trunk, and to load the trunk only, on the ship.

     

    Malcolm Macklin at Newark port 1957

    Malcolm McLean at Newark port 1957

    The advantages were identical: one huge item is loaded on the ship instead of dozens or hundreds of separate items, and when the ship reaches its destination you can put the container on a different truck and send it on its way. As a result, the loading and unloading of the ship – a process that used to take at least a week in the past – would now be completed in few hours. The saving in time is enormous, and time, especially in the transportation industry, is money. A week of loading and unloading translates to two weeks delay int eh shipment, two weeks of payment for staying in the port, and two weeks of salaries for dozens of port workers. The containerization enabled getting rid of all of this in one stroke.

    The history of modern shipping marks as the starting point on April 26, 1956, when one of McLean’s new ships, SS Ideal X, sailed from Newark to Houston with 59 steel containers on its deck. According to McLean’s calculations, the cost of loading cargo on a ship using the prevalent way back then was 5.83 Dollars per ton of cargo. The cost of loading containers on the Ideal X? 16 cents per ton.

    cargo ship

    A cargo ship overturns at sea

    Loading of cargo on ships using big boxes, by itself, was not a new idea. In the past, many attempts were made to transport cargo in large containers, but in most cases the containers were relatively small, lacking standard dimensions, and did not facilitate much of the loading. None of them were used extensively. The idea named after McLean was the use of the container as a Lego block: a box that can be connected to other boxes, dismantled, loaded on ships, unloaded, connected to other vehicles and so on and so forth – a multi-use box.
    You can load a container at a manufacturing plant, and then send it on a long journey crossing seas and continents in ships, trucks and trains, until its final destination, and all this without being opened on the way even once.
    Setting international standards is no simple task even under the best conditions. It is almost impossible when dealing with enormous steel boxes that are supposed to move on wheels in Germany, at sea between India and China and on a truck in Columbia.
    In order to implement this vision a whole huge array was needed across continents and seas, of vehicles adapted for this; not just ships, but also trucks and trains all adapted to the standard size of the container. In other words: uniform standards. In the first decade of their use, the transport industry had reached an agreement that containers are a good idea, but not what their size should be. Different companies had operated different transport lines using containers, but each one had its own set of dimensions for its containers- so you could only use one companies containers in that company’s ships.
    Building few ships and few thousand boxes – that turned out to be the easy part. The hard part was making the world agree on the dimensions of these boxes. Setting uniform International standards is no simple task even under the best conditions. It is almost impossible when dealing with enormous steel boxes that are supposed to move on wheels in Germany, at sea between India and China and on a truck in Columbia. Countries that do not even agree on whether driving should be done on the right or left side of the road, or whether measurements should be done in inches or Centimeters, had to reach an agreement – and also decide who is the institution that has the authority to tell everyone how to build their containers. Each country had already its own rules and regulations, sometimes arbitrary, and Ideal X companies that had expertise working according to these regulations. Maclin’s containers for example, were 33 feet long, because that was the legal limit on the length of a truck’s trailer in the state of Pennsylvania – and you had to cross there while on the way to New York’s port. In some of Europe’s states the width of the cargo transported on trains was limited to 7 feet (2.1 meters) – because, well, bridges and tunnels had to be passed on the way.
    After decades of discussions, debates, negotiations, arguments and compromises, it happened. In 1968 the International Organization for Standardization ISO) published ISO 668, the official recommendation for the size and structure of containers. The length of a standard container is 12.2 meters (40 feet), its width is 2.44 meters and its height is 2.59 meters. It contains 77 square meters and can hold up to 20 tons of goods.
    The publishing of the standard enabled the containerization revolution to really take off. Ships carrying cargo in bulk were rapidly disappearing, and in their place appeared ships carrying those large colourful boxes, sometimes in towers up to seven containers on top of each other. Soon the container became one of the accepted standards around the world; you could find them, identical, loaded on ships in Indonesian ports and crossing Canada by train.
    The cost of the revolution was huge. The entire shipping industry had to change from the ground up. Old ships were retired and replaced by new ships, adapted to transporting only containers. At the same time, huge cranes, necessary of the loading and unloading of these truck size boxes, were installed at the ports. The predicted saving in costs was so tremendous, that the changes were done with impressive speed.
    Like in so many other areas, one of the effects of progress was the devastation of romance. The picturesque image of the life of the sailor as a strong seafarer, wandering the waves on a picturesque ship loaded with crates and barrels, reaching exotic cities around the world, spending a week in each one leaving behind a trial of broken hearts – kiss me tonight because tomorrow my ship sails – all that disappeared. Todays cargo ships are reminiscent of floating office buildings. They are huge (the largest ships are at the height of 20 story building and have space for 9000 standard containers). The have a small staff (around 30 people, sometimes less than 20), and the stops at the ports are so short that most times the staff hardly has time to visit the nearest pub, sometimes they don’t even bother getting off the ship. The exciting life at sea was replaced by months of monotony.
    At the same time the ships were changing, ports where changing too. The containers era is the era of mammoth ships; small shallow ports simply disappeared, because they couldn’t contain the necessary infrastructure. Hoboken port – the port where waiting there bored young McLean to death- was one of the first victims. The small crowded port was abandoned almost completely on 1970, only two years after the standards were published, and its ships traffic had moved to nearby Newark port, which is further away from population centers – but is spacious enough to install the modern cranes and the vast asphalt spaces in which the containers lay, in heaps, after being unloaded from the ships.
    Following the ports, the cities had changed too. 50,000 New York port workers had to find alternative employment when New York stopped being a port city. Meanwhile, relatively small and secluded cities, such as Seattle, suddenly turned into important commercial centers. In addition, if in the past, every bid city needed a furniture plant, a clothes plant, and plants for all the other things people need, and all these within a short distance- the drastic reduction of transportation cost had moved all these industries away from city centers, to any other place where the land or work were cheaper.
    But the biggest impact of the containerization was when this phenomenon occurred on a global scale. Until the switch to containers, the far East countries could manufacture cheap products, but the transportation costs from the east to the west erased this advantage. After the cost of shipping goods via the sea had dropped, the west had quickly discovered that the east has cheap labor force and was quick to exploit it; the container is what enabled the far east to become the sweatshop of the world.

    So how cheap is the journey across the sea in the age of the container? so cheap it is almost inconceivable. There is no uniform price to container transport – the price varies according to the seasons, demand and supply and additional factors- for example, the cost of transporting one container from Hong Kong to Europe will usually be around 2500 USD. About the cost of 3 airline tickets for the same route. That same container may hold about 10,000 pairs of shoes, 5000 lap tops or 15 tons of bananas. A quick calculation will reveal that no matter what the goods are, the cost of transport per unit (about 25 cents per pair of shoes, 50 cents per laptop, 2 cents per banana) is completely marginal. The distance between the manufacturer and the consumer has turned almost meaningless.
    A company that is looking for a manufacturer will turn to the one who will offer it the lowest price, whether the factory is 50 meters or 15,000 kilometers from the store. In most cases it will find out that the lowest price is in China.

    The fact that geographical distance has become irrelevant creates almost absurd situations. For example, China is today the largest textile exporter in the world: in 2013 it has exported clothes worth 274 Billion Dollars. About 30 Billiion out of which were exported to the USA. At the same time, China is the worlds largest cotton importer. Only a small fraction of the clothes manufactured in China come from cotton raised in China; the rest is manufactured from imported cotton. Imported from where? from the USA (amongst other places), the world’s largest cotton manufacturer. Cotton beans, harvested in Mississippi, may be shipped to China, and then return home in the shape of a “GAP” sweatshirt. Wouldn’t it be cheaper and simpler to leave the cotton at home? The answer is no. The differences between the cost of labor in the US and China is so great – and the cost of transport so low- that it is worth it to have the cotton travel around the world, literally, only to visit the Chinese factories along the way.
    The result is the economical word we live in, where we buy shoes made in Thailand, shirts from Bangladesh, and everything is Made in China. This revolution has done wonders for the economies of the developing countries: South Korea, a secluded country without any natural resources, has turned into an economic empire right in parallel to the rise of the containers. China came following Korea, and the proven economic benefits from ties to the west has caused the communist country to open up to external ties much more than it had in the past. The quality of life for many of its billion citizens has risen dramatically.
    For better or worse, the container has created modern economy, and economy creates the rest. Globalization could not have taken place without the container.
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