Think ABOUT The Box
HOW SHIPPING CONTAINERS CAME TO RULE THE TRADE WORLD
Malcolm P. McLean may well be the most important man of the 20th century that you’ve never heard of. It was his Big Idea that not only made modern shipping possible, but modern life since it would be hard to imagine life as it is lived today without McLean’s significant, yet oh-so-simple innovation: the shipping container. It came to him in 1937 while watching longshoremen in Hoboken, New Jersey, go through the centuries-old exercise of loading and unloading irregular cargo. Thus were the roots of the container which would forever alter and improve trade, or as President Bill Clinton said, “fuel the world’s economy.” Shipping containers reach every corner of the Earth and move every conceivable item. There are more than 17 million of them in the world today and, at any one time, more than five million aboard vessels. So important was McLean’s invention that it has been hailed as “the greatest advance in packaging since the paper bag.” As you’ll see, it’s proved to be every bit as ubiquitous and versatile.
In the beginning, we lived in whatever we could find and repurpose, whether that was a cave or a cozy, tar pit-adjacent hut. Back then, the goods that were available to you extended as far as you could walk and carry back—or how long you could wait for the caravan to show up that decade.
It’s believed that the first trade ships began following marine trade routes on the Arabian Sea about 4,000-5,000 years ago. While this represented a significant jump forward in human commerce, the manner in which goods were transported would remain virtually unchanged for thousands of years, with goods piled in a mish-mash of barrels, sacks and wooden crates that made loading and unloading so slow and cumbersome that it was not unusual for a ship to spend more time in port, while dockworkers manually handled and hoisted cargo out of tight spaces below deck.
Incredibly, it wasn’t until after World War II that things changed. In 1955, former trucker Malcolm P. McLean sold his share of McLean trucking and bought the Pan Atlantic Steamship Co. of Mobile, Alabama. He then set about to prove his theory that goods shipped in standard-sized containers would make sorting, loading, unloading and processing much faster and less expensive.
In April of 1956, a converted oil tanker named Ideal X set out for Houston from Port Newark loaded with 58, 30-foot containers on a specially rigged decked that had been fortified to handle the extra load. McLean would soon change the name of his company to Sea-Land.
McLean’s belief that trade could be significantly improved through “intermodalism” where cargo is transported in the same container via different transport modes—rail, truck, ship—quickly took hold and, just 40 years later, 90 percent of all world trade was moving thusly. That year, 1996, New York City officials honored McLean, dubbing him shipping’s “man of the century.”
In 1961, the International Organization for Standardization determined that a 20-foot container would be the industry standard and, to this day, containers are referred to in terms of TEUs (twenty-foot equivalent units), though the most frequently used container today is a 2 TEU, i.e. 40-foot container.
Though China dominates when it comes to the manufacturing of containers—China International Marine Container Group can claim nearly half the world’s market share—there are American manufacturers such as Sea Box of New Jersey and W&K Container in California.
New containers can be expected to last about 20 years. Those who purchase used containers can expect to get about 10 years of service. About 10,000 containers are lost at sea every year. Some sink immediately, but some float just below the surface and pose a significant damage risk to other ships on crowded trade routes.
Containers not only changed how cargo was transported but how ports and ships look and operate. It used to be that ports were busy hubs of humans running about. Any visit today to a modern port shows very few people on the docks, as giant cranes, operated by single pilots, go about the business of methodically moving and organizing containers. As dealing with containers has become a virtual science, ships have grown exponentially. Consider that the first container ships could handle about 500 boxes. By 1985, the Panamax Max fleet of ships could handle eight times that and the recently launched New Panamax, can move 12,500.
The Triple E class, the largest vessel on the ocean, was recently launched by Maersk to handle trade exclusively between Asia and Europe. It can hold 18,000 TEUs.
The enormous popularity of containers has turned into an enormous glut. Last year, about 7 million containers found their way to the U.S., but only 2.5 million left these shores. That means a lot of containers are sitting around gathering rust, which has become an eyesore for communities located around ports. It’s also created a hearty market for resellers to move their product to individuals, businesses and schools looking for added mobile storage space.
Increasingly, containers are being repurposed as homes, ranging from low-income housing, to luxury dwellings. With building materials skyrocketing—in part because of ever-growing demand by the Chinese—containers offer inexpensive material that is durable, resistant to mold and can be refashioned as something highly functional and/or indulgent. Consider that Los Angeles architect Peter DeMaria’s Redondo House, made of containers and located in Manhattan Beach, is valued in the millions.
Trade Cycle March-April ’13