Those Cargo Containers

Did you ever wonder about those cargo containers stacked down at the port, on the back of semis, on car after car of the trains? Well, I did. Just a little. The ultimate in modularization!

Well, they first sailed fifty-one years ago, but didn't get going strong till the Vietnam War, shipping war supplies to Vietnam, sailing empty to Japan, and bringing cheap goods to America.

And now we shall turn to American Heritage for more:

Much of the expense of freight transportation has always lain in breaking bulk, when goods are transferred from one form of transportation, such as a ship, to another, such as a truck, train, or river steamer. Since men first went down to the sea in ships, cargo was loaded on board piecemeal and unloaded the same way. This called for great skill both to ensure that cargo space was used to the utmost and that weight was properly distributed. Modern cargo ships required sometimes hundreds of stevedores to be unloaded quickly, and then the cargo had to be loaded piece by piece onto trucks or trains to get to its final destination. It was a cumbersome and expensive process.

In the early 1950s an American trucking executive named Malcom (that’s how he spelled it) McLean initiated a better idea: Carry the cargo in aluminum and steel containers that could fit directly on flatbed railroad cars or trucks. A few crane operators could then load or unload a ship and have the goods on their way in a matter of hours.

[...]

As the first container ship sailed out of Newark, bound for Houston, an official of the International Longshoremen’s Association, the notoriously corrupt union whose members handled cargo at East Coast ports, was asked what he thought about it. “I’d like to sink that son of a bitch,” he replied.

He was right. Most of the cost of freight handling at ports went to the wages of the many longshoremen needed to load and unload ships in a timely manner. Containerization reduced freight-handling costs from $5.86 to 16 cents a ton, a drop of 97 percent. (Containerization greatly reduced the amount of dockside pilferage as well, which also reduced costs substantially.) Since cargo handling is what economists call a “transaction cost,” a cost of bringing a product to market without adding at all to its value, any reduction in it translates directly into increased profits for manufacturers and—thanks to competition—decreased prices for customers.

hat tip: Tom McMahon