The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger - Second Edition with a new chapter by the author

The second important result of shippers’ new power in the 1970s, along with their willingness to defy the shipping cartels, was their embrace of an idea that had been a heresy: the deregulation of transportation.

The launch of so many vessels resulted in a quantum jump in capacity. The basic economics of containerization dictated as much. Once a ship line had made the decision to introduce containerships on a particular route, other carriers in the trade normally followed swiftly lest they be left behind. The capital-intensive nature of container shipping p

Asked later whether he had considered ways to shelter some of his wealth from the risks of entering the maritime business, his answer was an unequivocal “No.” McLean explained: “You’ve got to be totally committed.”

Four years later, it got out of the shipping business altogether and spun off Sea-Land as an independent company. As R. J. Reynolds’s new management explained to investment analysts, “investors who might be interested in owning RJR stock were not the type who ordinarily would be interested in a capital-intensive, cyclical transportation company.”35

Big shippers, though, were accustomed to such regulatory impediments. They saw not only that piggyback could save money, but that lower transport costs would let them sell their goods in cities that had always been too expensive to ship to. As the railroads increased train speeds, the time needed to deliver a truck trailer from Chicago to Californi

The true importance of the revolution in freight transportation would be found not in its effect on ship lines and dockworkers, but later, as the impact of containerization resonated among the hundreds of thousands of factories and wholesalers and commodity traders and government agencies with goods to ship. For most shippers, except perhaps govern

These two unrelated developments—the rise of New York, the neglect of Tampa and Mobile—revealed the economics that would affect seaports as container shipping grew. For ports, capturing container traffic was going to be expensive, requiring investments out of all proportion to what had come before. For ship lines, the days when vessels meandered al

The improvement in logistics shows up statistically in reduced inventory levels. Inventories are a cost: whoever owns them has had to pay for them but has yet to receive money from selling them. Better, more reliable transport has permitted companies to obtain goods closer to the time they need them, instead of weeks or months in advance, tying up

Malcom McLean’s shareholding, representing 88 percent of McLean Industries’ common stock, was wiped out, and he and his son Malcom McLean Jr., a vice president, were ejected from the management. Thousands of people lost their jobs.23 “Malcom never got over the U.S. Lines bankruptcy,” a longtime associate said later. He went into seclusion, shunning