Shipping Containers: A Big Box Full of Contradictions

In 1956, Malcolm McLean sent the first standard shipping containers from Port Newark (above, shown in 1974) to Houston. U.S. National Archives via Wiki Commons

Containerization transformed everything from the urban labor force to suburban shopping.

September 14, 2017

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This piece is part of the Sidewalk Talk series “15 Innovations That Shaped the Modern City.”

It made its debut over a half-century ago as one man’s attempt to get a fully loaded truck trailer onto an awaiting cargo ship to save time. Today it’s credited with a decades-long boom in global trade, blamed for the rise of homogenous box stores from coast to coast, and still being touted as a creative platform for affordable housing. We’re talking about the standard 20-foot steel shipping container, which turned 60 last year but whose influence seems to expand in new ways every year, most especially in big cities. “Many cities got their starts as shipping hubs,” says Marc Levinson, author of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.

The origins

Just about every major civilization built its major cities along waterways to transport goods. Wadi al-Jarf in Egypt, the oldest port complex in the world, was in use around 2600–2550 B.C. Excavations of the site have uncovered jars used as storage containers painted with their intended destination. Simple, manual shipping systems like this opened cities up to trade; cities such as Istanbul and Athens based much of their infrastructure around their ports.

For centuries thereafter, the business model of port shipping proved remarkably resistant to change. As late as the early 1900s, so-called break bulk cargo—manual loading and unloading of cargo ships—remained the stubborn and increasingly problematic industry standard. Dock workers still loaded every bag, crate, and barrel on and off ships and trucks; larger vessels sat for weeks between unloading and reloading. Theft was rampant. An old waterfront joke put it this way: Workers could earn “$20 a day and all the Scotch you could carry home.”

Something had to give. “So long as cargo was handled one item at a time, with long delays at the docks and complicated interchanges between trucks, trains, planes, and ships, freight transportation was too unpredictable for manufacturers to take the risk that supplies from faraway places would arrive on time,” writes Levinson.

The breakthrough

Enter Malcolm McLean, the restless owner of a North Carolina trucking company, who in 1937 began thinking of a solution while waiting for hours for dock workers in Hoboken, New Jersey, to unload the cotton bales off his truck trailer. Trailers, McLean imagined, could be rolled into cargo ships in Fayetteville, unloaded in key ports in New York or New Jersey, then unloaded and hitched back up to trucks to take to final destinations. And stackable, heavy-duty steel containers, he later figured, could more efficiently replace truck trailers.

It took nearly 20 years for McLean to realize his vision and build a company that could scale it. But on April 26, 1956, McLean’s first container ship, an aging oil tanker from World War II called the Ideal X, pulled out of Port Newark, New Jersey, and steamed off for Houston, loaded with 58 of McLean’s new shipping containers.

McLean wasn’t the only entrepreneur to invest in improvements to the breakbulk model, but his was the trigger event that sparked adoption and radically changed the economics of shipping for decades to come. McLean’s first ship cost just 16 cents per ton to load; the rate for hand loading was closer to $5.83 per ton. In 1965, dock workers could typically move about 1.7 tons per hour onto ships; by 1970, they could load 30 tons per hour.

The impact

McLean’s invention soon morphed into a global economic shift—containerization—which continues to have ripple effects in cities and national economies around the world.  Containerization, as Levinson’s book explains in great detail, didn’t just change the business of shipping; it fueled an explosion in global commerce that continues today. In 1981, the Port of Los Angeles, handled 476,000 container loads in 1981. Today it moves nearly 8 million containers per year.

The impacts of containerization cover a wide spectrum. Dock workers were a first major casualty. In New York City, between 1963 to 1976, the shift to containers wiped out out 91 percent of the labor force. As other major ports of call suffered, writes Levinson, “small towns, distant from the great population centers, could take advantage of their cheap land and low wages to entice factories freed from the need to be near a port to enjoy cheap transportation.”

As cargo costs and trade barriers continued to fall during the 1980s and 1990s, containerization began to influence everything from macroeconomics trends to suburban culture. In 2013 the Economist reported that “containers have boosted globalisation more than all trade agreements in the past 50 years put together.” Another byproduct was the emergence of “big box” chains and retailers, through which suburbs suddenly enjoyed easy access to an astonishing array of products at discount prices.

As Levinson explains, “manufacturers such as Dell and retailers such as Wal-Mart Stores have taken the concept to the extremes, designing their entire business strategies around moving goods from factory floor to customer with minimal time in between.”

The future

Some port cities are now investing large sums in infrastructure to accommodate the increasingly larger ships that dominate the industry. But as ships continue to get bigger (the largest can carry 16,000 containers), they need to make fewer stops, forcing ports to compete for less frequent but ever-more-massive dropoffs of goods. According to Levinson, 46 percent of world container shipments moved through just 20 ports in 2014.

The containers themselves may be looking at alternate futures. While more than 17 million shipping containers populate the globe, only five or six million are in use at any given time and more than a third of containers are shipped empty, with many left discarded once unpacked. Small wonder, then, that architects and urban planners are experimenting with using containers in new ways—converting into restaurants, office buildings, and even homes.

September 14, 2017