More on this book
Community
Kindle Notes & Highlights
Read between
February 14 - February 25, 2021
The world likes heroes, even if the worshipful story of one person’s heroic effort is rarely an accurate representation of the complex path of technological advance.
A ship carrying 9,000 40-foot containers, filled with 200,000 tons of shoes and clothes and electronics, may make the three-week transit from Hong Kong through the Suez Canal to Germany with only twenty people on board.4
Almost every one of the intricate movements required to service a vessel is choreographed by a computer long before the ship arrives. Computers, and the vessel planners who use them, determine the order in which the containers are to be discharged, to speed the process without destabilizing the ship.
A 25-ton container of coffeemakers can leave a factory in Malaysia, be loaded aboard a ship, and cover the 9,000 miles to Los Angeles in 23 days. A day later, the container is on a unit train to Chicago, where it is transferred immediately to a truck headed for Cincinnati. The 11,000-mile trip from the factory gate to the Ohio warehouse can take as little as 28 days, a rate of 400 miles per day, at a cost lower than that of a single business-class airline ticket. More than likely, no one has touched the contents, or even opened the container, along the way.
This high-efficiency transportation machine is a blessing for exporters and importers, but it has become a curse for customs inspectors and security officials. Each container is accompanied by a manifest listing its contents, but neither ship lines nor ports can vouch that what is on the manifest corresponds to what is inside. Nor is there any easy way to check: opening the doors at the end of the box normally reveals only a wall of paper-board cartons.
From a tiny tanker laden with a few dozen containers that would not fit on any other vessel, container shipping matured into a highly automated, highly standardized industry on a global scale.
As economist Nathan Rosenberg observed, “Innovations in their early stages are usually exceedingly ill-adapted to the wide range of more specialised uses to which they are eventually put.”
although Thomas Edison invented the incandescent light bulb by 1879, only 3 percent of U.S. homes had electric lighting twenty years later.
The data on freight costs from the mid-1950s through the 1970s are so severely deficient that they will never provide conclusive proof, but the undisputed fact that the transportation world raced to embrace containerization is very strong evidence that this new shipping technology significantly reduced costs.
Most important, the containers Pan-Atlantic planned to use would be designed to be shifted easily among ships, trucks, and trains.
company. Decades later, those early Sea-Land employees remembered the years when they were creating the container shipping industry as the best time of their lives.
Before the 1980s, “logistics” was a military term. By 1985, logistics management—the task of scheduling production, storage, transportation, and delivery—had become a routine business function, and not just for manufacturers.
The economics of containerization have shaped these global supply chains in peculiar ways. Distance matters, but not hugely so. A doubling of the distance cargo is shipped—from Hong Kong to Los Angeles, for example, rather than Tokyo to Los Angles—raises the shipping cost only 18 percent. Places far from the end market can still be part of an international supply chain, so long as they have well-run ports and a lot of volume.
The Pacific Rim became the world’s workshop for consumer goods, in good part, because large ports for containers gave it some of the world’s lowest shipping costs:
Containerization did not create geographical disadvantage, but it has arguably made it a more serious problem.
Countries that fail to modernize their ports will receive the maritime equivalent of branchline service on a single-track railway. The big containerships that link national economies in the global supply chain, carrying nothing but stacks of metal boxes, will pass them by.16
By 2015, behemoths holding 10,000 40-foot containers had joined the world’s merchant fleet, and ships that had been state-of-the-art two decades earlier were being sold for scrap. By some estimates, the giant vessels cut 30 percent or more off the cost of moving a container from Asia to Europe: a ship laden with 10,000 full-size containers burns perhaps half as much fuel per box as one carrying 3,000 containers, and the size of the crew need be no larger.
Perhaps the most remarkable fact about the remarkable history of the box is that time and again, even the most knowledgeable experts misjudged the course of events.
