Because of shipping containers being everywhere that we look, we take them for granted in today’s society. But you only need to go back 60 years when there were no shipping containers and no inter-modal transport systems.
How is it that the world knows the name Henry Ford yet not Malcom McLean? Today we look at the history of shipping containers. We will explore what we used before them, how and who invented them and finally, the impact they have had on globalization.
For centuries, mankind has voyaged across the seas, taking not only themselves but food, cotton, treasure and goods, the likes of which their own country had never seen before. Just think of the Egyptians, Greeks, Romans and more recently the British!
How did they transport their goods around the world? They clearly shipped to other countries, but without any standardization it was a slow and difficult process.
Goods would be stored at a port warehouse until a boat was available. When an empty vessel arrived, these goods would be transported from the warehouse to the side of the docked ship. Goods would typically be loaded into sacks, bales, crates and barrels, and then they would be loaded by hand onto the ship. As you can imagine this was a very labor intensive process. This process was known as break bulk cargo. A typical ship would have around 200,000 pieces of cargo onboard.
Towards the latter part of the second industrial revolution (early 1900’s), this lack of standardization was becoming a real issue, especially considering how prevalent trains had now become. Transferring cargo from ships to trains was extremely slow and caused major delays and blockages within many ports. Larger ships would take around a week to unload then reload (Levinson, 2006: The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger).
This was the only way to transport goods and for centuries this process remained unchanged.
Just Who Was Malcom McLean?
There was a great need for a standardized method of transport, but for this to be realized, a whole host of industries needed aligning such as ships, trains, trucks, and port terminals. As you can imagine, it would require a lot of work and persuasion to make such a feat possible.
This is where you find out exactly who Malcom McLean is.
Malcom McLean was born in 1914 and grew up on a farm in North Carolina. After finishing school in 1931, he worked for several years to save up enough money to purchase a second-hand truck. In 1934, he launched his transport business. McLean soon scaled up his transport business and had five trucks running underneath him.
During a routine delivery of cotton bales in 1937, from North Carolina to New Jersey, McLean witnessed dockworkers loading and unloading cargo, which took hours upon hours. He contemplated what a waste of time and money this was.
From 1937 until the start of 1950, McLean focused on his transportation business, which had over 1,750 trucks and 37 transport terminals. In fact it was the fifth largest truck transportation business in the whole of America.
It was during this time period that several weight restrictions and levying fees were introduced to road transportation. It was not uncommon for McLean’s drivers to be fined for heavy loads of cargo.
McLean was now looking for a more efficient way to transport his clients’ cargo and was reminded of his experience in New Jersey back in 1937. This was when he had the idea of creating a standard sized trailer which could be loaded onto boats in the volume of not one or two, like with his trucks, but in hundreds. He envisioned revolutionizing his transportation business by removing most of his trucks and using boats to transport the goods to strategically placed trucking hubs.
This would mean that trucks would only be used for short, intrastate deliveries, eliminating the weight restrictions and levying fees which had recently been introduced.
The Birth of a New Era: Intermodalism
McLean, convinced by his idea to create a standardized shipping trailer or container, sold his trucking business. In 1955, he took out a bank loan for $42 million. He used $7 million of this loan to purchase the established shipping company, Pan-Atlantic Steamship Company. Pan-Atlantic already had docking rights in many of the eastern port cities which McLean was targeting. Shortly after buying them he renamed the company SeaLand Industries.
McLean then went on to test variations of the container and finally settled on a primitive form of what we know today as the shipping container. It was strong, standardized, stackable, easy to load and unload and lockable, which made it theft resistant.
So now McLean had his containers and the final piece of the jigsaw puzzle was designing ships which could hold the containers. He bought the oil tanker, Ideal X, and modified it to hold 58 of his newly designed containers, in addition to 15,000 tons of petroleum.
On April 26, 1956, Ideal X left New Jersey, heading for Houston. The success of his design was reinforced when the company was taking orders before the ship even docked in Houston to take goods back to New Jersey. This was mainly due to McLean being able to offer 25% discount off the price of conventional cargo transportation at the time. Also, because the containers were lockable, it stopped goods from being stolen during transit.
The Expansion of Shipping Containers
Following the success of Ideal X’s maiden voyage, McLean ordered the first ever ship specifically designed to carry containers: Gateway City.
Gateway City’s first voyage was in October, 1957, and went from New Jersey to Miami. Incredibly, it only required two groups of dockworkers to unload and load the cargo. The cargo could be moved at a staggering 30 tons per hour, which was unheard of at the time.
At this point, McLean was using 33 foot containers, different from the 20 and 40-foot containers which we see today.
However, there was still the issue of a lack of standardization with regards to the container’s size and corner fittings. This standardization was needed so containers could be stacked efficiently. Also trains, trucks, and other transport equipment required a standard sized container so each method of transport could be built to a single size.
During the Vietnamese war, the US government was looking for a way to ship goods more efficiently and was pushing for standardization. McLean’s SeaLand Industries was still using 33-foot containers, while industry rival Matson’s were using 24-foot containers. McLean agreed to release his patent of the revolutionary shipping container corner posts (vital to its strength and stacking) and several standards were agreed.
- January 1968: ISO 338 defined the terminology, dimensions and ratings.
- July 1968: ISO 790 defined how containers should be identified.
- October 1970: ISO 1897 defined the recognised sizes of the containers.
As a result of these standards, we now have the 20-foot and 40-foot shipping containers (see shipping container dimensions for more information). In fact, 20-foot containers, called Twenty-foot Equivalent Unit (TEU), went on to become the industry standard for referencing cargo volume.
The final stage to shipping containers spreading worldwide was the resistance at ports due to the widespread redundancies caused by containers.
Traditionally, the process of loading cargo required lots of port workers to physically manhandle all of the goods into position. However with containers, these workers were no longer required, which caused outrage with the dockside unions. During the early 1970’s, many union workers went on strike, disrupting the shipping industry and shipping container’s rapid expansion.
However, due to the huge financial savings of containerized shipping, these union workers were paid severance agreements and shipping containers’ growth skyrocketed.
As a result, by 1970, SeaLand Industries had 36 container ships, twenty-seven thousand containers and connections to more than 30 ports in America.
McLean then sold the company to R.J. Reynolds for $160 million.
For more information on Malcom McLean click here.
Shipping Containers: Legacy
It took a mere ten years for the first every international container ship voyage. In April, 1966, SeaLand’s Fairland sailed from the US to the Netherlands with a whopping 236 containers on board.
From here, container ships saw a massive expansion, and in 1968, container ships had the capacity to carry around 1,000 TEUs, which was exceptionally large at the time.
Many now claim containers have been the single largest driver in globalization over the last sixty years.
- The cost to ship cargo has dropped more than 90%.
- In 1956, cargo cost $5.86 per ton to load, while now it only costs around $0.16 per ton.
- In 1966, around 1% of countries had container ports, but this rose to 90% by 1983.
- Malcom McLean has been awarded “Man Of The Century” by the International Maritime Hall of Fame.
- Pre-containers, cargo could be loaded at around 1.3 tons per hour. This increased to over 30 tons per hour by 1970.
- In 2011, the shipping ports of America received $1.73 trillion worth of goods.
- Around 90% of every purchased item has been shipped inside a container.
- There are close to twenty million shipping containers in the world, which make over 200 million trips per year.
- A sweater can now travel 3,000 miles for 2.5 cents by sea.
- There are more than 6,000 container vessels currently in service.
- The largest container ship in the world, MSC Oscar, has a TEU of 19,224: source.
Wow, how about that! I bet you didn’t know that the humble shipping container experienced such an interesting beginning! Who knew that what we are now using to construct homes changed the world so much.
Let me know, in the comments area below, if you have any other incredible facts about Shipping Containers in the 21st Century!