Container history 5-The world is changed by containers

Getting from the Ideal-X to a system that moves tens of millions of boxed each year was not an easy voyage. Both the containers’ promoters and its opponents sensed from the very beginning that this was an invention that could change the way the world works. That first container voyage of 1956, an idea turned into reality by the ceaseless drive of an entrepreneur who knew nothing about ships, unleashed more than a decade of battle around the world. Many titans of the transportation industry sought to stifle the container. Powerful leaders pulled out all the stops to block its ascent, triggering strikes in dozens of harbors. Some ports spent heavily to promote it, while others spent huge sums for traditional piers and warehouse in the vain hope that the containers would prove a passing fad. Governments reacted with confusion, trying to figure out how to capture its benefits without disturbing the profits, jobs, and social arrangements that were tied to the status quo. Even seemingly simple matters, such as the design of the steel fitting that allows almost any container, were settled only after years of contention. In the end, it took a major war, the United States’ painful campaign in Vietnam, to prove the merit of this revolutionary approach to moving freight.
How much the container matters to the world economy is impossible to quantity. In the ideal world, we would like to know how much it cost to send one thousand men’s shirts from Bangkok to Geneva in 1955, and to track how that cost changed as containerization came into use. Such data do not exist, but it seems clear that the container brought weeping reductions in the cost of moving freight. 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. An enormous containership can be loaded with a minute fraction of the labor and time required to handle a small conventional ship half a century ago. A few crew members can manage an oceangoing vessel longer than three football fields. A trucker can deposit a trailer at a customer’s loading dock, hook up another trailer, and drive on immediately, rather than watching his expensive rig stand idle while the contents are removed. All of those changes are consequences of the container revolution. Transportation has become so efficient that for many purposes, freight costs do not much effect economic decisions. As economist Edward L.Glaeser and Janet E.Kohlhase suggest, “It is better to assume that moving goods is essentially costless than to assume to assume that moving goods is an important component of the production process.” Before the container, such a statement was unimaginable.
In 1961, before the container was in international use, ocean freight costs alone accounted for 12 percent of the value of U.S. Exports and 10 percent of the value of U.S. Imports. “These costs are more significant in many cases than governmental trade barriers,” the staff of the Joint Economic Committee of Congress advised, nothing that the average U.S. Import tariff was 7 percent. And ocean freight, dear as it was, represented only a fraction of the total cost of moving goods from one country to another. A pharmaceutical company would have paid approximately $2,400 to ship a truckload of medicines from the U.S. Midwest to an interior city in Europe in 1960. This might have included payments to a dozen different vendors: a local trucker in Chicago, the railroad that carried the truck trailer on a flatcar to New York and Baltimore, a local trucker in the port city, a port warehouse, a steamship company, a warehouse and a trucking company in Europe, an insurer, a European customs service, and the freight forwarder who put all the pieces of this complicated journey together. Half the total outlay went for port costs.

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