Be informed

I come from a port city. When I was growing up in the 1970s, the Dockers seemed to be a protected species. They seemed well-off (a relative concept) and always at home. They were on strike often. The history of dock workers and their fight against exploitation through casual labour has been told, but I was not aware of it as a child. I inherited the prejudices against feckless dock workers. Levinson, however, confirms that in England, pay gains by dockers in the 1950s were “robust”. So much so that they earned 30 per cent more than the average male by the 1960s. This is precisely the period of my growing up.

The history of life on the “waterfront” is revisited by Levinson as he chronicles the economic and social history of the shipping container. There’s a paradox. One function of the shipping container mirrored that of the steam engine in capital’s fight with labour. It handed power to plutocrats and oligarchs who owned the specialised ports whilst simultaneously, making the work of dock workers – or those who were left – much safer (docking at its height was more dangerous than construction).

Without the shipping container, globalised supply chains would not have been possible. Prior to containerisation, the Waterfront was a huge cost to exporters and importers. Loading and unloading required a lot of men; and it was skilled, too. A badly loaded ship could capsize. Containerisation brought shipping costs down, considerably. So much so, that it became almost costless – a fraction of the overall costs of production. It enabled a true Ricardian revolution of comparative advantage. Of course, the externalities don’t feature. The use of dirty and carbon-laden fuels in ships is on no ledger.

Levinson details the machinations of port employers, unions and shipping companies. It is a story of men with egos – union leaders in New York and New Jersey on the east coast, and their counterparts on the west coast (LA and San Francisco). It is a tale of rejecting mechanisation and fraught negotiations (and strikes) over how many men not only each ship needed to be unloaded, but how many men per hatch. There’s a huge cast of sometimes unsavoury characters to keep track of. It is a story of demarcation – labourers vs crane drivers – and the difference between negotiating to get the best compensation for members’ job losses and negotiating to keep all men in work (on the west coast, the union negotiated a compensation scheme that enabled many men to retire, which was a most welcome opportunity after a life of hard dock labour). It’s a story of competitive politics resulting in public investment in NY Harbor’s piers and creaking and congested supporting infrastructure by politicians trying to maintain their own privilege but failing to see that the future was different and the investment was misplaced. Because all the while, the shipping companies – two in particular – were developing their own docking facilities on virgin land for the logistics of international containerisation.

There was a huge problem, however, preventing the diffusion of containerisation globally. There were no standards. There were firms that had invested in their own standards such as Sea-Land in New York, owned by one of America’s most iconic of entrepreneurs, Malcolm McLean, who constantly outflanked competitors, legislators and dock workers. McLean’s success was one of ad hoc decisions. “Find me someone who can design and build me a crane in 3 months” sums up this approach. By contrast, a west coast shipping company, Matson Navigation Company, a transportation and sugar conglomerate, took a very scientific approach under its President, John E. Cushing. Cushing brought in a university professor to consider holistically the business of containers – from the containers themselves, their loading, fitting, hauling, lifting, to the ships that would carry them and the trucks that would haul them. To use Levinson’s words “Matson moved deliberately. Pan Atlantic [Sea-Land’s original name], under McLean’s control, was a scrappy upstart building a brand new business, and it risked little by acting quickly.” (p80).

Standards

An upstart though McClean may have been, he did patent his design for a fitting device that locked containers into place in ships, on trucks or next to one another. If agreeing on a standard size of containers was not painful enough involving a cast of technocrats from organisations such as the ISO, The American Standards Association, The National Defense Transportational Association, The United States Maritime Administration (Marad), the fittings debate was fraught. These standards-setting bodies locked horns with the transportation firms and manufacturers of trailers such as Fruehauf – still a familiar name – Strick Trailers and the National Castings Company. The outcome was a classic fudge because an international standard had to reconcile global differences, whilst enabling firms that had already invested in containers not to lose too much money in converting their existing operations. McLean released his patent. It was then hastily modified over two days in Utrecht where the drawings for the final fittings were made in preparation to be presented to the ISO committee meeting in The Hague on 24 September 1965. That was not quite the end of the story. The new standard had never been tested, so when used on ships or trains they failed. Another group of engineers were needed to add strength to the design. In June 1967, the new design was approved much to the chagrin of existing transportation firms that had invested heavily in the old standard. Lesson – don’t approve standards in haste.

There’s more on standards, but not for this review. I had not realised just how much regulation the freight industry was subject to in the USA at this time. Freight bosses had to be as adept at navigating these restrictions as they did the roads and waterways. There were regulators trying to enforce “fairness”, operators trying to work with and around them, and politicians intervening. The rail companies were hidebound by both regulation and non-standardised gauges. But there were innovations, some of which still run today. A number of these companies rejected containers and provided unique services. The Trailer Train, for example, was an innovation in putting truck trailers on trains. It was run by the Pennsylvania Railroad between Chicago and St Louis starting in 1954. It also innovated in inviting all other rail operators to join creating economies of scale and a standardised operation including revenue collection and sharing. As is ever for these operators, they had legacy stock – boxcars, in particular – that would be redundant if containers were adopted.

In Europe, rail operators were keen to facilitate containerisation. In the UK, British Rail sought to develop freight out of Felixstowe; German and French national rail operators out of Bremerhaven. Rotterdam and Antwerp, were also developing their container operations. Seemingly containers bound for the United States were full of whisky!

And then something I had not really thought about, but troubles me as I write. Malcolm McLean’s success – like many of his ilk – was built on amorality. Business is business. What is legal is to be pursued. In the early years of the container revolution, the Vietnam war was ramping up. With 60 thousand soldiers in the country, the supply lines were vitally important. Vietnam had very poor infrastructure and only a single deep port, Saigon. Military logistics were struggling. McLean said he could he help. McLean transformed the fortunes of a second deep port, Cam Ranh Bay. Before McLean arrived, US military logistics had towed a DeLong pier – a whole 300ft pier – from North Carolina through the Panama Canal and across the pacific to be sunk into the bay. It was then re-inforced to support McClean’s monster cranes, suitable for lifting containers full of armaments and, separately, refrigerated foods.

The operation was hugely profitable for McLean, made more profitable when McLean opted to return to the USA via two Japanese ports, Tokyo/Yokohama and Osaka/Kobe to fill empty containers with consumer electronics. This was, apparently, a typical McLean venture – off the cuff. He is alleged to have simply said, “does anyone known anyone at Mitsui”? Two weeks later, a delegation from Mitsui was inspecting the Sea-Land docks in Newark, New Jersey. Profit and business notwithstanding, Levinson is bold enough to state that without McLean a sustained war effort by the US in Vietnam would have been unlikely. Knowing what we know now, that would perhaps have been a good thing? McLean actually enabled and prolonged the war.

McLean was also behind the development of one of England’s foremost container ports, Felixstowe. Similar to Sea- Land’s development of the container facility in Newark, NJ, Felixstowe was not encumbered by union agreements. it was a small and private wharf dealing with grain and palm oil. In 1966, Sea-Land reinforced the wharf and built a container crane at the fraction of the cost of the Tilbury (London) docks. By 1969 it was the 9th biggest container port (by volume) in the world. Leading the way in Europe was Rotterdam with its deep water, co-operative labour unions and necessary post-war reconstruction.

Supply chains – just-in-time delivery

The shipping container was a driver of globalised supply chains. For as long as shipping costs were high, cheap labour and other resources could not realistically be harnessed. As shipping containers got bigger and ports enabled “inter-modality” and computerised loading and unloading, the unit costs of each container went down, driving trade, economic growth and consumption. The containers became mobile warehouses rendering inventory stock outdated. And one-time empty containers being returned found themselves full of commodities such as soya and even grain. We are also at liberty to think about all of the waste – often public – associated with building container ports. Many were developed without tenants – and never got any. Others did, but tenants migrated to other ports with better facilities or access. These were all paid for by taxpayers. Our consumer products could have been even cheaper had ports and regions not speculatively competed with one another.

Climate

Whenever I read books and non-fiction in particular – I am on the look out for environmental factors; acts that become normalised and pushed back nature. Sea-Land’s enormous container operation in Newark, NJ, is a case in point. I have subsequently viewed the area courtesy of Google. It even has a massive Amazon warehouse on it. The development was described in a very matter-of-fact way. The marshland that it colonised was “waste”. Though we know now that it was probably rich in wildlife that was displaced by the development. However, maybe there is a slip of the pen on page 263 in reference to Oakland, CA:

“…a timely $10 million grant from the federal Economic Development Administration, intended to generate jobs in the depressed city, supplied construction funds. A new terminal was rushed into construction, without a tenant, before new environmental regulations took effect.”

I say “slip of the pen” because I cannot gauge whether Levinson thinks that beating the regulation was a good move or not. Certainly if the development was assumed to have violated forthcoming environmental regulations, then it was not good. And those behind it, knew it. That is a story of environmental destruction, the world over through time. Those who do it, know what they are doing. They know what the impacts are, and they still do it.

The only silver-lining I could find was – cutting a long story short – McLean invested also in land. One piece of land was bought to turn into an intensive pig farm. When the shipping going got tough, the land had to be sold, it is now a park. No pigs.

Levinson’s book is one of these master works. it needed to be written. And it was done well. It is a social history told through the development of a familiar artefact. We are all part of its story and we of it’s. A metal box.

Pictures:

Ever Given By Robert Schwemmer for NOAA’s National Ocean Service – Flickr: Container Ship, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=19073448