Friday, June 01, 2018

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger

The humble shipping container helped to usher in giant changes in the world economy. Box does an excellent job of presetning the history of the container. However, the writing at times seems to jump around, perhaps attempting to provide too many facts at once. Prior to the adoption of a standard container, the cost of loading and unloading a ship could exceed (in time and expense) the cost of transporting the good across the sea. There was little incentive to use larger or more efficient ships because they would just be bogged down in port. Containerization attempts were started with railroads. However, these ended up getting held back due to regulation. (The railroads were not allowed to charge cheaper rates even though the containers added to economies of scale.)
when a ship arrived in port, a large group of laborers was needed for the work of unloading and loading. However, this work was not very regular, and the wages paid could change based on supply and and demand on both sides. This opened things up to bribes, and later unionization (which was often along ethnic lines.) One union controlled west coast ports, while another controlled the east coast. By having a stranglehold on all port traffic, the unions were able to exert greater control than other unions. When containers threatened to reduce the labor needed for handling ships, the longshoremen negotiated significant benefits for themselves. (In essence they would "share" the benefits of containerization.) It is scary the impact that a single union could have. The unions only reluctantly accepted the progress of the container and had done their best to delay their inevitable.
Railroads too engaged in stupidity at the dawn of the container. They preferred using their boxcars rather than shipping containers. They were ideally situated to transfer containers from the ports to inland locations. However, they did what they could to not get that traffic, thus hampering their own viability and giving significant advantage to long range distance trucks.
The military initially had its own small version of containers. However, the logistic challenge that was Vietnam encouraged them to adopt the standard commercial container.
The container encouraged big container ports, often at the expense of small ones. Instead of smaller ships calling at many ports, a massive container ship would run between a couple ports. In most cases, it was major ports that expanded to be the container behemoths. However, there are some that came out of nowhere to dominate container traffic. One of the most interesting was the port of Fleixstowe in Britain. It was a privately owned backwater port not organized by the union. While the union was busy battling out with London-area port, Flexistowe built up support for container traffic and came to become the prime container port before the unions could work out their differences with the other ports.
Container traffic enabled cheap reliable transportation of good around the world, and thus encouraged just in time manufacturing. I wonder why something similar has not been tried for transportation of humans? What if we got in our pod that then whisked of to the train station, connected us to the airport, flew us across the ocean, and then took us to our destination. We could enjoy the comfortable journey without the slog of transferring between multiple modes. Could we find a way for people transit to work the same way as goods transport?

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