Monday, March 20, 2006

Back inside the box: A significant anniversary

Next month is the 50th anniversary of a truely significant economic event. On the 26th April, 1956, a converted tanker was loaded with 58 modified, 35 foot truck containers and sailed from Newark (NJ) to Houston (TX). It was significant for two reasons. First, the containers had been filled and sealed inland, loaded on trucks and loaded onto the deck of the ship without being refilled. Second, the whole process involved a single contract.

Thus began the containerisation revolution. Malcolm McLean who bet his trucking fortune on this founded Sealand; the major cargo shipping company of the next 50 years.

I became interested in the container as an innovation about 15 years ago when sitting in class taught by Nathan Rosenberg (on the history of innovation). He commented on the widespread impact of containerisation but the fact that the innovation was simple; "just a box." I was sceptical that simplicity could lead to such revolution and set out to investigate.

The results of my investigation were published in 1995 in Prometheus. Here is a link to the paper. And the answer: well it wasn't so simple. There was alot to do to make containerisation profitable. Ships had to be redesigned (the first was introduced in Australia in 1964). Contracts had to be re-written. Ports need overhauling. Unions needed busting. Logistics and reinforced steel had to be invented. And finally, a tipping point had to be reached. So it wasn't "just a box" at all.

When I wrote my paper, not much had been written about the container. It took me a little time to attribute the whole innovation to Malcolm McLean. Next month a new history by Marc Levinson, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, will be published by Princeton University Press. I can't wait.

1 comment:

Christopher said...

And today's Economic Scene in the New York Times also covers the book.