Saturday, November 28, 2009

"The Box" and "The Colombo Bay" Offer Complementary Perspectives on Containerized Shipping

Among the many life-changing twentieth-century inventions, one of the simplest is often overlooked: the shipment of freight in metal containers with standard dimensions and attachment mechanisms. Before trucking entrepreneur Malcom McLean conceived of containerized shipping, it had certainly been tried in different forms.  McLean's innovation, however, was an intermodal system of ships, trains and trucks, all of which could handle containers that remained intact for their entire journey.  In 1955, McLean sold his trucking company and used the proceeds to purchase a steamship line and a terminal company in order to establish the first containerized shipping service.  On April 26, 1956, a converted World War II tanker sailed from Newark, NJ for Houston carrying 58 containers along with its standard liquid cargo.  

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by economist Marc Levinson explains the economic and social effects of containerized shipping over the fifty years between its inception and the book's publication in 2006.  The elimination of the labor-intensive transfer of cargo between trucks and freight cars, transit sheds, loading docks and ships drastically reduced the cost and complexity of shipping along with transit times, unexpected delays, and cargo theft.   This, along with other factors such as tariff reduction, enabled the migration of manufacturing activities to where they could be performed most cheaply.  Modern supply chains often involve multiple trips by container between suppliers of raw materials, component manufacturers, final assemblers and distributors or massive retail chains.  

Containerization has also changed the nature of port cities.  When breakbulk shipping predominated, the docks bustled with human activity, since large crews of longshoremen were required to unload ships.  Longshoremen's unions became powerful, often negotiating contracts with inefficient and inflexible work rules.    Organized crime often permeated the docks.   In addition, ports were filled with seamen, who waited weeks or months while their ships were unloaded and reloaded.   Many businesses and organizations served the needs of these longshoremen, seamen and their families, contributing to vibrant port communities. 

Today's major container ports, however,  are massive, highly optimized and automated distribution centers.   As soon as a ship docks, massive gantry cranes  unload containers onto trailer chassis.  The containers are quickly hitched to road tractors or placed on single or double-stack freight trains and sent off to their destination.  The ships spend only a day or two in port.   Even if some of the crew manages a quick shore leave, there won't be much of a crowd in port.  The world's largest container vessel, the Emma Maersk, launched in 2006, has a crew of only 13!

Instead of bustling communities,  today's major container ports are analogous to Internet Exchange Points.  The predominant activity around them is the constant switching and routing of freight "packets" in containers.   The optimal locations for shipping and receiving facilities are those that have  high-capacity, reliable, low-latency container port "connectivity" via road or rail to a major container port.    

The Colombo Bay covers the 2001 trip by Richard Pollak on a container ship of the same name.    Pollak, a self-described "landlubber" gets the urge to go to sea in his early sixties.  A shipping executive friend, arranges a five-week passage from Singapore to New York via Thailand, Singapore, Sri Lanka, the Suez Canal and Malta.  Pollak begins his trip just after the terrorist attacks of 9/11.  This book is a leisurely and thoughtful travelogue, with shipboard events and personalities intermingled with brief background on containerized shipping along with many of the issues facing the global merchant marine.   Pollak discusses the loneliness and historical mistreatment of seamen which continues to this day, especially on registered under laissez-faire flags of convenience.  He also discusses the continued relevance of the writings of Herman Melville and Joseph Conrad; piracy; human smuggling in shipping containers; as well as the technical, financial and political challenges of ensuring that millions of containers are not used to deliver explosive or radioactive payloads.   

Pollak's journey, though, is safe, convivial and uneventful, and his story suggests that the merchant marine is still attractive to some.  Some time after his journey, the author and his wife travel to England to visit Peter Davies, the Colombo Bay's captain for most of Pollak's five-week voyage.  Davies had been encouraged to retire by his former employer as a cost-cutting measure.  Unhappy in retirement, Davies has just been hired, at age 58, by a German firm to captain another container ship, and happily anticipates his next voyage.

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