The Box - Marc Levinson [102]
Once the commitment to containerization was made, the transition was swift. Half of military cargo going to Europe was containerized by 1970. Military engineers drafted plans for portable terminals to unload containers in underdeveloped locations on short notice. The army and the navy tested containerization of ammunition by loading containers at factories and shipping them aboard a dedicated vessel to combat units in Vietnam; containers were a perfectly safe way to transport ammunition, the studies concluded, although artillery shells were so heavy that shipping them in containers longer than twenty feet left a lot of empty space. “Containerization cannot be considered just another means of transportation,” Besson told Congress in 1970. “The full benefits of containerization can only be derived from logistic systems designed with full use of containers in mind.” It was a conclusion that shippers in the private sector were only beginning to reach.25
Malcom McLean’s persistence in pushing containerization was vital to the U.S. war effort in Vietnam. Without it, America’s ability to prosecute a large-scale war halfway around the world would have been severely limited. The U.S. military would have experienced extreme difficulty feeding, housing, and supplying the 540,000 soldiers, sailors, marines, and air force personnel who were in Vietnam by the start of 1969. Continual headlines about theft, supply shortages, and massive waste would have caused domestic support for the war to erode even faster than it did. Containerization enabled the United States to sustain a well-fed and well-equipped force through years of combat in places that would otherwise have been beyond the reach of U.S. military might.
Containerization was vital as well to the growth of Sea-Land Service. Defense Department contracts had long been life-or-death matters for U.S.-flag ship lines with international routes. Until 1966 and 1967, when military transportation agencies first put their shipping needs up for competitive bidding, the military’s freight on a given route had been divided up among all the U.S.-flag lines serving that route, guaranteeing every carrier a piece of the pie. The Defense Department’s involvement with container shipping had been minimal, and it had never tendered freight to Sea-Land, even on domestic routes to Puerto Rico and Alaska, because the military was not equipped to use 35-foot containers. Vietnam broke the barrier. From almost nothing in 1965, Sea-Land’s Defense Department revenues rose to a total of $450 million between 1967 and 1973. In the peak year, fiscal 1971, $102 million of Vietnam-related contracts accounted for 30 percent of the company’s sales.26
Like everything else Malcom McLean did, venturing into Vietnam entailed considerable risk in hopes of large reward. The cost and risk of reinforcing the pier at Cam Ranh Bay, assembling the cranes, floating equipment and vehicles across from the Philippines, and building the truck terminals were entirely Sea-Land’s. The U.S. government was liable only for damage to Sea-Land’s trucks and equipment caused by enemy fire. It did not furnish men or material to help Sea-Land get its operations up and running. In a place where replacement parts could not simply be ordered from a nearby distributor, the chance that something would go wrong, blowing budgets and cost calculations, was very high. McLean was running a commercial operation in a war zone, and betting that he could control costs well enough to make a profit from his fixed-price bid.27
The gamble paid off hugely. In return for his willingness to bear risks on the cost side, McLean negotiated contacts that assured