The Box - Marc Levinson [104]
The first to try was Matson Navigation. In February 1966, Matson won U.S. government approval to operate an unsubsidized freight service between the West Coast, Hawaii, and the Far East. The company’s management had visions of fast ships racing across the Pacific with television sets and wristwatches, discharging cargo at Oakland directly to special trains that would carry it east. On the return trip, there might be military cargo for the U.S. bases in Japan and South Korea. The key assumption was that Matson would have two or three years to capture the business of Japan’s leading exporters before other ship lines entered the market. Matson sent two of its C-3 breakbulk ships to a Japanese shipyard to be converted into self-unloading ships able to carry 464 containers and, in recognition of Japan’s rapidly growing auto exports, 49 cars. It ordered two high-speed containerships in Germany for delivery in 1969. To encourage Japanese customers, it entered a joint venture with a Japanese ship line, Nippon Yusen Kaisha (N.Y.K. Line). In September 1967, before a single container crane was operating in the country, Matson began service to Japan.32
Competitors were not far behind. In January 1968, four Japanese ship lines signed leases for container berths in Oakland. In March 1968, the same month that army officers in Vietnam were ordered not to ship cargo back to the States via Sea-Land, Sea-Land announced that it would provide weekly sailings from Japan.
Like almost everything else connected with Malcom McLean, Sea-Land’s entry in Japan stemmed more from instinct than from analysis. “We’ve got these empty ships coming back from Vietnam,” former Sea-Land executive Scott Morrison recalled. “So we have a meeting, and Malcom says, ‘Anybody know anybody at Mitsui?’ “McLean handed around the Japanese trading company’s annual report and announced that he wanted to fly to Tokyo to meet its president. Two weeks later, a huge delegation from Mitsui was touring Sea-Land’s docks at Elizabeth. Malcom McLean wanted nothing to do with joint ventures, but he hired a Mitsui group company to build Sea-Land a terminal in Japan. Another Mitsui company agreed to be Sea-Land’s agent, and a third agreed to handle domestic trucking within Japan. With its ship operating costs fully covered by its military contracts for Vietnam, Sea-Land was guaranteed to make money no matter how little cargo it picked up in Japan.33
The first Japanese containership, owned by Matson partner N.Y.K. Line, completed its maiden voyage to America in September 1968. Six weeks later, having been duly admitted to the transpacific conference, Sea-Land began six sailings a month from Yokohama to the West Coast, its ships laden with televisions and stereos produced by Japanese factories. Other Japanese carriers entered as well. The Japan-West Coast route, which had no commercial container service at all before September 1967, was suddenly crowded with ships needing to be filled. Seven different companies were competing for less than seven thousand tons of eastbound freight each month by the end of 1968, and more were about to join. The lack of business proved to be only temporary. The cargo would soon come, in a flood that no one imagined.34
Chapter 10
Ports in a Storm
The Coastwise Steamship Company had been created to serve the paper industry. Since the 1930s, its ships had picked up rolls of