The Box - Marc Levinson [107]
The most dramatic change, though, occurred in Oakland, on the east side of San Francisco Bay. Through the start of the 1960s, Oakland was a sleepy agricultural port one-third the size of Long Beach, Seattle, or Portland, and far smaller than San Francisco. Its water-front was lined with industries—a dog food plant, a dry ice plant, a brake shoe factory—that had long since ceased to be important port users. Oakland had almost no incoming traffic; typically, European ships would arrive at San Francisco, unload, and then sail across to Oakland to take on canned fruit, almonds, and walnuts for the voyage home. The Oakland Port Commission, a city agency, had issued its first revenue bonds in 1957 to repair a few old docks, but it had no grander plans. Then came an unexpected development. Officials in San Francisco, where Matson had based its container service to Hawaii, ignored Matson’s request for a separate container terminal, because the city’s port director thought container shipping a passing fad. When Matson installed the world’s first land-based container crane in 1959, it was built not in San Francisco, the West’s greatest maritime center, but in Alameda, a small city within plain view of the Oakland docks.9
Matson’s operation focused the attention of Oakland port officials on container shipping. In early 1961, they learned of American-Hawaiian Steamship’s application for government subsidies to build a fleet of large containerships. The vessels would run through the Panama Canal, mainly carrying fruit and vegetables from California canneries to East Coast markets. This was a natural cargo for Oakland to capture. Port director Dudley Frost and chief engineer Ben Nutter prepared two binders of facts and figures, added leather covers stamped “American-Hawaiian Steamship Company,” and flew east in April 1961. Meetings with government and industry officials in Washington changed their plans. “Somebody said, ‘Oh, forget those guys. They’re no good. Go and see Sea-Land,”‘ Nutter recalled. “I said, ‘Sea who?’ “The cover on one of the binders was quickly replaced by one stamped “Sea-Land,” and Frost and Nutter made their way to Port Newark. A Sea-Land executive stopped their presentation to inform them that it had already decided to run containerships from Newark to California. If they could offer a suitable site at a reasonable price, Sea-Land would establish its northern terminus at Oakland.10
Oakland had never hosted a containership, but it immediately began to promote itself as a future containerport. Nutter dreamed up a lease very different from the norm of so many cents per ton: Sea-Land would pay a minimum fee high enough to cover the cost of building its terminal and would pay more as its tonnage rose, but beyond a certain point there would be no additional charge. That “mini-max” provision gave Sea-Land an incentive to pump cargo through Oakland, because once its tonnage exceeded the upper limit, its average port cost per ton would plummet. Oakland spent $600,000 to upgrade two berths, and the federal government agreed to deepen the harbor from 30 to 35 feet to permit larger containerships in the future. In September 1962, Sea-Land’s Elizabethport, the largest freighter in the world, steamed through the Panama Canal to call at Long Beach and Oakland.11
The West Coast ports already had more than doubled their annual investment over the span of two years, and the competitive battle had barely begun. Oakland, with two railroad yards right next to the port, appeared to have the edge. Los Angeles countered with another bond issue in 1962, this time for $14 million. Then the adjacent port of Long Beach reemerged. Long Beach had struggled through the 1950s after the pumping of oil from beneath the harbor caused the harbor floor to subside and docks to collapse.