The Box - Marc Levinson [121]
Exports from Taiwan, $1.4 billion in 1970, were $4.3 billion by 1973, and imports more than doubled. The pattern in Singapore was much the same. In Australia, the opening of container traffic coincided with a surge in manufactured exports and a dramatic shift away from traditional exports such as meat, ore, and greasy wool. The volume of exports other than minerals or farm products rose 16 percent annually from 1966–67 to 1969–70. Prior to 1968, the value of Australia’s industrial exports typically came to less than half its exports of grain and meat. By 1970, most of Australia’s general-merchandise trade was already moving in containers, and factory exports nearly matched farm exports. In the process, Australia left behind its past as a resource-based economy and began to develop a much more balanced economic structure.15
The container cannot claim sole credit for this burst of international commerce, but it is entitled to a share. A 1972 study by McKinsey & Company, an international consulting firm, laid out some of the ways in which containerization stimulated trade between Europe and Australia, where containers came into use on mixed vessels in 1967 and fully containerized ships opened service in 1969. Previously, Australia-bound ships had spent weeks calling at any of eleven European ports before starting the southbound voyage. Containerships collected cargo only at the huge containerports at Tilbury, Hamburg, and Rotterdam, whose enormous size kept the cost of handling each container low. Previously, shipments took a minimum of 70 days to get from Hamburg to Sydney, with each additional port call adding to the time; containerships offered a transit time of 34 days, eliminating at least 36 days’ worth of carrying costs. Insurance claims for Europe-Australia service were running 85 percent lower than in the days of breakbulk freight. Packaging costs were much lower, and ocean shipping rates themselves had dropped. The total savings from containerization were so great that traditional ships abandoned the Australia route almost immediately.16
The breakneck construction of new containerships transformed the world’s merchant fleet. In 1967, 50 American-owned vessels, most of them built during World War II and rebuilt during the 1950s or 1960s, accounted for all but a handful of the fully containerized ships in operation around the world. From 1968 through 1975, no fewer than 406 containerships entered service. Most of the new vessels were at least twice as large as any that had been on the scene in 1967. Beyond these fully containerized vessels, ship lines added more than 200 partially containerized ships, with container cells built into some of their holds but not others, and almost 300 roll on-roll off ships to serve routes that lacked the volume to justify containerships. With these hundreds of new vessels, container shipping was coming into full flower.17
The U.S. merchant fleet changed almost overnight. In 1968, there were still 615 general-cargo freighters flying the U.S. flag. Within the next six years, more than half of those vessels had left American-flag service, either cast off to the tenuous ship lines of poor countries or sold for scrap. Replacing them were fewer but much larger and faster ships. The American seamen’s unions were wont to cite the diminished fleet as a sign of maritime weakness, but the truth is that the few dozen new containerships could carry far more cargo than the hundreds of rust buckets they supplanted. Even as the U.S.-flag fleet shrank nearly by half, the number of vessels able to carry more than 15,000 tons of cargo rose from 49 in 1968 to 119 in 1974. New steam-turbine engines helped boost the average speed of large U.S.-flag freighters from just 17 knots in 1968 to 21 knots in 1974. The difference was enough to cut a full day off a transatlantic crossing.18
The launch of so