The Box - Marc Levinson [128]
Ship lines responded to the imperative of scale by extending their reach. The old breakbulk companies had often been content to serve a single route. In 1960, no fewer than twenty-eight carriers had sailed the North Atlantic, from the mighty Cunard Line to such one-ship minnows as American Independence Line and Irish Shipping Limited. In the container age, minnows could not survive, and the truly big fish, companies such as Sea-Land, U.S. Lines, and Hapag-Lloyd, wanted to be in every major trade, either with their own ships or with an arrangement that allowed them to book space on someone else’s. The more ships they had, the more ports they served, the more widely they could spread the fixed costs of their operations. The more far-flung their services, the easier it would be to find loads to fill their containers and containers to fill their ships. The broader their networks, the more effectively they could cultivate relationships with multinational manufacturers whose needs for freight transportation were worldwide.3
Ocean carriers added 272 containerships to their fleets between 1976 and 1979. Four times during the 1970s, worldwide container shipping capacity increased by more than 20 percent in a single year. Total cargo capacity aboard containerships, 1.9 million tons in 1970, reached 10 million in 1980, not counting the tonnage of vessels designed for a mix of containers and other freight.4
The quest for scale brought not just more ships but bigger ships. The Fairland, the first Sea-Land ship to cross the Atlantic in 1966, was only 469 feet long. The purpose-built containerships of the late 1960s were about 600 feet from stem to stern, and the fast vessels launched in 1972–73 were as much as 900 feet long and 80 feet wide, with drafts of 40 feet. At that point, containership design seemed to be approaching its limits. The locks of the Panama Canal, through which almost all traffic between Asia and the Atlantic coast of North America had to travel, are 1,000 feet long and 110 across, and bigger ships would not fit. The oil crisis, which caused so many financial problems for ship lines, unexpectedly brought relief. Shipowners decided to build slower vessels to save fuel: the average speed of newly delivered containerships dropped steadily from 25 knots in 1973 to 20 in 1984. Naval architects were no longer forced to design streamlined shapes to help achieve high speeds, and could concentrate instead on increasing payloads. Without getting much longer, vessels got much larger. The ships entering service by 1978 could hold up to 3,500 20-foot containers—more than had entered all U.S. ports combined during an average week in 1968.
These Panamax vessels—the maximum size that could fit through the Panama Canal—could haul a container at much lower cost than could their predecessors. The construction cost itself was lower, relative to capacity: a vessel to carry 3,000 containers did not require twice as much steel or twice as large an engine as a vessel to carry 1,500. Given the extent of automation on board the new vessels, a larger ship did not require a larger crew, so crew wages per container were much lower. Fuel consumption did not increase proportionately with the vessel’s size. By the 1980s, new ships holding the equivalent of 4,200 20-foot containers could move a ton of cargo at 40 percent less than could a ship built for 3,000 containers and at one-third the