The Box - Marc Levinson [132]
Yet round-the-world service was a risky venture. Traffic flows between different pairs of ports were vastly different; a vessel that might be perfect for loads between New York and Rotterdam could easily be too large between Singapore and Hong Kong. Delays due to a storm, a dock strike, or a mechanical problem could play havoc with schedules intended to have a ship calling at each port on the same day each week. This was no minor problem: Israel’s Zim Line, which sailed from America’s Atlantic coast through the Suez Canal to America’s West Coast—the closest thing to a round-the-world container service in 1980—arrived within one day of schedule on only 64 percent of its trips and was more than a full week late one trip in seven. If shippers were to decide that a standard point-to-point service was more likely to run on schedule than one circumnavigating the globe, round-the-world ships might find themselves hard-pressed to attract freight. In the face of these risks, Sea-Land gave up its plans to sail around the world.
Two of its major competitors did not. One was Evergreen Marine. Evergreen, founded as a tramp company by the ambitious Taiwanese entrepreneur Chang Yung-fain 1968, had become a major operator across the Pacific and on the Far East-Europe route, undercutting conference freight rates to gain traffic. In May 1982, Evergreen ordered 16 containerships from yards in Japan and Taiwan at a cost of $1 billion and announced that it would run round-the-world services heading both east and west. The vessels, originally planned to carry 2,240 20-foot containers, were soon redesigned to hold 2,728. Chang called these vessels his “G-class” and named them accordingly: Ever Gifted, Ever Glory, Ever Gleamy. They would steam at 21 knots, fast enough that each of the 19 ports of call would see an Evergreen ship in each direction every 10 days. Evergreen’s ships would circumnavigate the world in 81 days east-bound, 82 days going west.17
The other competitor in the race around the world was an equally self-confident shipping magnate, Malcom McLean. In 1982, his U.S. Lines placed orders for 14 gigantic containerships. By building at Korea’s Daewoo shipyard, the company forfeited any rights to U.S. government construction subsidies but won the freedom to deploy the vessels where it chose, without government involvement. Each new ship could carry the equivalent of 4,482 20-foot boxes, half again as much as Evergreen’s G-class vessels. The ships were wide, flat, and utilitarian, designed—in the words of their architect, Charles Cushing—to look “much like a big shoe box above the water.” McLean’s strategy was different from Chang’s. His ships would circle the globe only in an eastbound direction, and they would do so slowly. McLean had learned from his mistakes with the speedy SL-7s, whose fuel bills ate up all their profits. The new ships were built for an era of expensive oil. They would conserve fuel by sailing at only 18 knots, taking longer than Evergreen’s vessels to sail around the world.18
McLean dubbed his new vessels Econships, because their fuel economy, along with the scale economies created by their enormous size, would produce the lowest cost per container of any ships anywhere. The ships alone cost $570 million. McLean’s new, publicly traded holding company, named, like its predecessor, McLean Industries, had no