The Box - Marc Levinson [149]
By the end of the twentieth century, the container shipping industry was dominated by a handful of alliances of global scope. These companies’ megaships may have sailed between two ports, but the cargo they carried was increasingly unlikely to have been produced in or to be destined for the end points of the voyage. By deciding where to employ their vessels, the big ship lines had the power to determine which ports succeeded and which struggled. In some cases, that choice was made for unavoidable reasons; not all ports had the depths required to handle the biggest ships. In other cases, though, ship lines joined with government officials and private port operators to change comparative advantage. The list of the world’s largest containerports around the turn of the century is instructive. Of the twenty ports handling the greatest number of containers in 2003, seven had seen little or no container traffic in 1990, and three of those seven had not even existed before.
These new ports, by and large, were privately managed, and in some cases privately financed. Their creation was a deliberate response to the economics of container shipping, in which keeping the ship moving is what matters most. Only the biggest ports are worth a time-consuming stop. The ports that can load the most containers per hour consume less of a vessel’s precious time. Efficient ports, with access to large flows of cargo, will receive large ships and frequent service, with direct sailings to every corner of the world. The massive ports constructed in China, Malaysia, and Thailand during the 1990s were investments in globalization. Factories whose goods use those ports will have the lowest rates and the lowest costs in lost time, saving money on imported inputs and gaining a cost advantage in export markets. Manufacturers in poorer countries, where ports are less busy or less well managed, will find that their high logistics costs make competing in foreign markets a difficult proposition.15
That disadvantage goes far beyond the occasional lost export sale. A country cursed with outmoded or badly run ports is a country that faces great obstacles to finding a larger role in the world economy. If Peru were as effective at port management as Australia, the World Bank estimated, that alone would increase its foreign trade by one-quarter. If it cannot be, it will receive the maritime equivalent of branchline service on a single-track railway. The big containerships that link national economies in the global supply chain, carrying nothing but stacks of metal boxes, will pass it by.16
Global supply chains were not in anyone’s mind in the spring of 1956. Over the next half century, freight transportation developed in ways that could not have been imagined by the dignitaries watching the Ideal-X take on those first containers at Port Newark. Perhaps the most remarkable fact about the remarkable history of the box is that time and again, even the most knowledgeable experts misjudged the course of events. The container proved to be such a dynamic force that almost nothing it touched was left unchanged, and those changes often were not as predicted.
TABLE 6
The World’s Largest Containerports: Containers Handled (Million 20-Foot Equivalents)
Malcom McLean’s genius was acknowledged unanimously: almost everyone save the dockworkers’ unions thought that putting freight into containers was a brilliant concept. The idea that the container would cause a revolution in shipping, though, seemed more than a little far-fetched. At best, the container was expected to help ships recover a tiny share of the domestic freight business and to benefit Hawaii and Puerto Rico. Truckers ignored it. Railroads shunned it. Even as ship lines talked it up, most of them treated