The Box - Marc Levinson [150]
The economics of container shipping were equally treacherous for ship operators themselves. Many ship lines sacrificed the potential advantages of containerization by ordering vessels that carried containers along with other types of cargo or even passengers. Others guessed wrong about how big their ships or their containers should be. McLean himself went badly astray several times: he ordered fuel-guzzling SL-7s just ahead of the 1973 oil shock, built the sluggish but fuel-efficient Econships just as fuel prices plummeted, and sailed the Econships on a round-the-world route that left some legs heavily booked but others operating well below capacity. The “experts” who deemed container shipping uncompetitive on long routes, such as those across the Pacific, were proven to be wildly off course, and Asia’s containerports, filled with boxes destined for North America and Europe, soon became the largest in the world.
Haste, contrary to what many in the shipping industry had assumed, was not a prerequisite for survival in the container era. Matson, previously active only in U.S. domestic trades, raced to become the first line to carry containers across the Pacific in the belief that an early start would assure it loyal customers; as it learned when other companies rudely barged into the business, customer loyalty counted for little. Moore-McCormack may have been the first line to carry containers across the Atlantic, but it could not turn that head start into a viable business. Nor did Grace Line’s role as the first container carrier to South America make it a survivor.
The companies that emerged as the world’s largest containership operators in the early twenty-first century were relative latecomers to the game. A. P. Møller’s Maersk Line built its first containership only in 1973, seventeen years after the Ideal-X and seven years after container shipping came to the North Atlantic. Mediterranean Shipping Company, based in Switzerland, did not even exist until 1970, and Evergreen Marine was founded only in 1968. These companies arrived with financial and managerial skills foreign to many of the carriers they replaced, skills appropriate to an industry in which raising capital and managing information systems were far more important than maritime knowledge. They operated without the legacy of government subsidies and directives that had crippled many of their predecessors by forcing them to buy ships built in their home countries or to sail routes determined by regulators. In an industry that almost everywhere wrapped itself in nationalist pride, the long-term survivors were profoundly international. Maersk’s headquarters were in Denmark, but by 2005 it had gained control of more than five hundred containerships and one-sixth of the world market by absorbing companies as diverse as Britain’s Overseas Containers Ltd., South African Marine, the Dutch shipping giant Nedlloyd, and Malcom McLean’s old company, Sea-Land Service.
If the market repeatedly misjudged the container, so did the state. Governments in New York City and San Francisco ignored the consequences of containerization as they wasted hundreds of millions of dollars reconstructing ports that were outmoded before the concrete was dry. The British government’s planning efforts led to the costly creation of new ports; officials never dreamed that a privately