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had filed with the ICC. The truck line could then propose a lower rate to win the business, but only if it could prove to the ICC that the proposed rate would be profitable. In practice, this meant that a truck line could not underprice its competitors unless it had lower costs. Malcom McLean’s sharp pencil was critical. In 1946, for example, McLean made a deal to lease the routes of Atlantic States Motor Lines, which had been closed down by a strike. Among its other attractions, Atlantic States was entitled to use highways that let McLean Trucking shave seventy miles off runs between North Carolina and the Northeast. The shorter trip meant fewer driver hours and therefore lower rates. By purchasing route authority from Garford Trucking in 1948, McLean Trucking gained southbound cargo from New England, so that trucks that hauled cigarettes north would not have to return empty—which meant that the company could charge less for the northbound trip.8

One hotly contested rate case illustrates McLean’s handle on costs. In March 1947, McLean Trucking proposed to cut certain rates for cigarettes almost by half, charging $0.68 per hundred pounds to haul full truckloads from Durham, North Carolina, to Atlanta, and $1.10 to carry partial truckloads. At the time, other truck lines were charging $1.34 for full truckloads and $1.70 per hundred pounds for partial loads. McLean even wanted to underprice the much slower railroads, which protested the proposed rates as “unfair and destructive.” Laying out its costs in great detail, McLean Trucking argued that tobacco products were cheaper to transport than other commodities because its administrative costs for cigarettes were 1.02 cents per vehicle-mile below its average for all freight, its sales and marketing costs 50 to 60 percent less, and its terminal costs 3 cents per vehicle-mile less than for full truckloads of other freight. After weighing such considerations as the density of tobacco products and McLean Trucking’s insurance claims experience on cigarette shipments, the ICC rejected the proposed rate for partial truckloads but found the proposed full-truckload rate to be “just and reasonable,” opening the way for McLean Trucking to vastly expand its business with the tobacco industry.9

Cost-saving innovations continually materialized as McLean Trucking grew. The company opened one of the earliest automated terminals in the industry, in Winston-Salem, North Carolina, using conveyors to transfer freight from one truck to another while saving labor. At a time when most trucks had gasoline engines, McLean Trucking was the first major company to install diesel engines in its tractors—and in an era when drivers typically bought fuel on their own, Malcom McLean arranged a corporate discount at service stations along the company’s routes and told drivers to fuel only at those stations. The sides of the company’s truck trailers were crenellated, not smooth; Malcom McLean claimed that experts at the University of North Carolina had told him crenellation would reduce wind drag and thus fuel costs. By the early 1950s, McLean Trucking was hiring young university graduates and putting them through one of the first formal management training programs in American business. Men just out of college would come to Winston-Salem, where their first task was learning to drive a truck. After six months of hauling freight, trainees were sent to a terminal and spent several months unloading trucks. Then came a stint in the office, learning the McLean Trucking method for making a proposal to a potential customer, which required careful analysis of the cost of serving the business. Only then were trainees dispatched to their first assignments, usually selling freight in Raleigh or Boston or Philadelphia.10

McLean Trucking quickly became known as a dynamic company in a very stodgy industry. By 1954, it had become one of the largest trucking companies in America, ranking eighth in revenue and third among all truck lines in after-tax profit. Assets, $728,197 in 1946, increased to $11.4 million in 1954 as the