The Box - Marc Levinson [26]
Heavy indebtedness, of course, was risky. Any slowdown in revenue growth could make it hard to service debt. Of necessity, a highly leveraged company had to focus on efficiency, for which Malcom McLean and his brother Jim, who ran day-to-day operations, had a passion. They knew every aspect of their business, and they knew how to squeeze out costs. Recalls one former employee, “When you reported for duty, you drove the truck through the gatehouse, you were weighed, and the truck was sealed. They started the tachometer, and you were given specific directions: ‘You will proceed up Route 3A to Secondi’s filling station, then you will proceed …’ You didn’t have any discretion at all.” But after years behind the wheel themselves, the McLeans understood that the easiest way to control costs was to get employees involved. Holding down insurance and repair bills, for example, meant having safety-conscious drivers. Novices were trained by being paired with senior drivers on the run from Winston-Salem to Atlanta. The senior driver got a bonus of one month’s pay if a man he had trained made it through his first year without an accident. The incentives were powerful: the veteran had a strong financial incentive to train the newcomer well, and the new driver understood that he had best drive very carefully if he wanted to stick around.12
Malcom McLean was not a man to sit and enjoy his success. The civic and philanthropic involvements common to successful businesspeople did not interest him. He was a restless soul, competitive, calculating, always thinking about business. “He wouldn’t be able to sit still five minutes,” a longtime colleague recalled before McLean’s death. “You’d either have to play gin rummy with him or discuss business with him. Can’t go quail hunting with Malcom without him betting on the first, the most, the biggest.” His inventive brain churned out idea after idea for making money.13
One such brainstorm came in 1953, as McLean was fretting over increasing highway congestion and worrying that domestic ship lines, able to buy war-surplus cargo ships from the government for almost nothing, might undercut his trucking business. Rather than driving down crowded coastal highways, why not just put truck trailers on ships that could ferry them up and down the coast? By the end of that year, McLean was proposing to build waterfront terminals that would allow trucks to drive up ramps to deposit their trailers on board specially designed ships. The ships would move the trailers between North Carolina, New York City, and Rhode Island, circumventing the worsening traffic jams at a time when expressways were few and far between. At the port of arrival, other trucks would collect the trailers and haul them to their destinations.14
In the context of the 1950s, McLean’s plan was revolutionary. Law and regulation ensured that trucks and ships had nothing in common: trucking companies ran trucks, and shipping companies ran ships. A few ship lines and barge companies carried trucks on their vessels, as McLean planned to do, but they were simply offering water transportation to any trucker who would pay. The idea that a truck line would use its own trucks to drive its own trailers on board its own ships, float the trailers down the coast, and then drive them to their destination at the other end violated the ICC’s basic precepts. The truck-ship plan was startling as well because coastwise shipping was widely seen as a dying business. New York’s