The Box - Marc Levinson [36]
The contrast with Pan-Atlantic could not have been more stark. McLean’s engineers, people like Keith Tantlinger and Robert Campbell, were no intellectual slouches, but they had worked in industry, not academia, and they were well advised not to flaunt their pedigrees in public. Weldon was a professor at the prestigious Johns Hopkins University in Baltimore and a well-known figure in the new science of operations research, the study of efficient ways to manage complex systems. Pan-Atlantic’s initial technology had been designed on the fly, using obsolete tanker ships, shipbuilding cranes, and containers whose length was determined by the size of the tankers, on the assumption that it could all be improved once the business was up and running. Weldon found this catch-as-catch-can strategy bewildering. “All transportation companies have their own pet theories on the detailed equipment requirements comprising a ‘best’ container system, but there are no quantitative data relating even such gross characteristics as container size to the economics of a total transportation operation,” he wrote pointedly. His goal, as he defined it, was to develop good data and use them to find the optimal way for Matson to embark upon container shipping.11
Weldon quickly came upon the issues that would shape Matson’s approach. About half of the company’s general cargo was suitable for shipment in containers, but the flow was out of balance: for every ton the company shipped from Hawaii to the mainland, it shipped three tons from the mainland to Hawaii. Revenues from the westbound run would need to cover the cost of returning large numbers of empty containers west to east. Even worse, much of Matson’s business came from food processors in California sending small loads to mom-and-pop grocery stores in the islands. Matson would need to consolidate these small shipments to fill whole containers in California, and would then have to open the containers in Honolulu and parcel out the loads for various destinations. This would make container shipping expensive. On the other side of the equation, though, Weldon found that by eliminating the need to transfer individual pieces of cargo from trucks to ships and back again, containers would eliminate almost half the cost of Matson’s existing business. “[T]his cost has increased steadily in the past and will continue to do so indefinitely as long as the operation remains a manual one,” he concluded. “There is certainly no indication of a change in the current trend of spiraling longshore wages with no corresponding increase in labor productivity.” Given the urgent need to automate, Weldon conceived of a way to make the container work: if Matson could load those small shipments into containers in route-sequence order, delivery trucks could collect the containers in Honolulu and proceed immediately on their routes. The goods for each store would be handled only when the truck arrived there, making containerization on the Hawaii run economically viable.12
Given that containers made sense, how big should they be? Weldon’s analysis pointed out that the smaller the size, the greater the number of loads that would fill entire containers going directly from shipper to recipient, with no reloading. On the other hand, two 10-foot containers would take twice as long to load on a ship as one 20- foot box, making poor use of the company’s investment in cranes and ships. After analyzing thousands of Matson shipments by computer—a task that in 1956 required feeding in thousands of punch cards—Weldon’s researchers