The Box - Marc Levinson [41]
Those who made the grade were given large responsibilities. Bernard Czachowski was hired from McLean Trucking to oversee Pan-Atlantic’s vital relations with the independent truck lines that picked up and delivered its freight. Kenneth Younger, from Roadway Freight, came to manage the Puerto Rican business. Paul Richardson, who had entered McLean Trucking’s management training program out of college in 1952 and had stayed with the truck line when McLean spun it off, signed on as New England sales manager in 1960 and within eight months was in charge of sales nationwide. Richardson’s secret weapon was a simple form with the pompous title “Total Transportation Cost Analysis.” The form provided a side-by-side comparison of the costs of shipping a product by truck, rail, and containership, including not just transportation rates, but also local pickup and delivery, warehousing, and insurance costs. Salesman were instructed to add up each column to show the saving containers would bring, and then multiply by the number of loads the company shipped over the course of a year. The bottom line was the total annual saving, a number much more likely to be large, and memorable, than the traditional measure of a few dollars per ton.26
The Pan-Atlantic name was dropped in early 1960, and the ship line was rechristened Sea-Land Service to emphasize that it was a new venture on the leading edge of the freight industry. The work was seven days a week, an exciting, demanding environment. Memos were not wanted. Conflict among executives was a given; managers were expected to meet, thrash out their differences, and act. Performance was measured constantly, and rewarded not with cash but with stock in the fast-growing company. Decades later, those early Sea-Land employees remembered the years when they were creating the container shipping industry as the best time of their lives. “It was a hard-charging, fast-charging company. Malcom would give us assignments and we didn’t ask questions, we just went out and did ‘em,” one said. Malcom McLean—universally called Malcom behind his back, but addressed by every single employee as Mr. McLean—presided over it all, constantly checking the numbers, making sure that the cash flowed.27
After a stinging $1.5 million loss in 1960, McLean sought to cope with adversity in his usual way: by plunging deeper into debt. In 1961 Sea-Land bought four World War II tankers and lengthened them by inserting large sections, known as midbodies, built in a German shipyard. These “jumboized” vessels could carry 476 containers—twice as many as Sea-Land’s existing containerships, eight times as many as the Ideal-X. Competitors complained that the German reconstruction made Sea-Land’s vessels ineligible to sail domestic routes as “American” ships, but to no avail. The government approved McLean’s application to put the ships into service between Newark and California in 1962, making Sea-Land the only intracoastal ship line. The unbalanced trade made the economics of the intracoastal route treacherous: the eastbound service, heavy with canned fruits and vegetables from California’s Central Valley, handled ten thousand tons a month, but California-bound ships carried only seven thousand tons and lots of empty containers. Those same economics, though, assured that there would be no serious competition on the intracoastal route. There simply was not enough freight.28
Even as Sea-Land expanded to the West Coast, McLean kept a close eye on