The Box - Marc Levinson [44]
Malcom McLean could no longer be involved in every decision. Yet his basic approach to management remained unchanged. McLean was still a daily presence at headquarters. “It wasn’t unusual that when you came to work, he’d say, ‘Good morning, how are you doing this morning?’ “recalled a long-time Sea-Land accountant. “Malcom was a good salesman. He’d give the impression that he knew you.” When a building for consolidating container loads was needed in Baltimore or Jacksonville, McLean would go and choose the site. When refrigerated containers were needed, managers would spend two days debating how many to buy, only to hear McLean say, “I appreciate the exercise, but I’ve already signed a contract for five hundred.” When the chance came to buy Alaska Freight Lines in 1963, McLean hardly bothered to investigate the company’s finances, much less such operational issues as access to Anchorage harbor in the winter; McLean was in a hurry, and the chance to break into the Alaska trade quickly was too good to pass up.37
Above all, he kept his eye on the money. Teletypes clattered constantly as outlying terminals sent booking information to headquarters. Clerks updated records showing how many days each container had carried revenue traffic, how many tons it had hauled, how many dollars it had grossed. Geographic analysis documented the land transportation patterns of Sea-Land cargo. Monthly financial re ports revealed how much revenue Sea-Land received from each commodity shipped from Newark to Texas, reminding all that an eighteen-ton container of liquor was twice as profitable as a four-ton container of toys. Weekly reports documented cash flow. And there was an endless stream of demands for better cost control. Shaving 1.6 cents off the cost of handling 100 pounds in Ponce could save $14,300 a year. One more container lift per gang hour would save $180,000. Limiting long-distance telephone calls to three minutes would save $65,000. “Probably more attention was paid to financial results there than you find in any company around today,” remembered Earl Hall, later Sea-Land’s chief financial officer. In 1961, its sixth year, Sea-Land’s container business had finally moved into the black. So long as McLean was involved in running it, Sea-Land never lost money again.38
Chapter 5
The Battle for New York’s Port
For the Port of New York Authority, which was providing Pan-Atlantic a home, the arrival of containerization was a godsend. For New York City, it proved to be a disaster. City officials wasted enormous sums in a futile attempt to keep the city at the center of a shipping industry whose changes New York could not possibly accommodate. Despite their costly efforts, the local economy was left devastated as new technology made the nation’s largest port obsolete.
In the early 1950s, before container shipping was even a concept, New York handled about one-third of America’s seaborne trade in manufactured goods. New York’s role was even larger when measured in dollars, because the port had increasingly come to specialize in high-value freight. This success was not easily earned, for the city had some important disadvantages as a port. The city’s piers—283 of them at midcentury, with 98 able to handle oceangoing vessels—were strung out along the Manhattan and Brooklyn water-fronts. The main railroad connections, however, were across the harbor and across the Hudson River, in New Jersey. Freight trains arriving from points north, south, and west were sent to the rail roads’ large yards located inland, where the cars were sorted by destination and moved by switch engine to one of the railroad terminals that lined the New Jersey side of the harbor. Each railroad owned a fleet of lighters, barges pushed by tugboats, to carry its freight cars across the harbor, either to or from its own New York terminal or to the dock being used by an oceangoing ship. Getting tires from Akron to a Europe-bound vessel thus entailed repeated shunting and shifting. It was economically viable only