The Box - Marc Levinson [85]
Most big shippers had no pressing need to use coastal shipping services, whether containerized or not. They used ocean freight for exporting or importing—but only a handful of containers were being carried on international ships. Most freight shipments were domestic, going cross-country by truck or train. Not until container technology affected land-based transportation costs would the container revolution take firm hold.5
Up through the end of World War II, trains had been the way that most companies moved their goods. Railways’ freight revenues were nine times those of intercity truck lines in 1945, when more than 400,000 carloads of manufactured goods as well as most of the nation’s coal and grain were shipped by rail. The 1950s, though, were the decade of the truck. Better roads, including widespread construction of expressways, permitted larger trucks carrying heavier loads at higher speeds. The use of 40-foot trailers on superhighways instead of 28-foot trailers on congested two-lane roads led to large productivity gains that helped truckers take business from railroads. Trucking companies’ intercity revenues doubled during the 1950s, and growth would have been even higher if trucks owned by or operating under contract to manufacturers and retailers were included in the count. Meanwhile, railroad freight revenues were flat. By 1963, most manufactured goods, except automobiles, moved by truck.6
The railroads’ greatest challenge came in the smallest but most lucrative part of their business, the handling of shipments too small to fill an entire boxcar from origin to destination. Less-than-carload shipments might vary in size from a few barrels of solvent to ten thousand pounds of nuts and bolts. In 1946, these small shipments made up less than 2 percent of railroads’ tonnage but brought in nearly 8 percent of their revenues. Handling these loads was inefficient, requiring railroad employees to move individual crates and cartons from one boxcar to another at connecting points at huge expense. Truckers went after the market with a vengeance, and nearly three-quarters of the railroads’ less-than-carload business shifted to the highways within a decade.7
The loss of traffic that had always been theirs forced railroad executives to do some serious thinking about what their companies could still do best. The obvious answer was to concentrate on their strength—the ability to carry heavy loads over long distances at relatively low cost. One potential type of load grabbed their attention: trucks. Driving a truck from California to New York could require one hundred man-hours behind the wheel in the days before coast-to-coast expressways, plus time for meals and rest. Sending the truck trailer by train for the long-distance part of its journey could cut these labor costs while preserving trucks’ greatest advantage, the ability to pick up and deliver at any location. Railroads had offered a service like this as early as 1885, when Long Island Railroad “farmers’ trains” transported produce wagons to ferry landings opposite New York City; four wagons rode on each specially designed freight car, while the farmers and their horses traveled in separate cars. An updated version appeared in the early 1950s, as railroads began to chain truck trailers to flatcars. They called it “piggyback.”8
Piggyback, like almost every innovation in transportation during that era, faced a very large obstacle: the Interstate Commerce Commission. The ICC regulated the rates and services of both trains and interstate trucks. It had quashed railroads’ attempts to carry truck trailers in 1931 under its mandate to avoid unfair and destructive competition. Putting trailers on trains confounded the ICC’s basic instincts, but in 1954 it finally outlined the conditions under which railroads could transport freight in trailers without submitting to regulation as motor carriers. Over time, the commission approved several “plans” that permitted piggyback without upsetting