The Box - Marc Levinson [89]
It was the indefatigable Morris Forgash who finally got regular intercontinental container service under way. Starting in 1960, his United States Freight Company began moving containers from the United States to Japan, using U.S. railroads, Japanese truckers, and the mixed-cargo ships of States Marine Lines. A year later, the New York Central, equipped with 5,000 new Flexi-Van containers, began similar services to Japan and Europe. United States Lines, the largest U.S. line handling general cargo, carried Southern Railway containers on experimental voyages to Europe. The U.S. Army, supporting hundreds of thousands of troops in Europe, began trials sending 40-foot containers across the ocean.20
These first international efforts were small in scale. Malcom McLean wanted to sail to Europe in 1961, and his staff dissuaded him: the company was not ready for such a large venture. No ship line was sailing fully containerized ships to Asia or Europe, so the containers were lodged in a few cells built into one of the holds of a breakbulk ship or carried with a load of mixed cargo. Most of the cargo on these vessels was traditional freight that had to be handled one piece at a time, so loading and unloading took almost as long as for voyages without containers. Shippers saved no money by using containers internationally, because the conferences that set ocean freight rates gave them no preference: the rate for a single container holding 20 tons of auto parts was roughly the same as the rate for 20 tons of auto parts shipped in dozens of wooden crates. The containers were usually returned across the ocean empty, and that cost, too, had to be reflected in the rates. Aside from less theft, from the shipper’s viewpoint the only real attraction of these early international container services was reduced paperwork. Rather than arranging and paying for each stage of the journey separately, as they always had, shippers could ask a freight forwarder to quote a single rate for the entire land-sea-land shipment from America to Asia, and could pay for it with a single check.21
Viewed at the start of 1965, the balance on containerization’s first nine years was positive but unspectacular. In New York, container tonnage had hit a plateau, and the International Longshoremen’s Association remained vociferously opposed to its growth. On the West Coast, even after rapid growth, only about 8 percent of general cargo was moving in containers. Some railroads were using containers that in theory could be interchanged with ship lines, but in practice rail-ship container traffic was negligible. The trucking companies that used demountable containers did so mainly under contracts with Sea-Land and Matson; otherwise, truckers overwhelmingly preferred trailers that were permanently attached to their wheels and could not easily be loaded aboard ships. Container shipping looked to be a viable enough business, producing $94 million of revenue for Sea-Land in 1964, but it was a niche business. The way most manufacturers, wholesalers, and retailers moved their goods had hardly changed.22
Behind the scenes, though, the prerequisites for the container revolution were falling into place. Dock labor costs were poised to fall massively thanks to union agreements on both coasts. International agreements were in place on standards for container sizes and lifting methods, even if few containers yet met those standards. Wharves designed for container handling were on the way. Manufacturers had learned to organize their factories so that they could save money by shipping large loads in single units to take advantage of containerization. Railroads, truckers, and freight forwarders