The Box - Marc Levinson [92]
All three carriers reported stunning efficiencies. Three medium-size containerships could handle as much transatlantic freight as six breakbulk ships, with only half the capital cost and two-thirds of the operating cost, a consultant reported. U.S. Lines found that at Port Elizabeth, one longshore gang with one crane could load as much in a ten-hour container operation as ten gangs handling conventional breakbulk freight. Moore-McCormack pegged the cost of loading containerized cargo at Port Elizabeth as $2.00 to $2.50 per ton, versus $16.00 per ton for conventional freight.29
Two types of freight appear to have filled those first containers crossing the Atlantic: whiskey on the westbound run, military goods on the voyage to Europe. Liquor exporters had long complained of huge losses to theft on the docks, and convincing them to use containers was not a hard sell. Among Sea-Land’s first ports of call was Grangemouth, in Scotland, where it picked up Scotch whiskey. Sea-Land won the business with a tank container, made of stainless steel, designed to let exporters ship their whiskey in bulk for bottling in the United States. Two tank containers would fit neatly into a standard container cell on a Sea-Land ship, putting an end to the pilferage that had plagued the whiskey trade from time immemorial.
The military role was even more crucial. As a U.S.-flag carrier, Sea-Land was entitled to carry a portion of the freight for the quarter million U.S. soldiers in West Germany, and the military, determined to push containerization, channeled cargo Sea-Land’s way. According to industry rumor, more than 90 percent of the cargo on Sea-Land’s first transatlantic voyage was military freight. Military demand all but assured that Sea-Land’s first voyages would be profitable, and gave it an advantage that foreign carriers could not match. When the navy finally overcame the objections of the breakbulk carriers and put European military shipping contracts out for competitive bids in the summer of 1966, Sea-Land underpriced every American competitor and won all the traffic it could handle.30
Authoritative numbers on shipments during that first year of transatlantic container service do not exist. The vast majority of containers going to and from Europe flowed through New York harbor, and port data offer the best guide to the magnitude of the new trade. The port’s container tonnage, 1.95 million long tons in 1965, soared to 2.6 million tons in 1966, even though hardly any containers were carried during the first 10 weeks of the year. Faced with this enormous flow of cargo, more U.S. companies, two groups of British carriers, and a consortium of Continental ship lines all raced to enter the container trade. “In 1966, commitments by ship operators and ports to containers passed the point of no return,” a consultant judged.31
Only 3 ship lines were offering international container service from the United States in the spring of 1966. By June 1967, one researcher counted 60 companies offering container service to Europe, Asia, and even Latin America (although only a handful used special containerships). More than 50,000 containers—enough to hold half a million tons of freight—crossed the ocean in the second half of 1967. Many carriers placed orders for brand-new containerships, designed to maximize the load of 8-foot-wide, 8-foot-high boxes that were quickly becoming the industry standard. In 1967, as the Port Authority touted a study showing that 75 percent of the Port of New York’s general cargo could move in containers, 64 container vessels were under construction by 12 ship lines. Kerry St. Johnston, head of the British consortium Overseas Containers Ltd., warned that so much new capacity would lead to rampant rate cutting, not a happy prospect for ship lines that were in the process of investing hundreds of millions of dollars in container equipment and ships.32
The new, fully containerized vessels began