The Box - Marc Levinson [93]
So far as shippers were concerned, the only reason not to join the rush to container freight was the shortage of containers. Although U.S.-flag ship lines added 13,000 containers between September 1966 and December 1967, and European ship lines bought thousands more, empty boxes could be in short supply. Otherwise, the cost savings were compelling, even with the conferences controlling transatlantic rates. Chas. Bruning Co., a maker of office machines near Chicago, found that it could get its equipment delivered to inland points in Europe in an average of twelve days. In addition to cheaper ocean freight, Bruning saved money by eliminating special export packaging, damage, and theft, and got a 25 percent discount on its insurance. So much traffic shifted so quickly that three years after containerships first sailed to Europe, only two American companies were still operating breakbulk ships across the North Atlantic, making a combined total of three sailings per month.34
The surge in transatlantic container traffic, coming at a time when American factories were running hard to meet the demands of a wartime economy, offered a golden opportunity for U.S. railroads to regain their place at the heart of the domestic transportation system. Their business in conventionally packaged export cargo was dying. Thousands of containers were passing through New Jersey and Baltimore every week, many of them going to or from factories in the industrial heartland of the upper Midwest. This huge scale offered no advantage to truckers, because, no matter how many boxes were being handled, one truck could pull only one 40-foot box. Scale could bring real savings aboard trains, giving the railroads a way to recover some of the export traffic they were losing.
The European railroads saw things that way. The Europeans had been trying to make a business with containers since the 1920s, and they were eager to strike deals with the ship lines. Almost as soon as transatlantic container shipping began, they offered flat per-container rates to draw traffic. In 1967, the French National Railway charged a flat 572 francs to carry a loaded 40-foot container from Bremen, in North Germany, to Basel, in Switzerland, while the German Federal Railway charged $241 to take any 40-foot box from Bremen to Munich. In Britain, using dedicated trains to carry containers to and from the port at Felixstowe had been part of Sea-Land’s plan from the very beginning, and British Rail was an eager collaborator.35
American railroads, especially those in the East, were notably less enthusiastic. They feared that containers would draw shipments away from boxcars, bringing in less revenue. Most of them had already built ramps to load and unload truck trailers under the auspices of Trailer Train, and at a time when they were financially pressed, they had no desire to lay out additional money for overhead cranes and storage yards to handle containers. The New York Central had a successful operation with its unique Flexi-Van service, and it feared that maritime containers would siphon off Flexi-Van’s customers. The railroads could not refuse to handle containers, but they could provide such poor service that no customer would want to ship them. In February 1966, the Pennsylvania Railroad delivered a flatcar holding two 20-foot containers to a Caterpillar Tractor warehouse in York, Pennsylvania. The containers were loaded while sitting on the car on Caterpillar