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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

April 15, 2014 at 11:07 AM

The box that changed everything for shipping

Port of Seattle commissioners and other maritime officials on Wednesday will mark the 50th anniversary of the port’s first container terminal. It was leased to Sea-Land Service and Seattle became one of the first ports to have a dedicated container facility.

This is the way the world’s 10,000-mile supply chain works now, as grippingly explained by Rose George in her book, Ninety Percent of Everything: Inside Shipping, the Industry That Puts Clothes on Your Back, Gas in Your Car, and Food on Your Plate. But it was not always that way.

Cargo was once hoisted by longshoremen, often by hand and in small portions, into the holds of freighters. At dockside, it was loaded again into rail cars and trucks. The process was time-consuming, inefficient and led to pilferage.

Change began in the late 1950s, when Malcolm McLean, who had earned his chops in the trucking business, began experimenting with a better way to move goods. At first, he used truck trailers. Earlier, small containers had been tried on different routes, including from Seattle to Alaska. None had been especially effective.

But McLean, along with engineer Keith Tantlinger, created the large intermodal shipping container. It could be loaded and sealed at its point of origin, put aboard a purpose-built ship by a giant crane, then at its destination port transferred to railroad flatcars or truck-trailer flatbeds and delivered efficiency.

McLean renamed his company Sea-Land and competitors quickly arose. One, Maersk, acquired the international routes of Sea-Land in 1999.

The result revolutionized shipping. International goods could move faster and cheaper. In 2011, American ports took in $1.73 trillion in containerized exports, or 80 times all U.S. foreign trade in 1960.

The term TEU, or twenty-foot equivalent unit, was born to describe the metal boxes. Some 1.9 million TEUs were handled at the Port of Tacoma in 2013. Seattle saw about 1.6 million.

Railroads eventually created special cars to handle double stacks of containers. Such trains (COFC, container on flat car) or TOFC (trailer) are the hottest on every railroad, given priority once assigned to their premier passenger trains. Yards such as BNSF’s Seattle International Gateway in Sodo are built around moving containers quickly and profitably.

Yet the jobs lost by longshoremen starting in the 1960s were only the beginning. Containerization was also the backbone awaiting globalization as U.S. tariffs gradually fell away and corporations sent manufacturing overseas. The argument remains whether Americans see a net benefit from cheap goods vs. lost jobs and stagnant-to-falling wages.

The scale of the industry today is enormous. According to George, if you took only Maersk’s containers and put them end-to-end, they would stretch halfway around the planet. Bigness continues to be a driving force, including in ship size — Seattle and Tacoma, with natural deep-water ports can handle the ships called Post Super Panamax, which are as large as a Nimitz-class supercarrier. Container lines are consolidating, too.

Container ships attract pirates (as in the film, Captain Phillips) and lose containers overboard (as in the film, All is Lost). Rose discusses the often dismal conditions for crew members, depending on the line.

So happy birthday to that homely and ubiquitous box. It was a world changer.


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