In the Time Before the Container
Before the shipping container, there were lines. Great lines of trucks waiting to be unloaded and reloaded. The year: 1937. Malcolm McLean had made a routine run with a load of cotton out of North Carolina to the New Jersey shore on the East Coast of the United States, where he sat in one of those great lines, waiting. And waiting. And waiting. Hours passed while he watched the stevedores unload the rucks ahead of him and he thought to himself there’s got to be a better way. For the next several years, Malcolm built up his transportation company, growing from five trucks to 1,750, domiciled at 37 terminals across the country. At that time, his was the fifth largest truck transportation company in the United States.
During the 1950s, weight restrictions were introduced, and McLean’s drivers routinely got fined for heavy loads. He continued to try and find a more efficient way to transport his clients’ cargo. One day, his mind drifted back to that day in 1937, with him in his truck, waiting for hours to get unloaded and reloaded. While contemplating that day, it hit him–why don’t we create a standard sized trailer that could be loaded right onto the boats by the hundreds? He could see this revolutionizing his transportation business. He would remove most of his tucks and use boats to transport these new containers to strategically placed hubs. This would allow his trucks to operate on short routes within each state, eliminating the recently introduced weight restrictions and levying fees.
Intermodalism: A revolution in transportation
In 1955, McLean sold his trucking business, taking out a business loan for $42 million. Certain that his idea would succeed, he spent $7 million of his loan to purchase an already established shipping company by the name of Pan-Atlantic Steamship Company. McLean knew that Pan-Atlantic already had docking rights in many of the port cities on the East Coast that he wanted to target. Shortly after buying Pan-Atlantic, he renamed it SeaLand Industries. After that, he began testing variations of his original concept, and finally settled on a form that was strong, stackable, and easy to load and unload. The containers also were provisioned with locks, which made them theft resistant.
After McLean finished designing the containers, he set to work designing the ships that would carry them. He bought an oil tanker named the Ideal X, and modified it. When he was finished, it could hold 58 containers and approximately 14 million litres of petroleum. The modified Ideal X made its maiden voyage as a cargo ship on April 26th of 1956, leaving out of New Jersey and heading for Houston, Texas. The success of McLean’s design was such that his company was taking orders before the ship was even docked in Houston. While the Ideal X was still en route to unload and reload, McLean offered a 25% discount on shipping rates typical for the time. Also, with lockable containers, the cargo was secure from theft, which made his clients even happier.
Shipping Containers Begin to Transform the Shipping Industry
The overwhelming success of that first voyage led McLean to order his first ship, designed specifically to carry these containers, naming it Gateway City. In a little over a year, Gateway City was ready for its maiden voyage. In October of 1957, it left New Jersey and headed down to Miami, Florida. To the amazement of those working the dock at the time, it took only two dock crews to unload and load all the cargo, moving that cargo at the rate of 30 tons per hour, a rate never seen until that day.
While the success of McLean’s idea was sealed, there were still a number of issues to address. While containers were more standardized, there were still issues with size and corner fittings. By this time, McLean had also become aware that there had to be a standardized container size for trains, trucks, and other transport equipment so each mode of transport could be built to a single standard.
Container size standardization is agreed upon
A rival had entered the scene, and by the 1960s, Matson’s was using 24-foot containers while McLean was still using 33-foot containers. During the Vietnamese War, the US government needed an efficient way to ship goods and was pushing for standardization. After some back and forth, McLean agreed to release his patent for his shipping container post design, and several standards were soon agreed upon. In January of 1968, ISO 338 defined the terminology, dimensions, and ratings for shipping containers. In July of the same year, ISO 790 defined how containers should be identified. Finally, in October of 1970, ISO 1897 defined the recognized sizes of the shipping containers. The 20-foot and 40-foot containers we see today are the direct result of the ISO standards set decades ago. The 20-foot containers have become the industry standard for referencing cargo volumes, which is known as the Twenty foot Equivalent Unit, or TEU.
SeaLand’s first international voyage
Only ten years after McLean designed his first shipping containers and modified the Ideal X to carry them, he sent one of his ships on its first ever international voyage. In April of 1966, SeaLand’s Fairland set sail for Norway, carrying 236 containers onboard. Rapid expansion ensued, and by 1968, container ships had the capacity to carry 1,000 TEUs, a huge amount of cargo for the time. All was not well, however, as a resistance to the containers grew.
A Resistance, of Sorts
The spread of shipping containers to ports outraged dockside unions, which saw many dock workers idled. In fact, many dockside unions went on strike during the 1970s, disrupting the shipping industry while slowing the expansion of the use of shipping containers.
Epilogue
By 1970, SeaLand Industries had 36 containers ships, 27,000 shipping containers, and connections to over 30 ports in the United States. McLean sold SeaLand Industries to R.J.Reynolds for $160 million.
And the rest, they say, is history!
