At the Foundation for Economic Education, Alexander Hammond recounts the tale of a former truck driver who was instrumental in revolutionizing the way we ship products around the world:
Deep-sea containers from China at Ely, Cambridgeshire
Via Wikimedia Commons.
In 1937, McLean made a routine delivery of cotton bales to a port in North Carolina for shipment to New Jersey. As McLean couldn’t leave until his cargo had been loaded onto the ship, he sat for hours watching dozens of dockhands load thousands of small packages onto the ship. McLean realized that the current loading process wasted enormous amounts of time and money, and he began to wonder if there could be a more productive alternative.
In 1952, McLean thought of loading entire trucks onboard a ship to be transported along the American Atlantic coast (i.e., from North Carolina to New York). Although this idea would dramatically reduce loading times, he soon realized that these “trailer ships” would not be very efficient due to the large amount of wasted cargo space.
Mclean modified his original design so that just the containers—and not the trucks’ chassis—were loaded onto the ship. He also developed a way for the containers to be stacked on top of one another. That was the origin of the modern-day shipping container.
In 1956, McLean secured a bank loan for $22 million. He used the money to buy two World War II tanker ships and convert them to carry his containers. Later that year, one of his two ships, the SS Ideal-X, was loaded with 58 containers and sailed from New Jersey to Houston, Texas. At the time, McLean’s shipping company offered transport prices that were 25 percent lower than those of his competitor as well as the ability to lock the containers in order to prevent cargo theft, which also appealed to many new customers.
By 1966, McLean launched his first transatlantic service and three years later, McLean had started a transpacific shipping line. As the advantages of McLean’s container system became clear, bigger ships, more sophisticated containers, and larger cranes to load cargo were developed.
Update 21 May: Here’s a breathtaking example of just how much McLean’s containers changed the world:
In 1956, hand-loading cargo onto a ship in a U.S. port cost $5.86 per ton ($55.58 in today’s money). By 2006, shipping containers reduced that price to just 16 cents per ton ($0.21 in today’s money). https://t.co/zuMMqOuiAl #HumanProgressData
— Timothy Aeppel (@TimAeppel) May 20, 2019
