Marc Levinson

A brilliant look at how logistics standardization in the form of containers has revolutionized the transportation business and the modern world. Levinson is an amazing guide to the strange lost world a few decades past where prices were administered, competition regulated, and cozy cartels ruled. Ports were harbours of inefficiency and dens of thieves. Hayek's dedication to the socialists of all parties rings true when rhetorics advocated free markets and practice stifled competition.

Having show more learned to squeeze money out of the trucking business, one man, Malcom McLean, saw the opportunity to profit from the mess and improve efficiency. In acts of daring, financial acumen and brinkmanship, McLean established a container shipping business. Just as in any revolution, he himself was overtaken by history. One of the joys of Levinson's book is that he shows changes to be both evolutionary and revolutionary - with plenty of evolutionary dead ends (McLean's non-standard 35 ft. container), ship scale arms races and booms and busts. The container changed the whole transportation infrastructure - making and breaking communities. Levinson tells the story of the Port Authority of New York on the East Coast, Oakland and Seattle on the West Coast and glimpses at Rotterdam and Singapore. The 278 page book is over much too soon and there remain many stories to be told, eg I would have liked to read a chapter about the IT revolution of warehouse and shipping management as well as a pointer to GPS and tracking systems. Curiously for a personalized economic history, the book features not a single illustration. show less

The Box deserves all of its accolades. The shipping container is one of the least romantic objects imaginable, a 40' by 8' by 8' steel and wood box full of, well, everything and anything. The basic idea behind containerization is that it takes about the same amount of time to move a box, no matter the size, and putting everything in one box enables goods to move from ship to train to truck at minimum cost, accelerating commerce everywhere. But while the idea seems simple, it took decades to show more make it a reality.

Levinson gets at both the creation and destruction in this account. The creation primarily follows Malcom McLean, a North Carolina trucking magnate who's relentless desire to cut costs and boldness to steer away from the way things were done created the first workable modern container system, using a pair of World War 2 vintage converted tankers. McLean was a lonely visionary at first, with other shipping lines taking decades to see the benefits of containers, even at 400% improvements in cost per ton of cargo moved. Containerization necessarily required massive capital investments in new ships and specialized loading gear, harmonization of international and cross-sector regulations across a multiple cartels, and new shipping practices from customers. A major turning point was the use of containers to ease a crisis in military logistics during the Vietnam War. With McLean's expenses covered by the Department of Defense, everything shipped back from Japan was pure profit. We've all benefited from reliability and cheapness of container shipped materials and goods.

But there was also plenty of destruction. Longshoremen unions were hit hardest. Longshoremen loaded and unloaded ships in a manner that their medieval predecessors would have understood, muscling goods between dock and hold only slightly aided by advances like the pallet, forklift, and powered crane. Being a longshoreman was a dangerous trade, injury rates were substantially higher than for other manual labor, but the tens of thousands of longshoremen were a unique community. They were also heavily involved with organized crime, pilferage, and while I'm generally on board with a "fuck all the bosses" stance, deliberate inefficiency in work just barely short of sabotage. Containers required far fewer men than break-bulk loading, and it kicked the foundations out from under longshoremen.

A second set of victims were traditional port cities, primarily New York and London. With 19th century infrastructure and labor practices, these cities were unable to adapt to containers. When shipping had been a substantial cost, factories were close to markets and docks. New intermodal models meant that factories could chase efficiencies worldwide, leading to the lost decades for both cities in the 1970s as they shifted from industry to finance, and rippling Rust Belts as factories and jobs moved from America and Europe to Asia. Ports able to make bold bets on new technologies flourished, like Newark, Rotterdam, Singapore, and Dubai, while others failed based on the harsh economic logic of new integrated supply chains.

Malcom McLean himself hit some of the destruction. He made further bold bets into very fast ships that sunk his company when the 1973 oil embargo drove fuel costs up. A second bet on large round-the-world service hit the opposite problem when oil prices crashed. He was still a rich man, but he never again achieved that flashing acme of success.

This is a detailed, extensive history. Where there are gaps, such as on good pricing data for shipping over time, Levinson makes the case that such data is probably unrecoverable, due to shifting exchange rates, complex per-cargo rates, and under the table kickbacks to major shippers. show less

FYI, 58% of this book is the book, the rest is notes, bibliography, and index. I checked it out from my library, yay libraries!

Although the author goes into the kind of detail my brain will never retain, and although I did skim and even skip several chapters because of that, I did get the sort of overall understanding I was looking for, so that's a win. I'd thought the process from breakbulk shipping to streamlining in large containers was less fraught than it turned out to have been. Well, show more humans will human; we want prosperity, but we get in each other's and our own way more often than not. show less

In economic theory, standardization goes hand in hand with division of labor; Adam Smith's pin factory wouldn't have worked nearly so well without a single pin size. Examples of useful standards are everywhere: the metric system, TCP/IP packets, DIN slots, shoe sizes... some are driven by physical needs, others are arbitrary, but when they were decided, all created winners and losers. Few international standards have created more winners and losers than the shipping container, one of the show more most important standards of the 20th century, and Marc Levinson transforms what could have been a deadly boring trudge through ISO meeting minutes into a fairly interesting, if somewhat disjointed account of the irresistible force of containerization and the not-quite immovable objects of shipping lines, railroads, trucking companies, labor unions, and port authorities trying to hang onto obsolete shares of the inefficient pre-containerization transport landscape. Before The Box, shipping was a torturously slow, expensive, loss- and theft-prone venture dominated by industry cartels and longshoreman's unions, each more concerned with protecting their own high profits and wages than facilitating commerce. Enter self-made transport tycoon Malcom McLean, whose business savvy and early embrace of the container allowed him to exert vast commercial, industrial, and military influence on the country even while remaining fairly obscure. Seemingly minor decisions, like what kind of clasp should be used to seal the container, or how many sizes there should be, had billion-dollar consequences, to say nothing of the shifting flows of wealth from San Fransisco, New York, and London to Oakland, East Rutherford, and Felixstowe. I really liked how Levinson avoided casting anyone in the story as a hero or villain; economics isn't a simple morality play of noble innovators versus evil protectionists, and it's easy to forget that while containerization has created thousands of companies and millions of jobs, there were still costs for the businesses, people, and cities who couldn't adapt, that we measure in empty warehouses, vacant lots, and rusting pylons. Consumer surplus in the form of lower transaction costs does not always create new jobs. I just wish there had been more graphs to clarify the extremely data-rich narrative, which also jumps around in time almost constantly, making it tough to tell exactly what's going on. What a fascinating story of one of the most under-appreciated shapes in the world. show less