When the first container ship set sail 50 years ago, businesses and regulators treated distribution not as a single process but as a series of distinct modes: ships, trucks and trains. Every time the transportation mode changed, somebody had to transfer physically every box or barrel.
“By far the biggest expense in this process was shifting the cargo from land transport to ship at the port of departure and moving it back to truck or train at the other end of the ocean voyage,” writes Mr. Levinson, a Wall Street economist and former economic journalist. This “breaking bulk” could easily consume half of the total cost of shipping.
Goods often had to wait in warehouses for the next stage. Those transfers and delays made shipping slow and schedules uncertain. They also created opportunities for damage, mistakes and more than a little theft. (Whiskey was one of the first products shipped by container because it was so subject to pilferage.) Different companies in different industries facing different price regulations for different goods handled each step.
Today, by contrast, “you can call one of the big international ship lines, tell them to pick up your container in Bangkok, which is not a port, and tell them to deliver it in Dallas, which is not a port, and they will make the arrangements to get it to a port and get it on a ship and get it off at another port and get it onto a train or truck and get it where it needs to be,” Mr. Levinson said.
For that, shippers can thank a visionary North Carolina trucking entrepreneur. Malcom McLean, founder of the company that became Sea-Land Service, thought not like a seaman but like a salesman.
via Virginia Postrel.