Summer 2008

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The Box That Changed Our Lives

by E. Andrew Boyd

When the converted oil tanker Ideal-X arrived in the Port of Houston (Texas) on May 1, 1956, no one imagined the global change it foreshadowed. Longshoremen stopped work and ran to the edge of the dock to watch, as did businessmen who had flown from the port of origin in Newark, N.J. Recalled one witness, “We had seen thousands of tankers in Houston, but never one like this. So everybody looked at this monstrosity and they couldn’t believe their eyes.” But it wasn’t the ship itself that captured the onlookers’ attention. It was the many metal boxes strapped to the deck, each roughly the size of a truck trailer.

In a delightful book entitled “The Box” (Princeton University Press, 2006), author Marc Levinson tells the history of these unpretentious crates. “What is it about the container that is so important?” writes Levinson. “Surely not the thing itself. A soulless aluminum or steel box held together with welds and rivets, with a wooden floor and two enormous doors on one end: the standard container has all the romance of a tin can.” In fact, there’s much to admire. From the design of the corner-posts to the stacking brackets, shipping containers display the finest elements of “here’s-a-problem-let’s-solve-it” engineering.

But the true marvel of the shipping container was how it changed the engineering of the world economy. Prior to 1956, cargo was loaded by hand.As a result, ships spent weeks in port – far more time than at sea. Today, huge cranes can unload a standard shipping container and return to retrieve another in under two minutes, allowing huge vessels to dock and sail in less than a day. Loading is interspersed with unloading so that no time is wasted moving empty cranes between ship and shore. Optimization algorithms choreograph the process in advance of a ship’s arrival, deciding when the vehicle picking up the container in shipboard slot 872 should be queued on the dock, and when the container scheduled for loading into slot 2605 should be brought from yard location A-52-G-6. Containers on the largest ships may be stacked 15 or 20 abreast and six or seven high on deck,with a similar arrangement in the hold below. When the Ideal-X first sailed, the cost of loading loose cargo was an estimated $5.83 per ton.With the use of the shipping container this plummeted to a mere 16 cents.

The savings were so substantial they redefined the supply chain. Trucks and trains were quick to adopt standardized containers, recognizing savings similar to those of the maritime industry. Containers ultimately arrived at the doorstep of manufacturers, who in turn embraced shipping practices that capitalized on the economies of working “within the box.” In less than 50 years – practically overnight for such a capital-intensive enterprise – international transportation and manufacturing were completely re-engineered.

Once-great ports that failed to see the coming change disappeared while others grew to international prominence. New York, long the preeminent port in the United States, disappeared as the tidal marsh just south of Newark was developed to handle containers. In the 12 years from 1963/1964 to 1975/1976, longshoreman labor days in Manhattan fell from 1.4 million to 127,000 – a 91 percent drop. Theft, violence and corruption on the docks declined as power structures developed over centuries gave way to inevitable changes brought about by the box.

The size of today’s great ports and the logistical problems they face are almost unimaginable. Singapore, one of the world’s smallest countries and the world’s largest container port, hosted an average of 148 cargo ships per day in 2005, moving the equivalent of 23 million 20-foot containers during the year. With thousands upon thousands of containers in port at any given time, a drive along the waterfront is a spectacle as impressive as a space shuttle launch.

Shipping containers are now part of our daily lives. We pass them on the highway and count them as they go by at train crossings. They are the bits and bytes of an international trade network they created. As operations researchers and industrial engineers we owe them a debt of gratitude for their role in catalyzing international supply chain management. The Internet flattened the world by allowing information to travel quickly and inexpensively, but it was the box that freed the world of brick-and-mortar goods. Shipping containers may be as technologically straightforward as the Internet is sophisticated, but painted in their many colors and stacked aboard a seagoing vessel, they have a charm that comes from the very elegance of their simplicity.

E. Andrew Boyd is chief scientist and senior vice president of Science and Research at PROS, a revenue management and pricing software firm. He received his Ph.D. in operations research from MIT in 1987. This essay is an expansion of a radio broadcast by Houston’s National Public Radio affiliate KUHF.

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