The C-2s, unlike Pan-Atlantic’s T-2 tankers, had been designed to carry large amounts of mixed cargo in their five holds, and altering them posed no great problem. The decks were widened from 63 feet to 72 feet, and the hatches were expanded so that the entire container storage area would be accessible from above. The cells to hold the containers inside the ship were a tougher challenge. At the Alabama State Docks in Mobile, Keith Tantlinger built a mock-up 20 feet high. The cell guides, vertical strips of steel with a 90-degree angle to hold the corners of a container, were mounted on hydraulic jacks, which could be raised and lowered to simulate a heeling ship. A crane tried to deposit and remove a container from the cell while it was at various angles, and instruments measured the stresses and strains on the container and the cell as it tilted this way and that. After hundreds of tests, Tantlinger concluded that each cell should be 1$ inches longer than the container it was meant to hold and 3/4 of an inch wider; smaller dimensions made it too hard for the crane operator to ease the box into the cell guides, but larger ones allowed the container to shift too much. The cells were built and installed in the holds, giving the C-2s the ability to carry 226 containers, almost four times the load of the Ideal-X.2
Bigger ships with bigger loads would make loading and unloading vastly more complicated. The methods used for the smaller T-2s were no longer good enough: with 226 containers, a loading rate of one container every seven minutes would require a vessel to spend more than twenty-four hours in port to take on a full load. Every aspect of the operation needed to be redesigned for faster handling. Tantlinger invented a new trailer chassis, with edges sloped so that a container being lowered by a crane would be guided into place automatically. A new locking system allowed a longshoreman to secure or release the container by raising or lowering a handle at each corner of the chassis, doing away with the labor-intensive routine of using iron chains to prevent the box from slipping off the truck. These changes meant that a truck could deliver or take on a container and quickly drive away without occupying precious space at dockside. The containers themselves were redesigned with heavy steel corner posts to support the weight of more containers above them, and a new refrigerated version had the cooling unit set within the profile of the container, so that it could be stacked along with nonrefrigerated boxes. New doors were designed with the hinges recessed within the rear corner posts rather than protruding from the sides.
All of these new containers had a special steel casting built into each of their eight corners. The casting contained an oblong hole designed to accommodate the most critical invention of all, the twist lock. This device, with one conical section pointing down and another up, could be inserted into the corner castings of containers as they were stacked. When one was lowered upon the other, a longshoreman could quickly turn the handle and lock the two boxes tightly together. By pulling the handle the other way, a worker could release the two boxes in seconds when it was time to discharge the ship.3
Not until the cells and containers had been designed could Pan-Atlantic focus on the other critical component of its new operation, the cranes. The big dockside cranes in New York and Houston were inadequate to meet the new demands, and the other ports McLean wanted to serve lacked large cranes altogether. Shipboard cranes were the obvious answer, but existing shipboard cranes were not big enough to lift a 35-foot container weighing 40,000 pounds. No established maritime crane manufacturer could design and deliver a test model within the 90 days left in McLean’s ambitious schedule. In desperation, Tantlinger, who knew of the logging industry from his years in Washington State, proposed calling companies that manufactured diesel-powered logging cranes. Robert “Booze” Campbell, whose engineering firm helped redesign the ships and terminals, came upon the Skagit Steel & Iron Works in Sedro-Woolley, Washington.
Skagit Steel’s owner, Sidney McIntyre, had never worked on ships and was unfamiliar with electric cranes, but he agreed to build one. He was, in Campbell’s description, “a mechanical genius.” Within ninety days, Skagit Steel produced an enormous crane, which rode on a huge gantry that bridged an entire ship. The C-2s had their wheelhouses amidships, so each vessel required two cranes, one fore and one aft. The cranes moved backward and forward on rails placed along the ship’s sides and could travel across the width of the vessel, stopping immediately above any container and hoisting it vertically. Long, folding arms allowed the cranes to travel out over the dock to pick up and lower containers.4
The combination of cells and gantry cranes allowed the containers to be handled with unprecedented speed. Once the first column of cells had been unloaded, the ship could be loaded and unloaded simultaneously, in assembly-line fashion: each time the crane traveled to the dock to deposit an incoming trailer on an empty chassis, it would pick up an outgoing trailer and place it into an empty cell. With two cranes, each loading and unloading fifteen boxes an hour, the Gateway City, the first of the converted C-2s, could be emptied and reloaded in just eight hours. The new ships were “[t]he greatest advance made by the United States merchant marine in our time,” said Congressman Herbert Bonner, chairman of the Merchant Marine Committee. Tantlinger was not so certain. Before the Gateway City’s first voyage, on October 4, 1957, he dropped by the F. W. Woolworth store in Newark and purchased all of the store’s modeling clay. He cut the clay into small pieces with his pocket knife and wedged several pieces in the narrow spaces between the corners of the top containers and the metal frames of the cells. When the Gateway City docked in Miami three days later, he retrieved the clay to see how much the containers had shifted. The indentations on the clay revealed that they had moved by only of one inch—proof, at last, that a stack of containers in the hold would not sway dangerously as a containership rolled at sea.5
Pan-Atlantic had four of its six pure containerships in service by the end of 1957, with a ship sailing south from New York or east from Houston every four and a half days. The last two converted C-2s joined the fleet early in 1958. The Ideal-X and its sister tankers were sold off, along with 490 of the original 33-foot containers and 300 matching chassis. Pan-Atlantic’s Sea-Land Service, its capacity five times larger than it had been a year earlier, seemed poised for explosive growth.6
Instead, it sailed into trouble. McLean planned to use two of the all-container ships to open service to Puerto Rico in March 1958. Puerto Rico was a potentially lucrative market. As an island, it relied on ships to provide almost all of its consumer goods. As a U.S. commonwealth, it was subject to the Jones Act, a law requiring that cargo moving between U.S. ports use American-built ships with American crews. Limited competition allowed the few carriers serving Puerto Rico to charge very high rates, and McLean figured that Pan-Atlantic’s containers could easily grab market share. He figured without the longshoremen. When the first containership arrived from Newark, longshoremen in San Juan refused to unload the containers. Four costly months of negotiation ensued, with two ships sitting idle. Pan-Atlantic finally bent to union demands to use large, twenty-four-man gangs to handle containerships, and regular service opened in August. The delay, plus the cost of getting rid of the now obsolete tankers, drove McLean Industries dangerously into the red. A net loss of $4.2 million for 1958 nearly wiped out the earnings retained during the company’s first three years.7
McLean was not deterred. Pan-Atlantic’s problems, he determined, were rooted in the maritime industry’s passive, slow-moving culture. Domestic ship lines, such as Pan-Atlantic, operated in a highly regulated environment that left little room for entrepreneurial spirit. American-owned lines operating internationally, such as Waterman, were allowed to join international rate-making cartels. U.S.-flag ships, using American crews, had the exclusive right to carry the huge flow of U.S. government shipments, including military cargo, and many lines received government operating subsidies as well. This sheltered culture led to excesses like Waterman’s headquarters building in Mobile, with its revolving globe in the lobby and the lavish executive suite on the sixteenth floor. It did
not breed the sorts of creative, aggressive, hungry employees that suited Malcom McLean. McLean decided it was time for a culture change. In June 1958, Pan-Atlantic, which now ran only containerships, moved to a new headquarters in a converted pineapple warehouse near the Newark docks, while Waterman, the traditional breakbulk ship line, was deliberately left behind in Mobile.
The new Pan-Atlantic office had a very different atmosphere. Malcom McLean had a simply furnished glass-fronted office facing a large, open floor on which desks were lined up side by side. Every morning, McLean wandered the floor to check on the latest cash flow statement or the status of shipbuilding plans, disregarding hierarchy to get the information he wanted. The company’s tone, though, was set by his sister Clara. Her desk was in the middle of the floor, where she could keep an eye on everything and everyone. She knew who had come in late. She decorated the office; managers who were promoted into glass-fronted offices of their own found that she had selected their furnishings for them, right down to the art. “If you put a picture or a calendar on the wall, you got a note from Clara the next morning,” one recalled. She set the rules: coffee nowhere but the coffee room, no personal phone calls, desks cleared every night. She personally reviewed every single time card and approved every hire.8
Malcom McLean was not the only shipping magnate with an interest in containerization. In 1954, as McLean was leasing terminals for his proposed roll on-roll off service on the East Coast, the Matson Navigation Company began to sponsor academic research on cargo ha.ndling. Matson, based in San Francisco, was thinking about containers as well, but its approach was the polar opposite of McLean’s.
Matson, established in 1882, had been a loosely managed, family-dominated company that grew from a single ship in Hawaii into a transportation conglomerate. It owned California oil wells, oil tankers, and tanks in the Hawaiian Islands to store the oil. It owned passenger ships and built hotels on Waikiki Beach to attract passengers. It owned Hawaiian sugar plantations and the ships to carry sugar to the mainland. For a few years after World War II, it even owned an airline. None of this made much money, and the company’s underlying problem was that many of its big shareholders didn’t want it to make much money. The board of directors included representatives of major Hawaiian sugar and pineapple growers whose main interest was a cheap way to get their products to market. Whether the shipping service made a profit was almost incidental.9
Things began to change in 1947, when the Matson family convinced veteran steamship executive John E. Cushing to postpone his planned retirement and serve for three years as president. Cushing put the company on a budget for the first time and took a serious interest in addressing dismally low productivity. In 1948, Matson installed a revolutionary mechanized system to ship sugar to the mainland in bulk rather than in hundred-pound bags. Bulk sugar had required large investments—huge bins at the Hawaii end to hold the raw sugar, a special fleet of trucks to carry the sugar from mills to the pier, conveyors to move the sugar from the trucks to the top of the bin, and more conveyors to recirculate it within the bins, so the sticky substance would not solidify in place. These outlays had brought vastly lower costs. Sugar had given Matson a feel for what automation could achieve. Shortly after Cushing’s departure, the company decided to look into mechanizing the handling of the general cargo it carried between the West Coast and Hawaii.10
Matson moved deliberately. Pan-Atlantic, under McLean’s control, was a scrappy upstart building a brand-new business, and it risked little by acting quickly. Matson had no such haste; it had a large existing business to protect, and its directors were tight with the purse strings. After commissioning outside studies for two years—the same two years it took Malcom McLean to move from a concept to a functioning business—Matson created an in-house research department in 1956. The man recruited to run it was Foster Weldon, a geophysicist most recently involved in developing the Polaris nuclear submarine.
The contrast with Pan-Atlantic could not have been more stark. McLean’s engineers, people like Keith Tantlinger and Robert Campbell, were no intellectual slouches, but they had worked in industry, not academia, and they were well advised not to flaunt their pedigrees in public. Weldon was a professor at the prestigious Johns Hopkins University in Baltimore and a well-known figure in the new science of operations research, the study of efficient ways to manage complex systems. Pan-Atlantic’s initial technology had been designed on the fly, using obsolete tanker ships, shipbuilding cranes, and containers whose length was determined by the size of the tankers, on the assumption that it could all be improved once the business was up and running. Weldon found this catch-as-catch-can strategy bewildering. “All transportation companies have their own pet theories on the detailed equipment requirements comprising a ‘best’ container system, but there are no quantitative data relating even such gross characteristics as container size to the economics of a total transportation operation,” he wrote pointedly. His goal, as he defined it, was to develop good data and use them to find the optimal way for Matson to embark upon container shipping.11
Weldon quickly came upon the issues that would shape Matson’s approach. About half of the company’s general cargo was suitable for shipment in containers, but the flow was out of balance: for every ton the company shipped from Hawaii to the mainland, it shipped three tons from the mainland to Hawaii. Revenues from the westbound run would need to cover the cost of returning large numbers of empty containers west to east. Even worse, much of Matson’s business came from food processors in California sending small loads to mom-and-pop grocery stores in the islands. Matson would need to consolidate these small shipments to fill whole containers in California, and would then have to open the containers in Honolulu and parcel out the loads for various destinations. This would make container shipping expensive. On the other side of the equation, though, Weldon found that by eliminating the need to transfer individual pieces of cargo from trucks to ships and back again, containers would eliminate almost half the cost of Matson’s existing business. “[T]his cost has increased steadily in the past and will continue to do so indefinitely as long as the operation remains a manual one,” he concluded. “There is certainly no indication of a change in the current trend of spiraling longshore wages with no corresponding increase in labor productivity.” Given the urgent need to automate, Weldon conceived of a way to make the container work: if Matson could load those small shipments into containers in route-sequence order, delivery trucks could collect the containers in Honolulu and proceed immediately on their routes. The goods for each store would be handled only when the truck arrived there, making containerization on the Hawaii run economically viable.12
Given that containers made sense, how big should they be? Weldon’s analysis pointed out that the smaller the size, the greater the number of loads that would fill entire containers going directly from shipper to recipient, with no reloading. On the other hand, two 10-foot containers would take twice as long to load on a ship as one 20- foot box, making poor use of the company’s investment in cranes and ships. After analyzing thousands of Matson shipments by computer—a task that in 1956 required feeding in thousands of punch cards—Weldon’s researchers concluded that vans of 20 to 25 feet would be most efficient in the Hawaii trade: larger containers would travel with too much empty space, while containers shorter than 20 feet would require too much loading time. They recommended that Matson start out by carrying containers on deck, as Pan-Atlantic had, with conventional breakbulk cargo in the holds. By converting six of its fifteen C-3 cargo ships to carry containers on deck, Matson would be able to offer weekly container service between Honolulu and both Los Angeles and San Francisco. Weldon found that this arrangement would be profitable even if the container business stayed small. If the business grew, the company could convert additional ships to carry only containers. Containerization, he concluded, “would appear to present the fortunate circumstance of a promising initial course of action offering the option of going as far as desired and
stopping at any point that prudent planning dictates.”13
Matson management accepted Weldon’s recommendations in early 1957. Leslie Harlander, a newly minted naval architect, was put in charge of the engineering. Harlander was told to hire a staff and begin detailed planning for every aspect of a container operation. He was given clear guidance to be careful about money. Every choice had to be justified based on whether it offered a higher return on investment than the alternatives.14
Harlander and his brother Don, an engineer who specialized in cranes, began to lay out their requirements for cranes in July 1957. In October, they went to Houston to observe the first arrival of Pan-Atlantic’s newly rebuilt Gateway City. The Gateway City was a C-2 ship, slightly smaller and slower than the World War II-vintage C-3s in Matson’s fleet, and it was equipped with Sea-Land’s two novel shipboard cranes. With both cranes working, the Gateway City’s turnaround time was no longer than that of the much smaller Ideal-X. As the Harlanders saw firsthand, though, the shipboard cranes had shortcomings. Pan-Atlantic’s two crane drivers each sat high above the deck facing two colored lights. A green light told one driver that he could move the crane trolley over the side of the ship to deposit a container on the dock, while a red light told the other driver to wait. If both cranes accidentally dangled forty-thousand-pound containers over the side at the same time, the unbalanced weight could capsize the vessel. Matson, with plans to serve only a small number of large ports rather than many small ones, had no need to put up with this risk. The first big decision was an easy one: land-based cranes were the way to go.15
These would not be leftover cranes adapted from some other use like the cut-down shipyard cranes Pan-Atlantic had pressed into service in 1956. The original Pan-Atlantic cranes were revolvers, known in a shipping trade as “whirleys.” They did well enough at picking up a container from the deck of a ship and swinging it in an arc toward the dock, but their design made it difficult to lower the container precisely atop a trailer chassis, which slowed down the entire operation. Matson’s cranes were designed from scratch, with a requirement that they be able to unload an incoming container and load an outgoing box within five minutes—a cycle two minutes shorter than that of Pan-Atlantic’s first cranes. The Matson cranes were to have booms that stretched ninety-five feet from the dock, more than enough to span the entire width of the ships in Matson’s fleet. The operator would control a trolley to move the lifting beam out over the ship, lower the lifting beam to pick up a container, hoist the container, and then travel toward the dock at speeds up to 410 feet per minute. At high speed, these movements would have left each container swinging from the long hoist cables, far above the deck. Les Harlander designed a special lifting spreader to solve the swing problem, testing its feasibility by building a model with his son’s Erector Set over Christmas of 1957.16
The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger Page 8