The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger

by Marc Levinson

  And if land-transport costs, labor concerns, and crime were not enough to deter businesses from shipping through New York, there were the port’s decrepit facilities. The East River pier at Roosevelt Street dated to the 1870s, the Hudson pier at West Twenty-sixth Street to 1882. The city-owned pier at Christopher Street had been built in 1876. These piers, and dozens like them, were narrow fingers protruding into the harbor, designed for the days when ships would turn ninety degrees from the channel, point their bows to ward the shore, and tie up to the dock for days on end. Some piers were not even wide enough for a large truck to turn around. For the privilege of leasing one of these obsolete facilities, ship lines paid between $0.96 and $2.00 per square foot per year, three to six times the going rate in other East Coast ports. The city had launched a program to renovate and fireproof its piers in 1947, but officials judged the cost of building new piers to be prohibitive. Many piers were literally collapsing into the water. Abandoned pilings and floating debris from fallen piers were obstacles to navigation as well as an eyesore. “By 1980, it will be hard to find space in a whaling museum for piers that met the requirements of 1870 and were condemned as obsolete as long ago as 1920,” Port Authority executive director Austin E. Tobin commented in 1954.12

  Despite its name, the Port of New York Authority was a latecomer to maritime affairs. The major activity of the bistate agency since its founding in 1921 had been building and operating bridges and tunnels; after its early efforts to rationalize the tangle of rail lines and terminals in the New York region were beaten back by the rail roads, the Port Authority retreated from involvement in freight transportation.13 But, as political scientists Wallace S. Sayre and Herbert Kaufman noted in 1960, the independence and broad political support enjoyed by New York’s public authorities, including the Port Authority, encouraged them to “seek out new outlets for their energies.” In the 1940s, the governors of both New York and New Jersey asked the agency to get involved with shipping, for entirely different reasons. New York governor Dewey thought that the Port Authority might be able to push organized crime off the docks. New Jersey governor Walter Edge wanted it to develop piers on the New Jersey side of the harbor. Tobin and Port Authority chairman Howard Cullman jumped at the opportunity, calculating that taking on some port projects could build support for the Port Authority’s expansion into the business they most wanted it to enter: airports.14

  In 1947, the New York World Trade Corporation, a new state authority backed by key business leaders, proposed to take over all of the city’s docks and later to acquire all private docks and waterfront warehouses as well. New York mayor William O’Dwyer rejected the plan and asked the Port Authority to look at the city’s piers. After a three-month study, the Port Authority offered to sell $114 million of revenue bonds and build thirteen new steamship berths, four rail road carfloat terminals, and a 1.5-million-square-foot produce terminal, while paying the city $5 million per year in rent. This would have been no small undertaking: the amount involved, the equivalent of almost $900 million in 2004 consumer prices, was more than the city had spent on its docks over decades. The proposal quickly encountered heavy fire. The ILA was opposed. So was the city’s Department of Marine and Aviation, which ran the docks; it had waged a bitter and unsuccessful battle to keep the Port Authority from taking over the city’s two main airports in 1947, and it did not want to give up another of its functions. Most of all, city politicians did not want the Port Authority on their turf. City officialdom was convinced that the piers were a potential gold mine, not a badly outdated piece of infrastructure. As Robert F. Wagner, then Manhattan borough president and a member of the city’s governing Board of Estimate, asked later, “The piers were making money; why didn’t they take over the sanitation department instead?” The Board of Estimate rejected the Port Authority’s offer in 1948 and turned down a revised proposal in 1949.15

  While New York officials thought they could modernize the city’s piers without the Port Authority’s involvement, the financially troubled city of Newark, New Jersey, had no such illusions. Its money-losing municipal docks were in a state of physical collapse. Newark agreed to lease its docks (and its airport) to the Port Authority late in 1947. Between 1948 and 1952 the agency spent $11 million to dredge channels and rebuild wharves. It then announced construction of the biggest terminal yet on the New Jersey side, designed for the Waterman Steamship Company, which would be moving across the harbor from Brooklyn. The Waterman terminal would have a fifteen-hundred-foot wharf running parallel to the shore for faster docking and easier loading—a feature no New York City pier could match. Watching the construction in Newark and the defection of a major steamship operator, New York’s city controller suggested that perhaps the city should give up its docks after all. “For some time the Port Authority dock control plans have looked good to us,” editorialized the New York World-Telegram. “Continued rejection can mean only that the city wants to hang on to waterfront control for political purposes.” A Port Authority spokesman declared that the agency was not inclined to begin negotiations with New York City again.16

  Late in 1953, as the Waterman terminal neared completion, the Port Authority first heard of McLean Trucking’s desire to build a terminal on New York Harbor. A trucking company was an odd candidate to lease prime waterfront land, and its plan to drive trucks aboard ships was even odder. The timing, however, could not have been better. Port Authority officials were eager to draw additional business to build upon Port Newark’s success, and the agency was uniquely positioned to serve McLean Trucking’s needs. On the Newark waterfront it could offer space to marshal trucks, nearby rail lines, and easy connections to the newly built New Jersey Turnpike. Thanks to its ability to issue revenue bonds, the Port Authority had the means to finance any new facilities that would be required. All of these were advantages that New York City could not match. Malcom McLean and A. Lyle King, the agency’s director of marine terminals, quickly struck a deal.17

  The Port Authority proceeded to exercise its new waterfront muscle. After signing McLean, it proposed to build a terminal for rubber importers at Port Newark—a terminal whose prospective tenants would relocate from cramped quarters in Brooklyn. In mid-1955, it finally got a toehold on the New York side of the harbor by purchasing two privately owned miles of Brooklyn waterfront, wharves that it had declined to acquire twice previously but now found politically opportune to buy. Proclaiming its interest in Brooklyn provided cover for another investment in New Jersey: a $9.3 million, four-berth terminal at Newark for Norton Lilly & Co. in November 1955, which led to that ship line’s move from Brooklyn to the New Jersey side of the harbor.18

  Then came the most aggressive move of all. On December 2, 1955, New Jersey governor Robert Meyner announced that the Port Authority would develop a 450-acre tract of privately owned tidal marsh just south of Port Newark. The new Port Elizabeth, the largest port project ever undertaken in the United States, was planned eventually to accommodate twenty-five oceangoing vessels at once, enabling New Jersey to handle more than one-fourth of all general cargo in the Port of New York. Previously, the Port Authority had shown little interest in Elizabeth’s marshlands. McLean’s idea of putting truck trailers on ships changed that view entirely. Now, port planners foresaw a resurgence of coastal shipping, and the new Port Elizabeth would have ample wharf and upland available for “the proposed use of large shipping containers on specially adapted vessels.” There might not even be a transit shed, the most expensive part of pier construction. The first containership had yet to set sail, but the Port Authority was making clear that the future of container shipping would be in New Jersey, not in New York.19

  The frenzy of activity on the New Jersey side of the harbor caused alarm in New York City. In the past, the New Jersey docks had been notable for their lack of activity; the modest traffic through Port Newark, mainly lumber, accounted for only a couple of percent of the port’s nonoil cargo through the 1940s. As ship operators relocated from New York, however,
its share would surely grow. With the amount of general cargo flat, every ton handled in New Jersey meant one ton less handled in New York, draining jobs from the city.20

  This simple calculus was a problem for New York politicians. Robert F. Wagner, familiar with the docks from years as Manhattan borough president, had been elected mayor in 1953 after assembling an unusually broad coalition of labor unions and ethnic groups. The one major bloc he failed to capture was the Italians, who voted over whelmingly for incumbent mayor Vincent Impellitteri. Gaining sup port from the group that supplied most of New York’s dockworkers may have been part of Wagner’s motivation in boosting Department of Marine and Aviation outlays to $13.2 million, more than double the previous level, in his first capital budget, announced in late 1954. Verbal weapons were soon unsheathed. In the summer of 1955, city marine and aviation commissioner Vincent O’Connor charged the Port Authority with trying to “sabotage” city efforts, in the face of “a growing City determination to meet the challenge of its waterfront without yielding its precious waterfront properties to Port Authority control.” O’Connor, a lawyer, was close to the ILA, and he shared its concern about the loss of jobs. That September, Mayor Wagner made pier reconstruction one of his top four capital-spending priori ties, along with education, transit, and pollution control.21

  Concern about the docks reached to Albany as well. New York governor Averell Harriman was sensitive to city objections that the Port Authority was promoting New Jersey at New York’s expense, but he also knew that the city lacked the money to rebuild its piers. A week after the plans for Port Elizabeth were announced, Jonathan Bingham, a top Harriman aide (and former campaign speechwriter for Wagner) called Matthias Lukens, Tobin’s deputy, and Howard Cullman, the agency’s chairman, to report that the governor was “disturbed” about Norton Lilly’s move from Brooklyn to New Jersey. “He also expressed the opinion he was not sure that we should be spending such money to take business away from New York City,” Lukens reported in a confidential memo for his files. Ac cording to Cullman, “[Bingham] said he understood completely that the New York piers were in shocking condition, but he did not think the Governor should come out publicly and say the Port of New York Authority should run them.”22

  The container was not yet reality in 1955, and given Malcom McLean’s status as a shipping-industry outsider, his plans had so far drawn little attention. With Mayor Wagner committed to keeping shipping in New York, O’Connor came forth with a six-year plan to build new piers and transit sheds, and the city began to pump large amounts of money into the docks. The 1956 capital budget included $14.8 million for waterfront construction as the initial installment on a port program that was estimated to cost $130 million. The plans were state-of-the-art for the mid-1950s, with piers parallel to the shoreline, separate terminal levels for passengers and freight, and paved patios that allowed trucks to back up to high loading docks on the land side of the transit sheds. There would be five new warehouses to handle rail freight lightered across the harbor and a big new terminal for Cunard’s transatlantic passenger liners. The crown jewel, clearly intended as a slap in the Port Authority’s face, was a $17 million pier with a cargo and passenger terminal for Holland-America line. After sixty-six years in New Jersey, that company would buck the trend that the Port Authority had unleashed and would move to Manhattan.23

  After decades of inflation, the raw numbers are inadequate to con vey the scope of the city’s plans. Mayor Wagner’s proposed six-year port reconstruction scheme was to cost $130 million in 1956 dollars—the equivalent of $800 million in 2004 dollars. Across the country, the growing Port of Los Angeles had spent $25 million on construction over the ten-year period from 1945 to 1954; Wagner proposed to spend two-thirds of that amount on the Holland-America terminal alone.

  None of these proposals, of course, could do much about the underlying problems of the city’s docks. Costs were simply uncompetitive with those at other ports. The fundamental geographic disadvantages remained. The new lighter terminals might make it easier to handle rail freight destined for New York, but rail freight in tended for an outbound ship would still have to be lightered across the harbor, off-loaded onto a pier, and then reloaded onto an ocean going vessel. Trucks headed for the docks would still have to fight traffic in the Holland and Lincoln tunnels and along the waterfront. And, of course, rebuilt wharves would do nothing about the port’s labor problems, problems so severe that the reopening of one of the first piers rebuilt by the city was delayed by a dispute over which ILA members would receive priority in hiring. O’Connor told ILA leaders directly in the summer of 1955 that the union’s practices were “a stumbling block for the city in its efforts to rent good piers in certain areas.”24

  Wagner’s own City Planning Commission was skeptical of O’Connor’s port projects and recommended that the city restart negotiations to transfer its docks to the Port Authority; it “felt the Port Authority could assure greater development and utilization of the port with benefits to the City’s economy.” The mayor was unresponsive. Large-scale building was a hallmark of Wagner’s tenure, and he had no intention of ceding waterfront reconstruction to an agency over which he had no control. Wagner was close to organized labor, and the city’s labor leaders rightly feared that a Port Authority takeover would mean abandonment of some of the docks. Wagner’s lack of an ethnic base in New York politics—“There weren’t too many German-Americans who voted in New York,” re called Thomas Russell Jones, an influential black politician of the era—made it essential for him to seek support in black, Irish, and Italian neighborhoods reliant on waterfront jobs. In this he succeeded: in his first reelection campaign, in 1957, Wagner captured about half the Italian vote, a big improvement over 1953. Business backed the port renovation effort as well. The Downtown-Lower Manhattan Association, a new civic group started by David Rockefeller of Chase National Bank, urged that all piers in lower Manhattan, save four on the East River, be retained for commercial ship ping. “We support the present program of the Department of Marine and Aviation to continue to seek suitable piers in this area and for their modernization and rental on a self-sustaining basis,” the association said in its initial plan, released in 1958.25

  Port spending took on unprecedented proportions. In September 1957, Mitsui Steamship Company agreed to move to a new $10.6 million city-owned terminal in Brooklyn, and Holland-America signed a twenty-year lease for the new terminal in Manhattan. By 1957, O’Connor was envisioning $200 million of waterfront investment by 1962—the equivalent of $1.4 billion in 2004 dollars. Talk of selling the piers to the Port Authority subsided. For their part, Tobin and King were now convinced that the container was the future, and the Port Authority lost interest in taking over city piers that would never have the acreage or transport connections for containers. Although the Port Authority was proceeding with plans to turn twenty-seven outmoded piers in Brooklyn into twelve modern ones, the agency understood that it was in a race to recover its in vestment before container shipping made the reconstructed piers obsolete. “We already knew that we were building something [in Brooklyn] that would pay itself back, but it wasn’t the future,” re called Guy F. Tozzoli, then the Port Authority’s head of port planning. The agency’s greater concern was that the city was unleashing a subsidy war that could depress pier rents. Tobin attacked the “utter inadequacy” of the city’s lease with Holland-America, contending that it involved a city subsidy of $458,000 a year, creating a “new policy of undercutting established pier rental levels by subsidizing private shippers.” O’Connor fired back that the “port octopus” was exerting “all its propaganda efforts to thwart the City in the desire of New York to keep its waterfront under the control of its citizens rather than yield it to a bi-state group which thrives on its lack of direct responsibility to the public.”26

  The City Planning Commission, meanwhile, was promoting the view that the port might not be the city’s economic future after all. It wanted new office and residential buildings along th
e East River in lower Manhattan, and suggested in 1959 that rebuilding derelict piers for shipping was not the best use of precious waterfront land. O’Connor responded by enlisting the support of Robert Moses, the city’s powerful parks commissioner and a member of the Planning Commission, and then by attacking the Planning Commission itself. Wrote O’Connor: “The assertion, elaborately made by the Commission, that the potential of the Port of New York must be judged by its recent past, rather than by an affirmative anticipation of its future, is an example of negative, rather than constructive planning. It would appear to be inconsistent with the dynamism of New York.”27

  Left unsaid was that much of the city’s investment was already going to waste. In 1955, when O’Connor first proposed building five new terminals to handle cross-harbor lighter traffic, lighters moved 9.5 million short tons of cargo between New Jersey and the New York City docks. By 1960, after the city had spent $10 million on new lighter terminals, one-third of that traffic had vanished, and the trend was inexorably downward. The rebuilt Pier 57 on the Hudson River, custom-designed for Grace Line’s combined passenger and freight service, was modern enough, but the rapid expansion of air travel had made it obsolete almost before it opened. New piers alone clearly would not be enough to preserve the pattern of port commerce in New York City. The container, hardly noticed by New York officials, was about to become the final nail in the coffin.28