Box Movers

When it isn’t too cloudy (weather-wise or work-wise), my office has a great view of Elliott Bay in Seattle, where I see the ships come and go (airplanes too):

hat tip SteveC

My new indispensable companion is MarineTraffic.com which uses a network of crowdsourced receivers to pull data off the transponders most ships have and plot them on a map.  Here is a live view of what is floating around:


You can follow specific vessels like the Shanghai Express pictured above on their travels (and you won’t see anything if it is out of range of transceivers in the middle of the ocean).

As yet, no enterprising and cutting edge Somali pirate has joined the network and set up shop to track shipping traffic in that area:

image

More broadly, the rise of container shipping is fascinating and a dramatic tale of disruption.  There is a great book, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, that tells the humble shipping container’s story. 

The story begins not so long ago in 1958 with a trucking entrepreneur who gets into shipping.  Shipping before containers is unbelievably inefficient, with freight being packed and repacked repeatedly over the course of a trip, getting damaged or stolen, taking forever to get its destination and the whole industry was intensely regulated.  Thinking end-to-end and “intermodal” was a profound breakthrough but it still takes a couple decades to play out as the transportation business, their customers and governments needed time to wrap their heads around and embrace the shift.

The geographic consequences are fascinating.  Ports win by offering lower costs through volume and the ability to load and unload quickly.  The winners see increasing returns and the losers disappear.  Some cities like New York, San Francisco and London were the biggest ports in the world, but they bungled the transition to containers and their ports disappeared.  Some of them like New York spent hugely to defend the old approach and wasted tons of money.  Other cities won with their early commitment to containers.  Some winners like Los Angeles and Long Beach are not particularly surprising but other, unlikelier ports like Seattle and Felixstowe in England have prospered because of their early bet on containers overcame the disadvantages of their small local markets.  The drive towards bigger ships and bigger ports continues today, with individual ships carrying  thousands of containers.  Most of the world’s biggest ports are now in Asia.

It is also a good tale of labor strategy in the face of technological change.  The longshoremen initially fought the coming of the container (and thereby preserve perks like the right to steal loose cargo), but ultimately the longshoremen on both the east and west coast did deals that protected existing jobs at the expense of new employees.  But the fact there are no longer longshoremen in New York City, once the US’s biggest port, shows perils of flouting change.

It really took until the 1980s for shipping containers to start to significantly drive down shipping prices, as deregulation was required in addition to both shippers and shipping companies fully understanding the economics of containers and embracing them on an end-to-end basis.  But costs have plummeted and in many ways shipping costs are invariant with distance today as a result.  Our just-in-time, globalized economy wouldn’t exist without containers and the ability to cheaply move goods, including intermediate goods, around the world cheaply and reliably.

5 thoughts on “Box Movers

  1. Bill Hill

    Outstanding, Charles! Things you take for granted and forget how revolutionary they were… In Scotland, Greenock bet heavily on containers and the port of Glasgow completely disappeared.

  2. Charles

    Bill – there are a bunch of ports that got shuffled in prominence based when and whether they embraced containers.Jon – good parable. The fact containers are so distance invariant in costs makes it surprising good metaphor.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>