Malcom McLean invented shipping containers

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pages: 477 words: 135,607

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

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air freight, anti-communist, barriers to entry, Bay Area Rapid Transit, British Empire, call centre, collective bargaining, conceptual framework, David Ricardo: comparative advantage, deindustrialization, deskilling, Edward Glaeser, Erik Brynjolfsson, full employment, global supply chain, intermodal, Isaac Newton, job automation, knowledge economy, Malcom McLean invented shipping containers, manufacturing employment, Network effects, New Economic Geography, new economy, oil shock, Panamax, Port of Oakland, post-Panamax, Productivity paradox, refrigerator car, South China Sea, trade route, Works Progress Administration, Yom Kippur War

* The quantity of breakbulk shipping was measured either by weight or by “measurement tons,” a standard method for converting volume into tonnage, and these conventions were initially applied to container cargo. The capacity of containerships and cranes, however, was determined by the quantity of containers rather than their weight, and by the mid-1960s ports and ship lines began to emphasize the number of containers they handled. Raw numbers proved problematic, because they failed to distinguish between empty containers and full ones, and between large containers and small ones. In 1968, the Maritime Administration began to report container traffic in standardized 20-foot equivalent units, or TEUs. A 40-foot container represents 2 TEUs, and one of Matson’s 24-foot boxes registered as 1.2 TEUs. Chapter 12 The Bigness Complex Malcom McLean sold his stock and quietly left the board of R. J. Reynolds Industries in February 1977.

There is certainly no contemporaneous evidence for it. I suspect that the story of McLean’s stroke of genius took on a life of its own as, decades later, well-meaning people asked McLean where the container came from. As I show in chapter 2, ship lines and railroads had been experimenting with containers for half a century before Malcom McLean’s trip to Jersey City, and containers were already in wide use in North America and Europe when McLean’s first ship set sail in 1956. Malcom McLean’s real contribution to the development of containerization, in my view, had to do not with a metal box or a ship, but with a managerial insight. McLean understood that transport companies’ true business was moving freight rather than operating ships or trains. That understanding helped his version of containerization succeed where so many others had failed.

Tantlinger rushed to the shipyard, where Malcom and Jim McLean, Kempton, and Egger were jumping up and down on the roof of a container. Tantlinger had told Malcom McLean that the wafer-thin aluminum roof was strong enough to keep the container rigid, and the McLean group was trying, unsuccessfully, to disprove his claim. Sold on the merits of Brown’s containers, McLean ordered two hundred boxes and demanded that the reluctant Tantlinger move to Mobile to be his chief engineer. Part of Tantlinger’s job was to convince the American Bureau of Shipping, which sets standards for maritime insurers, that the Ideal-X would be seaworthy when loaded with containers, while the U.S. Coast Guard wanted assurance that the containers would not endanger the ship’s crew. After negotiation, the Coast Guard agreed to a test. Pan-Atlantic asked trucking company workers to load two containers with cardboard boxes filled with coke briquets, a cargo of average density and negligible cost.


pages: 319 words: 89,477

The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion by John Hagel Iii, John Seely Brown

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Albert Einstein, Andrew Keen, barriers to entry, Black Swan, business process, call centre, Clayton Christensen, cleantech, cloud computing, corporate governance, Elon Musk, en.wikipedia.org, future of work, game design, George Gilder, Isaac Newton, job satisfaction, knowledge economy, knowledge worker, loose coupling, Louis Pasteur, Malcom McLean invented shipping containers, Maui Hawaii, medical residency, Network effects, packet switching, pattern recognition, pre–internet, profit motive, recommendation engine, Ronald Coase, shareholder value, Silicon Valley, Skype, smart transportation, software as a service, supply-chain management, The Nature of the Firm, too big to fail, trade liberalization, transaction costs

Like Olympic snowboarders practicing moves in 2009 that were undreamed of in 2006 (such as the double-corked 1260—a spin cycle of three and a half rotations and two off-axis flips), or competitive surfers learning the next aerial maneuver, they know that today’s level of achievement will not be sufficient tomorrow. You might think that such goals are only for performers at the highest levels—Olympic athletes, CEOs, best-selling recording artists. But in truth they’re for everyone. In fact, one of our examples, Malcom McLean, who changed the way the world shipped everything with the introduction of the shipping container in 1946, started off driving a truck for someone else. It is no accident that these early examples of performance improvement come from various edges, because it is exactly at the edge that the need to get better faster has the most urgency. Incumbents at the core—which is the place where most of the resources, especially people and money, are concentrated, and where old ways of thinking and acting still hold sway—have many fewer incentives to figure out the world, or to discover new ways of doing things, or to find new information.

In the business world, it has been exceptional individuals who have managed to reshape the terms of competition in markets, industries, and even entire economic sectors. In Salesforce.com’s early years, for example, founder and CEO Marc Benioff painted a compelling view of how to reshape the software industry around a new form of delivery: software as a service. The Fung brothers revolutionized supply-chain practice in the apparel industry. Malcom McLean led Sea-Land to a preeminent position in the containerized shipping business by driving standardization around his innovative container designs. And Dee Hock helped Visa make an exemplary shaping move in the 1970s at a time when banks had gotten into difficulty by aggressively sending out preapproved credit cards (even to newborns and family pets) without the infrastructure needed to support such large-scale transactions, or to sufficiently guard against fraud.

Google’s AdSense platform uses technology to connect advertisers, content providers, and potential customers, but its real value consists in a set of protocols and practices governing how ads are submitted, presented, and paid for, enabling participants to generate value from the platform with minimal investment of time and effort and minimal oversight from Google. Malcom McLean, the founder of Sea-Land and a successful shaper of the global shipping industry, employed a very different kind of shaping platform to provide interaction leverage. He developed an innovative design for four corner fittings and twist-lock mechanisms on shipping containers. By making these designs available to the broader shipping industry, he encouraged a broader set of investments by port authorities, crane companies, and shipping companies that accelerated the adoption of containerized shipping. Visa, in the early days of the credit-card business, created a robust shaping platform that merged both development leverage and interaction leverage.


pages: 401 words: 119,488

Smarter Faster Better: The Secrets of Being Productive in Life and Business by Charles Duhigg

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Air France Flight 447, Asperger Syndrome, Atul Gawande, Black Swan, cognitive dissonance, Daniel Kahneman / Amos Tversky, David Brooks, epigenetics, Erik Brynjolfsson, framing effect, hiring and firing, index card, John von Neumann, knowledge worker, Lean Startup, Malcom McLean invented shipping containers, meta analysis, meta-analysis, new economy, Saturday Night Live, Silicon Valley, Silicon Valley startup, statistical model, Steve Jobs, the scientific method, theory of mind, Toyota Production System, Yom Kippur War

The way we choose to see our own lives; the stories we tell ourselves, and the goals we push ourselves to spell out in detail; the culture we establish among teammates; the ways we frame our choices and manage the information in our lives. Productive people and companies force themselves to make choices most other people are content to ignore. Productivity emerges when people push themselves to think differently. When I was working on this book, I came upon a story that I loved, one of my favorite bits of reporting. The tale involved Malcom McLean, the man who essentially created the modern shipping container. McLean died in 2001, but he left behind videotapes and numerous records, and I spent months reading about him, as well as interviewing members of his family and dozens of his former colleagues. They described a man who had relentlessly chased an idea—that shipping goods inside of big metal boxes would make docks more productive—and how that insight eventually transformed manufacturing, the transportation industry, and the economies of whole continents.

Less than a quarter mile away, in another portion of the sea that seemed essentially the same, that diversity would plummet and you might find only one or two kinds of coral and plants. Similarly, some pockets of Australia’s rain forests contained dozens of different types of trees, lichen, mushrooms, and vines flourishing side by side. But just a hundred yards away, that would dwindle to just one species of each. Connell wanted to understand why nature’s diversity—its capacity for creative origination—was distributed so unevenly. His quest began in the Queensland rain forests: 12,600 square miles that contain everything from forest canopies to eucalyptus groves, as well as the Daintree tropical forest, where conifers and ferns grow right at the edge of the sea, and the Eungella National Park, where trees are so dense that, at ground level, it can be nearly lightless in the middle of the day.

“There were no negative thoughts, there were no positive thoughts. There were no thoughts at all. They hadn’t become less intelligent or less aware of the world. Their old personalities were still inside, but there was a total absence of drive or momentum. Their motivation was completely gone.” II. The room where the experiment was conducted at the University of Pittsburgh was painted a cheery yellow and contained an fMRI machine, a computer monitor, and a smiling researcher who looked too young to have a PhD. All participants in the study were welcomed into the room, asked to remove their jewelry and any metal from their pockets, and then told to lie on a plastic table that slid into the fMRI. Once lying down, they could see a computer screen. The researcher explained that a number between one and nine was going to appear on the monitor.


pages: 559 words: 155,372

Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio Garcia Martinez

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Airbnb, airport security, Amazon Web Services, Burning Man, Celtic Tiger, centralized clearinghouse, cognitive dissonance, collective bargaining, corporate governance, Credit Default Swap, crowdsourcing, death of newspapers, El Camino Real, Elon Musk, Emanuel Derman, financial independence, global supply chain, Goldman Sachs: Vampire Squid, hive mind, income inequality, interest rate swap, intermodal, Jeff Bezos, Malcom McLean invented shipping containers, Mark Zuckerberg, Maui Hawaii, means of production, Menlo Park, minimum viable product, move fast and break things, Network effects, Paul Graham, performance metric, Peter Thiel, Ponzi scheme, pre–internet, Ralph Waldo Emerson, random walk, Sand Hill Road, Scientific racism, second-price auction, self-driving car, Silicon Valley, Silicon Valley startup, Skype, Snapchat, social graph, social web, Socratic dialogue, Steve Jobs, telemarketer, urban renewal, Y Combinator, éminence grise

His beard and hair became forests, his arms and shoulders cliffs, his head a summit, and his bones rocks. Each part increased in bulk till he became a mountain, and heaven with all its stars rests upon his shoulders. —Thomas Bulfinch, Bulfinch’s Mythology FEBRUARY 28, 2013 Any idea who Malcom McLean was? I bet not. But that one man changed our economy more than practically anyone else in the twentieth century. McLean was the inventor of the intermodal container, those metal boxes piled into immense heaps on the cargo ships coming from China. The genius of the container is that the entire workflow around transporting physical goods is standardized on the same 8×8×40 box. Manufacturers load goods onto eight-foot-wide palettes straight into the box. The box becomes a freight car when loaded onto railroad wheels, and once it arrives at a ship, it is directly hefted aboard via those immense cranes that dot every modern port.

The analytics software that slices and dices your data by publisher, ad size, and placement on the page also assumes the standard sizes. It’s containerization applied to paid media, and in general, it works. But there are some ships that consider themselves either too big or too important to accept containers—either because they don’t like the look of them on the deck, or because they claim that moving freight is really a side business and not their mission in life. So if you want to move anything through them, you suddenly have to repack everything in whatever arbitrary, random containers these ships accept. This situation is what we politely call “native ad formats” in the ads business. Those ships are products like Google Search, Facebook, and Twitter. Either because they started as user-focused viral plays unconcerned with monetization (Facebook, Twitter), or because they very intentionally bucked a going standard, basically because they could (Google Search), the net result is that standard ad formats get no play.

By looking at the bid, and estimating the likelihood of a click, Google takes the product of the two (which is how much it will make per query) and picks the highest. Then it displays the associated ad that the advertiser has created and uploaded to Google for that keyword. Actually printing physical money would be harder. So how many such search queries, or “keywords,” in Google-speak, are there? The second edition of the Oxford English Dictionary, released in 1989 and since supplemented, contains 291,000 word entries. The Woordenboek der Nederlandsche Taal, a dictionary of the Dutch language and the largest monolingual dictionary in the world, runs to 50,000 pages and 431,000 entries. Both works are dwarfed by the size of the keyword lists maintained by those lexicographers turned word merchants, the search engine marketers. Like a stock portfolio manager, who keeps a set of assets with a theoretical and current price, the paid search manager maintains encyclopedic word lists along with dollar-sign values, and constantly adjusts bids to reflect realized performance.