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

"Robert Solow", air freight, anti-communist, barriers to entry, Bay Area Rapid Transit, British Empire, business cycle, 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, Jones Act, 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, zero-sum game

* 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

Albert Einstein, Andrew Keen, barriers to entry, Black Swan, business process, call centre, Clayton Christensen, cleantech, cloud computing, commoditize, corporate governance, creative destruction, disruptive innovation, Elon Musk, en.wikipedia.org, future of work, game design, George Gilder, intangible asset, Isaac Newton, job satisfaction, Joi Ito, knowledge economy, knowledge worker, loose coupling, Louis Pasteur, Malcom McLean invented shipping containers, Maui Hawaii, medical residency, Network effects, old-boy network, packet switching, pattern recognition, peer-to-peer, 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, the new new thing, 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: 522 words: 150,592

Atlantic: Great Sea Battles, Heroic Discoveries, Titanic Storms & a Vast Ocean of a Million Stories by Simon Winchester

British Empire, cable laying ship, Charles Lindbergh, colonial rule, friendly fire, Intergovernmental Panel on Climate Change (IPCC), intermodal, Isaac Newton, Louis Blériot, Malcom McLean invented shipping containers, Nelson Mandela, North Sea oil, Piper Alpha, polynesian navigation, supervolcano, trade route, transatlantic slave trade, transcontinental railway, undersea cable

It was a development that may have reduced costs and enhanced efficiency—but at a stroke it also stripped ocean trading of all its remaining romance and allure. Container ships—and they are now by far the biggest vessels in the world; the biggest of all at the time of writing, the Danish MV Emma Maersk, weighs in at 170,000 tons and can carry fifteen thousand containers at speeds of up to thirty-one knots—must be among the ugliest of man-made creations since Le Corbusier’s public housing projects. Those who retain a fondness for clipper ships, for quinquiremes, or even for dirty British coasters long rue the day that these boxy monstrosities, which must be among the most familiar emblems of today’s globalized world, were ever invented. But Malcom McLean—who tried his first ship out in the Atlantic Ocean, in April 1956, running a converted U.S. Navy tanker, the Ideal-X, from Newark to Houston, with fifty-eight containers—knew that in the shipping industry time was everything and money was everything, and that to load a ton of cargo by hand cost nearly six dollars, while to do so on a containerized ship—indeed, on the Ideal-X itself, that late spring day—cost only sixteen cents.

One of the most effective early ways of bringing order to what was a historically ramshackle industry—an industry unchanged in its operating principles since the Phoenicians loaded murex shells in Mogador three thousand years before and shipped them back to Tyre—was that taken in the mid-1950s, when an American trucking executive named Malcom McLean hit on the idea of packing cargoes into enormous steel boxes—shipping containers. Up until then, cargoes—whether they were bags of potatoes, bales of cotton, bottles of whisky, motorcars, or machine guns—had all been loaded deep into a ship’s hold by cranes, then stacked as best as their shapes and sizes would permit, by gangs of expensive, often corrupt, and rigorously unionized stevedores—in the kinds of scenes so memorably recorded by Elia Kazan in On the Waterfront. The advantage of using standard-sized containers, twenty or forty feet long, and into which makers and merchants packed their own goods at the factory or the farm, was that the boxes could be put onto trucks or railroad flatcars, taken to the dockside, and loaded swiftly by specially made cranes onto the upper parts of a waiting ship as well as down in the holds.

New rules have recently been put in place, in both the Baltic and the North Sea, limiting the amount of sulfur in marine diesel fuel, in the hopes of cutting pollution and lessening the possibility that the satellites will be able to spot the ship tracks from the clouds the vessels leave above them. The world-changing idea of placing marine cargoes into same-size steel boxes, and creating the so-called container ship, belongs unequivocally to a former truck driver from North Carolina, Malcom McLean. There are also some brand-new ideas. One that has gained some traction, literally, is to have an immense sail, or a spinnaker-like kite, that can be played out ahead of a great cargo vessel when the wind is right, to help tow her along even though her engines might be cut off. A German firm equipped a bulk carrier, the Beluga SkySails, with a computer-controlled kite-sail and in January 2008 conducted the first test sail from Bremerhaven to the coal port of Guanta in Venezuela—sticking to the tradition that almost all test runs of every kind of new maritime technology are made in the ocean where they will likely be most used: the Atlantic


pages: 339 words: 95,270

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein

Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, Berlin Wall, Bernie Sanders, Branko Milanovic, Bretton Woods, British Empire, business climate, business cycle, capital controls, centre right, collective bargaining, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, deglobalization, deindustrialization, Deng Xiaoping, Donald Trump, Double Irish / Dutch Sandwich, Fall of the Berlin Wall, falling living standards, financial innovation, financial repression, fixed income, full employment, George Akerlof, global supply chain, global value chain, illegal immigration, income inequality, intangible asset, invention of the telegraph, joint-stock company, land reform, Long Term Capital Management, Malcom McLean invented shipping containers, manufacturing employment, Martin Wolf, mass immigration, Mikhail Gorbachev, money market fund, mortgage debt, New Urbanism, offshore financial centre, oil shock, open economy, paradox of thrift, passive income, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, Scramble for Africa, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Wolfgang Streeck

Getting them their gear from the docks required trucks driving on dirt roads for weeks, often in hostile territory. Desperate for better results, the U.S. Army hired Malcom McLean, the original innovator of container shipping, to build and operate a container port at Cam Ranh Bay. He had two conditions: each box would be packed with a single type of item, and each box would be packed for a specific unit, which would be responsible for returning it. Within months, McLean had solved the army’s logistics problem and shown the world what was possible with containerization. (He also profited handsomely by having his ships and empty boxes pick up Japanese goods for the return trip to California.) In the 1970s, the world’s shipping companies embraced the container, borrowing heavily to build new vessels able to carry far more boxes than the generation commissioned in the 1960s.

That limited the risk of damage, which produced the added benefit of lower insurance premiums for customers. Containerization also cut the opportunities for theft by longshoremen and teamsters, which explains why Scotch whisky exporters were among the earliest adopters. Moreover, container ships, unlike traditional cargo ships, could be loaded and unloaded simultaneously. When the first container ships were introduced, these innovations cut the time in port from days to hours. Ships now carry about ten times as many containers as they did in the 1960s, but the biggest ones still spend far less time in port than the typical freighter in the precontainer era. American entrepreneurs began commercializing container transport in the late 1950s, but even after demonstrating the potential for cost savings and speed, the idea did not fully catch on until the 1980s. Longshoremen unions vociferously opposed changes that would eliminate most of their jobs.

There was no sense in producing goods for export unless the customer had already ordered it, and there was little reason to order goods from abroad unless local substitutes were literally unavailable. Prepacking goods at the factory into standardized metal containers revolutionized this process. The same box could be used interchangeably across all modes of transportation. Trucks and trains could arrive at a port, drop off their cargo, get new containers, and roll off to their next destination in a matter of minutes. Even heavy containers could be moved quickly and safely by a handful of people using cranes. The hard work of packing and unpacking would only be done at the beginning and end of the entire trip, rather than at the beginning and end of each leg. That limited the risk of damage, which produced the added benefit of lower insurance premiums for customers.


pages: 401 words: 119,488

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

Air France Flight 447, Asperger Syndrome, Atul Gawande, Black Swan, cognitive dissonance, Daniel Kahneman / Amos Tversky, David Brooks, digital map, 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, William Langewiesche, 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: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

"Robert Solow", accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Andrei Shleifer, anti-communist, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Berlin Wall, Bob Noyce, Branko Milanovic, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, credit crunch, Credit Default Swap, crony capitalism, currency peg, debt deflation, Deng Xiaoping, discovery of the americas, Donald Trump, Erik Brynjolfsson, European colonialism, eurozone crisis, falling living standards, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, Frederick Winslow Taylor, full employment, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, global supply chain, global value chain, Gordon Gekko, greed is good, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, TaskRabbit, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, Yom Kippur War, zero-sum game

In addition, labour relations were poor and strikes were common: dockers’ wages could eat up half the costs of an ocean voyage.48 Indeed, an academic study found that “the handling of cargo was almost as labour-intensive after World War II as it was during the beginning of the Victorian Age”.49 In the 1950s, a businessman called Malcom McLean tried to tackle the inefficiencies of the industry. He wanted the containers carried on his company’s trucks to be loaded straight on to ships. But this required wholesale changes in the design of ships, the operation of docks, and the working conditions of dockers; something that was bound to be opposed by the unions. So he established a new port in Newark, New Jersey, on the other side of the river from Manhattan. On April 26th 1956, the first container ship, SS Ideal-X, set off for Houston, Texas. Cranes that could lift the boxes on and off the redesigned ships had to be installed. And agreement was needed on a standard for container size. Initially, this was based on a 20-foot-long box called a TEU (twenty-foot equivalent unit) although modern boxes tend to be 40 foot long (or 2 TEUs).

All these materials must be brought to the factory where they are turned into the finished paste, and packaged into cardboard with a logo that experts have designed to catch your eye on the supermarket shelf. Then the product is sent by truck to distribution centres and eventually stacked on shelves by retail employees. And then think big. Travel to a container port, like Felixstowe in Suffolk, on England’s east coast, and you are in a land of giants. When I visited, a Maersk container ship, around 400 metres long, was ready to depart the dock. Its deck was filled with metal containers piled eight high; as many containers were below deck as above it. Three cranes, 80 metres tall, sat idly alongside. Their loading job was done. Within a few weeks, thousands of consumers would be using stuff taken from one of those containers. The world economy involves this mixture of the big and the small on a daily basis. The monetary sums involved are so vast – trillions of dollars – that it is easy to forget that the items themselves are the ones we use every day: the food we eat, the clothes we wear, the devices we use.

— 2 — AGRICULTURE The Hanging Gardens of Boston A snowy car park off interstate 93 in the south end of Boston is the last place you would expect to find a farm. It is admittedly a very small farm; a converted container of the kind that fills the world’s merchant ships. Inside the box you can find lettuce, kale, flowers, even wasabi; all growing in a carefully temperature-controlled environment. As you enter the container, the first thing you see is a set of trays. Seeds have been planted in them, inserted into small plugs of peat moss. Above the trays are a series of plastic containers filled with nutrients that are being drip-fed to the plants through pipes. The seeds grow in these trays for two to three weeks before moving to the back half of the container where they hang vertically. This arrangement saves a lot of space; a container can grow as much produce as two acres of farmland. The concept is known as hydroponics, whereby plants grow in water with the help of artificial light.


The New Map: Energy, Climate, and the Clash of Nations by Daniel Yergin

3D printing, 9 dash line, activist fund / activist shareholder / activist investor, addicted to oil, Admiral Zheng, Albert Einstein, American energy revolution, Asian financial crisis, autonomous vehicles, Ayatollah Khomeini, Bakken shale, Bernie Sanders, BRICs, British Empire, coronavirus, COVID-19, Covid-19, decarbonisation, Deng Xiaoping, disruptive innovation, distributed generation, Donald Trump, Edward Snowden, Elon Musk, energy security, energy transition, failed state, gig economy, global pandemic, global supply chain, hydraulic fracturing, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), inventory management, James Watt: steam engine, Kickstarter, LNG terminal, Lyft, Malacca Straits, Malcom McLean invented shipping containers, Masdar, mass incarceration, megacity, Mikhail Gorbachev, mutually assured destruction, new economy, off grid, oil rush, oil shale / tar sands, oil shock, open economy, paypal mafia, peak oil, pension reform, price mechanism, purchasing power parity, RAND corporation, rent-seeking, ride hailing / ride sharing, Ronald Reagan, self-driving car, Silicon Valley, smart cities, South China Sea, sovereign wealth fund, supply-chain management, trade route, Travis Kalanick, Uber and Lyft, uber lyft, ubercab, UNCLOS, UNCLOS, uranium enrichment, women in the workforce

But it would not have happened without a revolution that was born in the U.S. port of Newark, New Jersey—a revolution in shipping that would change the map of global trade and prove transformative for the world economy—and for China. The revolution was instigated by someone largely unknown in China and indeed the rest of the world—an entrepreneur from a small North Carolina town once known as Shoe Heel. Yet Malcom McLean, otherwise known as “Idea-a-Minute” McLean, is one of the most consequential figures in the history of transportation. Starting off with a tiny trucking company that he built into a major enterprise, McLean went on to unleash the container revolution in world shipping that is the foundation of today’s global economy. There is nothing romantic or flashy about a container; it is a steel box that might be twenty or forty feet long and eight and a half or nine and a half feet high. As one author has written, “it has no engine, no wheels, no sails; it does not fascinate those captivated by ships and trains and planes, or by sailors or pilots.”

His next step was to detour ships on their way back from Vietnam, now empty of cargo, to Japan to pick up containers filled with inexpensive goods destined for U.S. customers. Manufacturers in the Asian “tigers”—South Korea, Taiwan, Hong Kong, and Singapore—followed suit. It was the spread of this innovation, and the networks and system that implemented it, that integrated East Asia into the world economy.2 In 1980, the year Deng began his reforms, McLean initiated the first container service to China. Two years later, the state-owned China Ocean Shipping Company launched container service to the West Coast of the United States. China’s rapid economic growth would not have been possible without the container fleets to carry its goods to global markets with very little additional cost. This applied both to goods manufactured in China and the supply chains for which it was the hub.

“We are convinced that we have found a way to combine the economy of water transportation with the speed and flexibility of overland shipment,” McLean announced. This was the beginning. By the early 1960s, containers were becoming a real business, with McLean and his company in the lead. No longer did shipments have to be broken down into boxes and crates and sacks and hoisted around by hordes of longshoremen, taking up many days in port and adding substantially to costs. Instead, packed into containers, they could be lifted by cranes, with the operator high above in a cabin, and moved between shore and ship. The world of longshoremen that had been depicted just a couple of years earlier in the 1954 film On the Waterfront was on its way out. In 1965, the first regularly scheduled container ships began to operate between the United States and Europe. But McLean had his eye on Asia, beginning with supplying U.S. troops in Vietnam.


pages: 559 words: 155,372

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

Airbnb, airport security, always be closing, Amazon Web Services, Burning Man, Celtic Tiger, centralized clearinghouse, cognitive dissonance, collective bargaining, corporate governance, Credit Default Swap, crowdsourcing, death of newspapers, disruptive innovation, drone strike, El Camino Real, Elon Musk, Emanuel Derman, financial independence, global supply chain, Goldman Sachs: Vampire Squid, hive mind, income inequality, information asymmetry, interest rate swap, intermodal, Jeff Bezos, Kickstarter, Malcom McLean invented shipping containers, Marc Andreessen, Mark Zuckerberg, Maui Hawaii, means of production, Menlo Park, minimum viable product, MITM: man-in-the-middle, move fast and break things, move fast and break things, Network effects, orbital mechanics / astrodynamics, Paul Graham, performance metric, Peter Thiel, Ponzi scheme, pre–internet, Ralph Waldo Emerson, random walk, Ruby on Rails, Sam Altman, Sand Hill Road, Scientific racism, second-price auction, self-driving car, Silicon Valley, Silicon Valley startup, Skype, Snapchat, social graph, social web, Socratic dialogue, source of truth, Steve Jobs, telemarketer, undersea cable, urban renewal, Y Combinator, zero-sum game, 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.


pages: 650 words: 155,108

A Man and His Ship: America's Greatest Naval Architect and His Quest to Build the S.S. United States by Steven Ujifusa

8-hour work day, big-box store, British Empire, Charles Lindbergh, computer age, glass ceiling, haute cuisine, interchangeable parts, Malcom McLean invented shipping containers, Mercator projection, Ronald Reagan, the built environment, trade route

Top Navy brass began to feel that Gibbs & Cox was “trailing the field, with only a joint General Electric nuclear contract to show.”3 Commercial shipping, meanwhile, was also undergoing a revolution. Until the mid-1950s, cargo had to be offloaded from trains and trucks, hauled to the pier, and lowered into cargo holds. Shipping entrepreneur Malcom McLean’s Sea-Land company changed that by developing a logistical breakthrough called containerization. This was a method by which a sealed container could be lifted directly from trucks and trains and lowered onto a vessel’s deck, and vice versa. Containerization saved shippers a lot of time and money, in large part because it eliminated the need for armies of longshoremen. Frederic Gibbs’s idea to build fully integrated sea-land terminals—revolutionary in 1915—was becoming a reality fifty years later.

But by 1916, with trains moving in the tunnels, Peters needed a new project. He knew all along that all of the freight and passenger traffic coming into New York could be monopolized if the piers could be directly tied into the Pennsylvania Railroad and the LIRR. After his secretary told him about his uninvited visitors, Peters strode out of his office, his rosy face showing a big smile. As Peters thumbed through a black leather-bound volume containing the proposal, he said he loved the idea of a Montauk terminal. But when he saw the superliner design, his eyes bulged. It was huge. Not only that, but its proposed turbo-electric power plant had the stamp of approval from William Emmet and its hull by none other than Admiral David W. Taylor. The railroad man stared intently at the two young men and asked what engineering qualifications they had.

They hauled in each of the four maritime commissioners for intense questioning. The answers were not good ones. Commissioner Grenville Mellon, the man who signed the superliner construction contract, admitted that he understood “only vaguely the procedures involved in the staff’s calculations, [and] he claimed to have detected in them mathematic errors which he failed to correct because they ‘were all recited, they were in the record.’”39 Congressman Dawson could barely contain his rage. “You are not given a blank check,” he said, “to say ‘I believe this is convincing, and upon this I am going to do as I please with the Government money.’”40 The commissioner who completely broke ranks was Raymond McKeough, who now rehashed all the objections he had made before finally voting to approve the contract. McKeough told the committee that the commission’s goal of a fixed $28 million contribution from the United States Lines resulted in a “reckless abandonment of an orderly, systematic approach to the required determinations.”41 Truman, meanwhile, thought about abolishing the Maritime Commission as an independent body and putting it under the direct control of one of his cabinet secretaries.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

"Robert Solow", 3D printing, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, creative destruction, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, falling living standards, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, Gini coefficient, Hyperloop, income inequality, income per capita, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, labor-force participation, labour mobility, Loebner Prize, low skilled workers, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Norbert Wiener, oil shock, On the Economy of Machinery and Manufactures, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, robot derives from the Czech word robota Czech, meaning slave, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, social intelligence, speech recognition, spinning jenny, Stephen Hawking, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

In the 1970s truck drivers became the new American cowboys and were frequently romanticized in blockbuster films like Smokey and the Bandit. While the trucking industry itself fueled American productivity, it also had significant spillover effects on transportation and trade more generally. In conjunction with the rise of the trucking industry, the container revolution was an engine of postwar growth. And containerization emerged directly from trucking. Malcom McLean, a trucking entrepreneur, invented the container as a mean of integrating the segmented industries of shipping, trucking, and railroads. The first successful container shipment dates from April 26, 1956, when McLean’s Ideal-X made its maiden voyage from Port Newark to Houston, Texas. This seemingly unspectacular shipment was, together with Christopher Columbus’s discovery of the New World, one of the key events in the history of trade.

Contemporaries hailed it as “an extension of our mass production techniques into the carrying of overseas trade.”75 Besides eliminating twelve separate handling steps in the moving of goods between the manufacturer and the consumer, container terminals are estimated to have increased the volume a dock laborer was able to handle from 1.7 to 30 tons per hour.76 Although the construction of such terminals was capital intensive, faster rates of throughput saved substantial amounts of capital—not to mention the capital savings associated with the associated decline in theft. A well-known joke at the New York wharves before the age of containers was that the dockmen’s wages were “twenty dollars a day and all the Scotch you could carry home.”77 Containerization put the lid on the Scotch, reducing the cost of insuring cargo in the process. With the advent of the container, winds of change swept through American harbors. These winds meant stormy seas for longshoremen. “Just how far it will go, no one knows, but the idea of moving domestic and overseas cargo in boxes or containers is swelling like a tidal wave,” the New York Times noted in 1958.78 Like many transformative technologies, containerization was not welcomed by everyone. Before the age of containers, ports were places crowded with thousands of longshoremen loading and unloading ships.

Manufacturing Industries” (Working Paper 4845, National Bureau of Economic Research, Cambridge, MA). 74. D. M. Bernhofen, Z. El-Sahli, and R. Kneller, 2016, “Estimating the Effects of the Container Revolution on World Trade,” Journal of International Economics 98: 36–50. 75. G. Horne, 1968, “Container Revolution Hailed by Many, Feared by Others,” New York Times, September 22. 76. Ibid. 77. “The Humble Hero: Containers Have Been More Important for Globalisation Than Freer Trade,” 2013, Economist, May 18, https://www.economist.com/finance-and-economics/2013/05/18/the-humble-hero. 78. R. H. Richter, 1958, “Dockers Demand Container Curbs,” New York Times, November 27. 79. Ibid. 80. On the federal court’s dismissal, see D. F. White, 1976, “High Court Review Sought in Case Involving Jobs for Longshoremen,” New York Times, October 17. 81.


pages: 757 words: 193,541

The Practice of Cloud System Administration: DevOps and SRE Practices for Web Services, Volume 2 by Thomas A. Limoncelli, Strata R. Chalup, Christina J. Hogan

active measures, Amazon Web Services, anti-pattern, barriers to entry, business process, cloud computing, commoditize, continuous integration, correlation coefficient, database schema, Debian, defense in depth, delayed gratification, DevOps, domain-specific language, en.wikipedia.org, fault tolerance, finite state, Firefox, Google Glasses, information asymmetry, Infrastructure as a Service, intermodal, Internet of things, job automation, job satisfaction, Kickstarter, load shedding, longitudinal study, loose coupling, Malcom McLean invented shipping containers, Marc Andreessen, place-making, platform as a service, premature optimization, recommendation engine, revision control, risk tolerance, side project, Silicon Valley, software as a service, sorting algorithm, standardized shipping container, statistical model, Steven Levy, supply-chain management, Toyota Production System, web application, Yogi Berra

A single container might hold many individual items, but since they were transported as a group, transferring the items between modes of transport was quick work. Customs could approve all the items in a particular container and seal it, eliminating the need for customs checks at remaining hops on the container’s journey as long as the seal remained unbroken. As other modes of transportation adopted the standard shipping container, the concept of intermodal shipping was born. A container would be loaded at a factory and remain as a unit whether it was on a truck, train, or ship. All of this started in April 1956, when Malcom McLean’s company SeaLand organized the first shipment using standardized containers from New Jersey (where Tom lives) to Texas. (Levinson 2008). * * * 3.3 Level of Resource Sharing In a “public cloud,” a third party owns the infrastructure and uses it to provide service for many customers.

Unlike a virtual machine, which is allocated a large chunk of RAM and disk, containers consume resources at the same fine-grained level as processes. Thus they are less wasteful. Processes in a container are controlled as a group. If the container is configured to have a memory limit, the sum total of memory used by all processes in that container cannot exceed that limit. If the container is allocated a certain amount of disk bandwidth, that limit is enforced on the processes in the container as a whole. Solaris containers, called Zones, can be allocated network interfaces and have their network bandwidth regulated to control bandwidth resource contention. Containers on Linux can assign a different amount of disk cache to each container so that one container’s buffer thrashing will not affect the buffers of another container. Processes in a container are isolated in other ways.

Processes in a container are isolated in other ways. A container can kill or otherwise interact with only processes in its container. In contrast, processes that are not in containers can kill or interact with all processes, even ones in individual containers. For example, the shell command ps, when running in a FreeBSD container (called a “jail”), displays only processes running in that container. This is not a parlor trick; the container has no visibility to other processes. However, when the same command is run on the host from outside any container, it shows all processes, including those inside the each container. Thus, if you are logged into the main host (no particular container), you have global visibility and can serve as administrator for all containers. Each container has its own copy of the packages, shared libraries, and other supporting files that it requires.