Containerized Shipping Born at Port Newark

The Associated Press
Sunday, April 23, 2006; 6:05 PM

NEWARK, N.J. -- Fifty years ago on April 26, a trucker from rural North Carolina ran an experiment here that forever altered international trade and the global economy.

While many scoffed, Malcolm McLean hired a crane to hoist 58 trailer-sized steel cargo boxes onto a Texas-bound freighter. It was an alternative to the then-ubiquitous "break-bulk" shipping, the costly, pilferage-prone method dramatized in the film "On The Waterfront."

It was a revolutionary idea in shipping and a huge business risk for McLean.

He sold off the trucking firm it had taken him 20 years to build, in compliance with the era's antitrust regulations. And he retrofitted an old oil tanker, the Ideal X, with a reinforced flat deck specially designed with grooves to secure the containers in place for the maiden voyage down the Eastern seaboard and into the Gulf of Mexico.

By the time the tanker docked at the Port of Houston six days later, McLean's Sea-Land Services was taking orders to ship containers back north. Transoceanic shipping eventually followed, ushering in what observers call the biggest change in freight transport since steam engines replaced sails.

"There are few instances in history where innovation has had such a dramatic impact," Anthony Coscia, chairman of the Port Authority of New York and New Jersey, said Friday. "Malcolm McLean gave birth to a way of moving goods around the world that promoted global economic development that has been very positive for New Jersey and the U.S. economy."

Break-bulk, which is still used for true "bulk" commodities such as construction materials, involved armies of stevedores loading individual crates from a dock to a sling, which was then hoisted up and then down into a ship's hold, to be unloaded and positioned there.

Now shipping everything from clothing to razor blades to electronics in secured metal containers is the norm. Breakage and theft have been dramatically curtailed, and average shipping costs have fallen from 15 percent of retail value to less than 1 percent. At the Port Authority's New Jersey locations _ ports Newark and Elizabeth _ containerization accounts for 94 percent of the cargo, with break bulk about 1 percent; automobiles account for the remainder.

Over the years, that development set the foundation for big-box stores crammed with inexpensive items, allowing shopping to morph from necessity to entertainment. The advent of refrigerated containers meant no matter the season, grocers could offer fresh produce grown half a world away for reasonable prices.

"Products that couldn't move because of the export packaging and damage and so forth move freely now throughout the world," said Paul F. Richardson, a shipping consultant who worked side by side with McLean for Sea-Land's first 20 years. "It was a huge breakthrough."

McLean died in May 2001 at 87, two years after selling Sea-Land, then the world's seventh-largest shipper, to Denmark's Maersk for $800 million.

"I'm not sure if he graduated from high school, but he was brilliant," Richardson said. "He could do compound math in his head. He wasn't afraid of risk. In fact, I think he thrived on it."

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