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The Box
How the Shipping Container Made the World Smaller and the World Economy Bigger
The Box (2006) tells the tale of modern transportation’s poster child, the container, and how it revolutionized the shipping industry and enabled globalization. These blinks will take you on a detailed journey through this seemingly simple but revolutionary change in global systems of trade.
- Professionals in logistics, transportation or trading
- People interested in globalization
- Every economics and business student
Marc Levinson is a journalist and author who combines economic and business strategy with a historical perspective. He has written five best-selling books and countless articles that digest complex economic issues into an easily understandable format.
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The Box
How the Shipping Container Made the World Smaller and the World Economy Bigger
- Read in 18 minutes
- Audio & text available
- Contains 11 key ideas
Synopsis
The Box (2006) tells the tale of modern transportation’s poster child, the container, and how it revolutionized the shipping industry and enabled globalization. These blinks will take you on a detailed journey through this seemingly simple but revolutionary change in global systems of trade.
Key idea 1 of 11
It’s not containers themselves that are key, but how they’ve been used.
Have you ever thought about all the different places you’ve seen shipping containers? On trains, trucks and ships; some are even retrofitted to become people’s homes! But there's more to these ubiquitous industrial objects than meets the eye.
That’s because the container isn’t just a box, but the core of an extraordinarily system that transports goods all over the world at unbeatably low prices.
On April 26, 1958, when the first 58 containers ever to be launched shipped from Newark, New Jersey, to Houston, Texas, nobody could’ve predicted the world-changing impact they would have. But today, the incredible speed with which containers load and unload has cut transportation costs so drastically that it’s the go-to solution for practically every company.
For instance, in 1961, before international container use, ocean freight costs alone comprised 12 percent of the costs of US exports and 10 percent of those for imports. This expense, coupled with taxes and other transportation-related costs, meant that international trade was rarely profitable.
In fact, freight handling at ports used to be a major expense, but containers and the level of automation they make possible have greatly reduced these costs. Containers have also completely transformed the face of manufacturing: small, local operations have given way to huge companies that buy and sell globally, which has also enabled a reduction in consumer prices.
The container fundamentally altered the scale at which goods are traded. The companies that employed them became larger, better organized and more reliable, and it was all due to the container’s place in a highly efficient system of perfectly fitting components.
For instance, a 25-ton container of coffee at a factory in Malaysia can travel 9,000 miles to Los Angeles in just 16 days. From there, it can board a train to Chicago and then a truck to Cincinnati for a total trip of 11,000 miles in a mere 22 days. That’s 500 miles a day and the total cost of shipping is less than a single first-class plane ticket.
Key ideas in this title
- It’s not containers themselves that are key, but how they’ve been used.
- Container shipping dramatically altered the world’s ports.
- Container shipping began with one man from the trucking business.
- The rise of container shipping in the United States rapidly transformed ports and jobs.
- Container standardization was an early goal – one that was difficult to attain.
- Container shipping fought an uphill battle and took years to gain its footing.
- The breakthrough for container shipping was the Vietnam War.
- Big up-front investments made container shipping a risky business.
- In container shipping, scale became the name of the game.
- The global economy transformed when the container shipping system became cheap and interconnected.
- Final summary
