Thread by @categorical_imp

Now that you've taken notice of the ship that has blocked the #Suez, this story from the 1950s about shipping and a man named Malcolm McLean should interest you 👇 [thread]

His actions destroyed old professions, created new industries, contributed to the rise of Asian shipping powers incl. China🇨🇳, and impacted nearly everyone on Earth. Here's how: (1/n)

Shipping is an ancient way to move goods around, but container ships are rather modern, going back only to 1956. So 1 out of 10 people in the world are actually older than container shipping! (2/n)

Malcolm McLean was an American businessman who "containerized" global shipping. He invented the intermodal shipping-container: basically a standard sized box that could be moved from ship to rail to road. (3/n)

Before containerization, goods were loaded onto vehicles from the factory & taken to a port-warehouse where they'd be offloaded & stored. When the next ship came, they'd be moved to the side of the ship, to be lowered or carried into the hold and packed by dock workers. (4/n)

McLean used to run a trucking company. He would get stuck in traffic jams while delivering lorries across the country.

He realized: shipping parts of truck > shipping whole truck > driver lorry across country (in terms of ease) (5/n)

On 26 April 1956, he converted a tanker into a ship able to carry 56 "boxes". In retrospect it makes sense, right? Different kinds of things in the same type of boxes. And many boxes, nearly arranged, piled on top of one-another.
At that time, this was considered insane. (6/n)

"The industry is already built for different types of boxes/storerooms for different types of things. What will standardization of boxes achieve? And why should we put rectangular boxes in curved boats?" they asked. (7/n)

This was a problem of both supply and demand. Not enough clients who wanted to ship in boxes. Few ships suited for moving boxes.

There was also a container "rebalancing" problem. If a container went from A to B, it also needed to be brought back from B to A. (8/n)

How did McLean solve this? When he implemented the new system, he changed previous routines, infra and mindset (this was his power-move💪).

Others who tried before him had tried to "fit" it into their old systems. They failed. McLean succeeded. (9/n)

The new system brought loading cost down from $5.86/ton to 16c/ton (98% cost reduction💥)

His company's name was changed to "Sea-Land Service, Inc". It was profitable by 1961 and he kept adding routes and buying bigger #ships. (10/n)

But until the late 1960s, many ports didn't have the cranes to lift containers on/off ships. Change was slow in an industry steeped in tradition. Unions resisted ideas that threatened their livelihood. (11/n)

But soon the advantages became obvious. 2nd order effects created a self-reinforcing +ve feedback loop.

More #harbours for containers> more #container ships> shipping cheaper> increased range of goods worth shipping> more traffic> bigger container ships> more infra... (12/n)

This was not just another way of shipping goods. It was a whole new way of doing #business!

Soon, Sea-Land Service Inc expanded to Vietnam (which produced 40% of the company's revenue). Then to Hong Kong, Thailand, Singapore, Taiwan and the Philippines. (13/n)

Sea-Land Corporation went on to become a publicly traded company on the NYSE in 1984.

It was acquired by Maersk in 1999.

McLean died in 2001, aged 87. (14/n)

By 2010, approximately 90% of non-bulk cargo worldwide was moved by containers stacked on transport ships!

26% of all container transshipment was carried out in China (another 6% in Hong Kong).

The US handled only 8%. (15/n)

At some point, container ships will be constrained in size only by the depth of the Straits of Malacca, one of the world's busiest shipping lanes, linking the Indian Ocean to the Pacific. This so-called MALACCAMAX size constrains a ship to dimensions: 470 m x 60 m wide. (16/n)

Which brings us back to the ship stuck in the Suez Canal: how big is it? #MVEverGiven is 400m long x 59m wide.

So it would fit the Straits of Malacca, but is unfortunately stuck in the Suez!

If you liked this thread, please RT😊

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