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Summary of The Box, by Marc Levinson (Chapters 1, 2 & 3)


Chapter 1 the world the Box made

Because of the container, the world has changed a lot The value of the container lays in how it is used There were myriads of experiments with containers before M. McLean. His real innovation was MANAGEMENT - He understood that the true business was moving freight , rather than operating Ships - Every aspect of the loading and unloading is carefully managed using specialized software Transporting goods is not that expensive any more Although the system is efficient, it is a nightmare for-inspectors it is impossible to make sure that there are not illegal cargo in every single container The container transformed economy The container devastated certain areas of New York's and fueled growth pen others such as Oakland - Entire towns of loaders were rendered useless - Small towns mushroomed to industrialized cities (LA, Hong Kong) Domestic companies could make international business - Poor countries could start to dream on supplying wealthy ones. - China is the world workshop - Japanese eat beef from Wyoming Now Asia is the world's workshop Consumers are happy, workers are mostly screwed Shipping became so cheap that the factories could he located far away, where he labor is cheaper Being a sailor is not exotic any more. None it is just a driver. however, in some cases the conditions improved a little (For example, bargaining powers have improved) Some history; First trip 1956 the world has been transformed by this innovation There were a lot of advocates and opponents, but in the end, the Vietnam War proved how useful it was to use huge containers Currently the cost of moving goods is almost 0 and does not affect economic decisions Research for this book Impact of changes in transportation technology Steam ship Railroads Truck and passenger The importance of innovation New technology by itself has little economic benefit Is the innovators who put it to use, who finally change the world Connections between transportation costs and economic geography Who makes what where: Only in 1990 economists started to analyze transportation costs!

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Summary of The Box, by Marc Levinson (Chapters 1, 2 & 3)

Chapter 2: Gridlock on the docks

Description of the life at the pier before the container: a lot of people, a lot of Loose cargo The ships were all different and curved at the bottom Most of the cost of navigating cargo was paying to loading /unloading workers. Work conditions were harsh There were a lot of work-related back injuries Pensions were non-existent Finding work on a given day was uncertain There were many work days lost due to labor disputes Theft was a big problem The idea of a big container is really old The first were introduced in 1920 But it was a difficult and costly idea in the beginning It couldn't show any advantage over loose freight But by 1950 it had not convinced yet There was a study on transportation costs The solution to the chaos was not in the ships on the harbors ... And it was an outsider with no experience with ships who found a way to make this system work

Chapter 3: The trucker

A biography of McLean. Born in 1913, and entrepreneur by nature. Made a lot of money. Self made. Was already a millionaire when he risked everything to pursue the container business By 1955 his net worth was $25M (About $140M in 2004 dollars) But he risked everything for a loan of $50M (Not $500M as wikipedia says!) Ship mortgages were $23M (10 times his income) He was obsessive on cutting costs and engaging employees. For example, he paid a full month salary to veteran truckers whose novice trainees didn't have accidents for the first year He appointed wise engineers to create containers that could store as much as it was physically possible His contribution was to see that the business was in moving cargo, not sailing ships

Prepared by Ariadna 73

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