ASSIGNMENT

CONTAINERIZATION AND MULTIMODAL TRANSPORT

ARYA E V
MBA PSM
2005304010
 “THE BOX”
- MARC LEVINSON
How the Shipping Container Made the World Smaller and

the World Economy Bigger.

In Marc Levinson’s book, The Box: How the Shipping Container Made

the World Smaller and the World Economy Bigger, you’ll see how the

slow and costly process of shipping was transformed into an industry

with an impact reaching far beyond the world of only moving goods.

Here are 3 lessons this book has me thinking more about:

1. Container shipping began with one man from the trucking

business.

2. The Vietnam War was the real breakthrough in container shipping.

3. The global economy transformed when this shipping system

became cheap and more interconnected.

I. How can you justify the title of the book? Is it relevant in modern

times?

Today, we rarely give a second thought to the developments that have

us to reap the benefits of Amazon Prime and next-day shipping. We

probably never think about the boxes our prized possessions arrive in.

But the history of shipping is actually rife with long and arduous

struggles over the development of shipping containers. In order for us

to enjoy the benefits of modernization, many rules have been re-

written and many people have lost their jobs. But although initiating

progress was scary, the story of Malcolm McLean and the world’s

first standardized shipping containers indicates that change is possible

if you’re willing to work for it. It may take years of intense struggle,

but McLean’s battle forever changed the face of modern shipping. It

also enhanced the onset of globalization and enabled countries around

the world to enjoy the benefit of international trade.

II. How do you connect the book with what you are studying in

containerization papers? Don’t you think so the book lacks the

modern aspects of containerization?

Every day, thousands upon thousands of colorful containers, filled

with every kind of good imaginable, from socks to iPods, are stacked

and unstacked by enormous cranes and loaded onto massive ships at

shipping ports where they’re sent off to the other side of the world: a

marvel of order and efficiency.

Believe it or not, shipping used to be a slow and costly process. But

the container turned the shipping industry on its head – and its

impact reaches far beyond the shipping world.

In the book – “The Box” by Marc Levinson, the key takeaways or the

ways in which shipping has changed the world are:

1. All ships, trains, trailers and cranes for freight are built to the exact

same standards. On a ship the tolerance on the rails that lock the

containers in place is 1/4". It doesn't matter if it is a refrigerated

container, a double-doors one or any of the 16 types of container, all

are built to the same external and weight bearing parameters. It

doesn't matter if it is in Egypt, Sydney or Cape Town, all the ports are

built the same way. All cargo is tracked in the same way on

computers.

2. The heavily-protective and Marxist trade unions that fought so hard

for their workers in places such as New York and London and

Liverpool in the UK lost out to ports built specifically for containers

that had no prior agreements with dockers (longshoremen).

Rotterdam in Holland and Tilbury in England got the business.

3. The merchant navy employed many men on cargo ships. 1,000

yard container ships carry a crew of between 6 and 20 from cheap,

non-unionised countries such as the Philippines.

4. Smuggling of illegal items and people became much easier.

Searching the boxes and barrels of a cargo ship is one thing.

Searching through thousands of containers locked at point of loading

and not unlocked until they reach their final destination is quite

another.

5. What was once a week long sojourn in port as cargo was unloaded,

trucked away and new trucks and trains arrived with more cargo for

loading is accomplished in 24 hours. As soon as one set of cranes has

cleared an area, another crane is placing on new containers. No more

people seeing the world working on cargo boats.

6. Because of economies of scale, the reduction in labour costs and

the greater efficiency of shipping, freight costs have gone down

enormously, so people previously unable to afford certain first-world

luxuries now consider them as everyday items. Even in the remotest

villages of the poorest countries where there is no national grid, just

one generator inevitably there will be mobile phones.

7. What is designed in one country may be made with fabric from a

second, manufactured in a third and distributed in a fourth. The owner

of the business might live in a fifth. Goods are manufactured where

labour is cheapest. One pair of my Old Navy jeans was made in

Vietnam, another identical pair in Haiti.

8. It costs 70% extra to ship an empty container back to its home port.

But only 10% to dump it. This has resulted in parks of rusting

containers inelegant in their uselessness. There are small industries

reusing these containers as homes, bars, even swimming pools and

small industrial etc units. But nothing like enough to rid the world of

these piled-up, ugly big boxes.

9. And for this we have to thank Malcom McLean, a trucker turned

genius entrepreneur with a vision for globalization.

In regions like the Caribbean with small islands, containers are

broken down into small units for shipping to even smaller islands on

cargo boats. Men standing on the goods 'armed' with machetes slash

the polythene wrapping or cut down between boxes unloaded from

 the containers. This is why all four of my leather chairs came slashed

making them immediately 'shabby chic' or worse. This is just part of

the price one pays to live in paradise and not be fully globalised as

yet.

The book lacks the modern aspects of containerization because the

book was published in the year 2006. After 2006, many changes had

been happened in the field of containerization and shipping. The

latest technology which was adapted in the 21st century and also the

different types of containers ie, the refrigerated containers are not

mentioned in the book. Hence the book lacks the modern aspects of

containerization.

III. What are the missing key concepts of containerization in the

book? Identify the major lacunas of the book ?

The box has missing concepts when it tries to explain the economies

of container shipping. The lack of early data on container shipping is

probably one cause. Levinson doesn’t focus just on the shipping

container but rather on how it was necessary or important to modify

trading substitution and relationships. This book is more of

 chronology or events when and where happened and who did it. It

would be fascinating if it have a more in depth contents of

containerization. Around the world, the port industry as invested a lot

in order to cope with the technological demands of containerization.

The development of modern container terminals and commercial

cargo handling equipments and developments of more efficient

organizational forms including privatization are not discussed in the

book. The wide spread use of ISO standard containers has driven

modifications in the other freight moving standards gradually forcing

removable truck bodies into standard sizes and charging completely

the world wide use of freight pallets that fit into ISO containers. The

book is majorly focused in history aspects rather than the modern

aspects. The book also misses the technological aspects of trade

across the world.

IV. Analyze the scenarios of containerization before and after the

publication of the book.

• Prior to Containerization multiple handling of cargoes other than bulk

commodities were moved package by package piece by piece with

multiple handling resulting in damage, pilferage and time loss.

• Containerisation has its origin in coal mining regions in England in

the late 18th century.

• In 1766 James Brindley designed the box boat stravations with 10

wooler containers to transport Coal from Worley Delph to

Manchester by Bridgewater Canal.

• In 1795 Benjamin Outram opened the little Eaton Gateway upon

which coal was carried in built at his Butterlay Ironwork. The wagons

take the form of containers.

• By 1830, railroads on several continents were carrying Containers.

• By the 1840's, iron boxes were in use as well as wooden ones. The

early 1900s saw the adoption of closed container boxes designed for

movement between road and rail.

• In 1917, Benjamin Franklin Fitch inaugurated exploitation of an

experimental installation for transfer of the containers called

demountable bodies.

• Prior to world war 2, many European Countries independently

developed container systems.

• In 1967 US Government invited sea- land to start a container service

to South Vietnam providing 45 percentage of the company's revenue

in 1968/69.

• To reduce reduction in labor of dock servicing time, Mclean followed

Roy Fruchoul's lead and become vigilant about standardization.

• In 1969, Reynolds agreed to buy Sea- land for 530 million dollar in

cash of stock and formed a holding company named R. J Reynolds.

• In 1974, Reynolds put more than 1 billion dollars into building huge

terminals in New Jersey and Hong Kong and adding its fleet of

containerships.

• As early as 1960, international group already recognized the potential

of Container Shipping. In 1961, the ISO set standard sizes.

After the Publication of the book,

• In 2012 Global Container fleet reached 32.9 Million TEU.

The way in which shipping has changed the world

• All ships, trains, trailers & Cranes for freight are built to the exact

same standards. On a ship the tolerance on the rails that lock the

containers in place is 1/4”. It doesn't matter if it is a refrigerated

container, a double door one or any of the 16 types of container, all

are built to the same external and weight bearing parameters.

• The heavily protective and Marxist trade unions that fought so hard

for their workers in places such as New York & London and

Liverpool in the UK last out to ports built specifically for

containers that had no prior agreement with dockers.

• Ships of any a crew of between 6 and 20 from cheap, non-

unionized countries.

• Smuggling of illegal items and people become frequent and lots of

measures are taken to eradicate these.

• It Cost 70% extra to ship an empty container back to its home

port. By 10% to dump it. It has resulted in parks of rusting

containers.

• What was once a week long sojann in port as cargo was unloaded,

trucked away and new trucks and trains arrived with more cargo

for loading is accomplished in 24hrs. As soon as one set of cranes

has cleared an area, another crane is placing a new container ie,

more throughput.

Shipping had previously been so expensive that they were best

made locally even if the raw material had to be imported.

Containerization has transformed this to a cheaper trade. The

loading and unloading containers and port stay of a container ship

has been reduced during these years.