If you visit the grocery store beside your house, almost everything that's sold there
is probably made somewhere else outside your country.
That yellow banana, fresh meat, milk, you name it.
However, that wasn’t the case all the time.
In fact, it was impossible just 70 years ago.
Because what happened then, changed the course of history.
When you think of a great businessman, the first people who come into mind are Steve
Jobs, Bill Gates, Jeff Bezos, how about Rockerfella?.
Despite their great contributions, this guy had a much greater influence in the business
world.
Meet Malcolm Mclean. because his invention, literally created globalization.
and if it wasn’t for him, the world wouldn’t be the way we know it today.
because he invented this box (shipping container).
Without this box, you wouldn’t have that iPhone or the wide varieties of fruits in
the store or even your clothes.
Ikea would be only in Sweden, Gucci in Italy and iPhones would have to be manufactured
in the United States, which would have made them much more expensive than their already
a thousand dollar price tag.
Maybe that will make you feel good after throwing another grand on that iPhone.
For most of history, Shipping goods around the world was – expensive, risky and time-consuming
so only expensive goods were shipped to the elites.
International trade was not even an option for most businesses.
Before the 1960s, ships would spend as much time in the ports as they would in the sea
because loading and unloading goods from the ship was a huge challenge.
Trucks would get the goods to the ship then people would manually get them to the top
of the ship, just imagine the number of people you need to do that, the shipping cost was
at an all-time high.
On top of that, goods were often stolen, the ship's capacity was limited.
all that made shipping only more expenses.
A cargo ship, the SS Warrior, would carry merchandise from Brooklyn ( New York ) to
Bremerhaven in Germany.
On that trip, it would only carry a little over 5,000 tons of cargo, from food to household
goods, letters to vehicles.
Some 200 thousand items would be carried separately.
The record-keeping alone, tracking all those cargoes as they moved around the warehouses,
was a nightmare.
But the real challenge was physically loading ships.
The longshoremen who were responsible for the job would pile barrels of olives and boxes
of soap for example onto a wooden pallet on the dock.
The pallet would be lifted, and loaded in the hold of a ship, from where more longshoremen
would carry each item into every corner of the vessel, then packing the cargo so it wouldn’t
shift when they are at the sea.
This was far more dangerous work than any other work at that, including construction.
In a large port, someone would be killed every other week.
the ship would take seven to ten days to load and unload, which equaled to the amount of
time it would take to cross the Atlantic Ocean.
In total, the cargo would cost around $420 a ton to move, adjusted to inflation.
And delays were quite typical.
since the cargo needed to be distributed by land then.
the whole journey might take three months.
70 years ago, shipping goods around the world was extremely expensive, but there had to
be a better way, that’s more affordable and faster?
Right?!
That's what McLean said when he was waiting for days in his truck to load his goods to
the ship.
How about we put all the cargo into big standard boxes, that would fit both in the truck and
the ship and move the boxes.
That would make things a lot easier.
But it wasn’t as easy as it sounds, because this idea wasn’t new and it had been tried
multiple times throughout decades but it didn’t catch on.
The problem was, the ports, shipping, and trucking companies couldn’t agree on a universal
standard.
Some wanted smaller boxes, others bigger or shorter because every company wanted the box
to suits its needs.
And then there were the unions who resisted the idea at all cost.
It might seem like everyone would welcome such an invention, since it would make the
job easier and safer, but it also meant fewer jobs.
However, that didn’t stop Malcolm Mclean from giving it a shot.
He was a trucking entrepreneur and didn’t really know much about shipping.
But he clearly imagined a steel box for trucks that would easily be loaded on the top of
the ship.
He spent the next 20 years, saving money, planning and finding ways to make it legally
happened.
And on April 26th, 1956, he finally got the chance to realize his plan.
He risked all of his savings, secured a 22 million dollar loan and purchased SS Ideal
X, a World War 2 oil tanker and sailed from Newark, New Jersey to Houston, Texas.
the containers were unloaded from the ship to the trucks where they were taken to their
final destination.
That single journey changed the course of history.
If hand-loading a ship cost $5.86 per ton.
Using containers, it costs only 16 cents a ton to load a ship, 36-times cheaper.
That was a revolution.
But the biggest change was the time it spent on the port, loading and unloading were reduced
from 10 days to few hours which meant fewer port expenses and more earnings because trucks
make money when they are at the sea.
Of course, unions were fiercely fighting against it but when Malcolm sold the idea of containership
to the US military.
There was no turning point!
Everybody knew that is the future!
With the war in Vietnam, It was a nightmare to ship equipment, so they used Malcolm’s
idea.
On the way back (from Vietnam) his empty container ships collected cargo from the world’s fastest-growing
- economy at that time, Japan.
And that was the beginning of the trans-pacific trading relationship.
You see, when it comes to shipping, there is nothing else that would come even close
in terms of cost.
It's so cheap that it's even considered almost free.
But the world had to agree on a universal standard that would everyone use. and it became
the 20-foot long container.
You can fit 48 thousand bananas in it, 400 flat-screen TVs, 200 mattresses, 60 refrigerators,
4000 shoe boxes, or 2 cars.
That changed the entire business model of the industry, Ships were no longer in the
business of shipping goods.
Because they got into shipping boxes.
It didn't really matter what these containers had inside, no one really checked them or
even care, they just relied on what the documents say.
the challenge was to move boxes from point A to point B as fast and as efficient as possible.
That's why we began building bigger ships to the point where the biggest ship today
(OOOLC HONG KONG) can carry up to 21,413 containers, or 42826 cars, or 8 565 200 flat-screen TVs.
Its 400 metered long, 5 times longer than being 747-8.
Here is a question for you! how many people do you think, manage a ship with 21 thousand
containers?
Believe it or not, 20-30 people at best.
That's a massive reduction in labor cost
However, not everything is sunshine and rainbows.
Even though THe US navy has a big presence almost everywhere that protects the ships
from possible attacks, some places are quite vulnerable and Ships often face pirates.
Sometimes they can take control over an entire ship.
It's a separate business by itself.
If you thought that pirates were a thing of the past, well, I am sorry to disappoint you.
In fact, ships cru often hire bodyguards to protect them.
But, why aren’t we building even bigger ships?
How about a ship that would carry 50 thousand containers?
Even if it might be engineeringly possible to build one, they will not be able to cross
the tiniest canals in the world.
The Panama Canal, that connects the Americas, strait of Melacca, which is the most important
canal in Asia and the Suez Canal that connects Asia and Europe.
They are the 3 tiny routes that connect the world.
SO, if the ship won’t be able to cross the Panama Canal, for instance, it will have to
take a longer route all around South America.
If they are longer than 78 meters, they won’t fit in the Suez canal and will have to make
it all across the south Atlantic ocean!
If it wasn’t for this innovation, you would not have bananas, because the USA gets its
bananas from Guatemala, Ecuador, Costa Rica, Colombia, and Honduras.
In 2010, these five countries shipped an estimated 3.9 million metric tons (mmt) of fresh bananas
to the United States, accounting for 94 percent of total US banana imports.
With the trade war that’s going on between uncle Sam and China, apple can shift its production
to Taiwan to keep producing iPhones, I can’t say it would be much more affordable but not
as expensive as if they would be manufactured in the United States, and that’s all thanks
to this little box that was invented 70 years ago by Malcolm Maclean.
And now it's your turn.
First, give this video a thumbs up and let me know what do you think is going to be the
next innovation that’s going to have as much influence in the world as this steel
box had.
Thanks for watching and until next time!