August 2008 | Commentary | Supply Chain Perspectives

Inventions Light the Way

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The public knows Thomas Edison as the man who invented the light bulb. But what Edison really invented was a system for generating and distributing electricity into cities, and eventually into rural communities. This was a gigantic and, at the time, novel undertaking.

In our industry, Malcom McLean is recognized for inventing the shipping container. The idea sprung from his experience as a trucker trying to deliver loads in Hoboken, N.J., in 1937.

McLean felt frustrated by having to wait while the longshoremen manually loaded and unloaded cargo, which could take an average of eight days. It also took many men and cost a bundle. That's when McLean first thought of lifting an existing truck trailer directly onto a ship.

After building a successful trucking business, McLean returned to his container idea 20 years later. Is invention really the persistence of a thought?

At that time, there were two types of commercial hauling vessels: cargo ships and oil tankers. It would have been hard, if not impossible, to lift a trailer onto a cargo ship because the deck was already dominated by cranes, cargo, and access to cargo holds.

Oil tankers, on the other hand, carried nothing above their decks. So McLean bought an oil tanker business and, with financing help from Walter Wriston, the eventual president of Citibank, he bought Waterman Steamship Corporation.

After a good deal of experimentation, McLean came up with a shipping box that measured 8 x 8 x 33 feet. He converted the deck of his Ideal X vessel to receive these boxes in 1956, and loaded 53 of them into what became the first containerized ship.

Don't think marching bands and a celebration accompanied this feat. In fact, he elicited an opposite reaction as longshoremen and their supervisors did not see this idea as a positive movement.

The Ideal X sailed successfully from Port Newark, N.J., to Houston, Texas. While McLean's company, Sea-Land Service Inc., endured a long period of trial and error and tight money squeezes, Wriston's support never wavered.

As McLean's containerization successes increased, he took the company to Europe in 1966, then on to Asia, where shipping costs were substantially lower. His new box could cut costs by up to 90 percent, and that was hard to argue.

The need for efficient shipping to and from Vietnam during the war in some ways clinched the deal.

During the next several decades, containerization dominated world trade and vindicated McLean's vision and practice. The original 53 container capacity had grown to thousands and were transported on specially-designed containerships.

Even McLean, if he were alive today, might be surprised by their size, efficiency, and trade dominance. He died in 2001 in relative obscurity.

Thinking Outside the Box

Malcom McLean invented more than just a shipping box. He invented a supply chain system that used the box and containerization as he intended 71 years ago.

It may have helped that he started his career as a truck driver and owner because he approached shipping with a fresh eye. He surveyed the ships with their deep cargo holds, on-board cranes and nets, and dozens of longshoremen and thought he could do better. And he did.

Malcom McLean changed the world as fundamentally as Thomas Edison. Edison gave the world an electricity system and McLean made global supply chains an economic reality.

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