📖 The Box

How the Shipping Container Made the World Smaller and the World Economy Bigger

2006. Marc Levinson

This book was recommend by Spotify CEO Tobi Lütke during a recent interview he did with Tim Ferris. I have followed Tobi online for a while and am always really impressed by him, so a book recommendation from him holds weight for me. (Here’s another great interview with him on Shane Parish’s The Knowledge Project Podcast).

In this conversation with Ferris, Tobi mentioned the interesting story of Malcom McLean “around the invention of the shipping container”, and the incredible impact it has had on society.

“The world has sorted itself into solutions that have long gone”, Tobi said, referring to how much activity is created because companies have lost sight of what the customer is actually trying to accomplish. “The most impressive story along these lines that I have ever come across is the story of Malcom McLean...He is one of those entrepreneurs who would absolutely be on your podcast if he was alive right now.”

In 19th century, great strides were made in the US’s transportation infrastructure, with businessmen like Vanderbilt amassing great fortunes and influence through shipping, railroads, and trucking companies. Malcom McLean was born at the start of the 20th century, and left school in 1931 in the depths of the great depression. He wasted no time in getting started however and within 3 years, at age 21, had started a trucking company, delivering oil to petrol stations using a rented old truck and trailer. And so began McLean’s rags-to-riches story, in which he continued to display “immense ambition”.

As he grew his trucking company, he encountered what the whole industry was already well aware of: the incredibly high cost of freight handling at the time. Whole communities were built around the port activities associated with unloading trucks piece-by-piece, and then repacking their content onto ships.

By 1956, McLean had a hugely successful tucking company. Concerned over increasing highway traffic, he decided to buy two World War II tankers, and started shipping his fright up and down the east cost, and later along the gulf coast too.

Over the following years McLean would have to overcome huge resistance at every turn. Regulatory bodies, unions, the other transportation industries, competitors, they all fought his ideas and expansion at every turn. To take just one example, when two of his containerships arrived at Puerto Rick for the first time, they were left stranded for 4 months while local “longshormen” refused to unload them until he agreed to hire “large, twenty-four-man gangs” to unload them.

Although everyone underestimated the significance of the shipping container and the change it would bring, competitors did start getting involved at an increasing rate. McLean however would always out pace them. When the Matson Navigation Company tried to get involved, they started by creating an in-house research department and commissioning a two year study. But McLean in that same time had moved from concept to functioning business. His “initial technology had been designed on the fly…on the assumption that it could all be improved once the business was up and running.”

In 1962, his company ‘Sea-Land’ became the first and only intracoastal ship line, and by 1966 he was shipping across the Atlantic; bringing military goods over to Europe, and then filling them with whiskey for the westbound run. Never before had a single company used it’s own trucks to drive it’s own trailers on board it’s own ships.

The cost saving was huge, and the world changed as a result.

“How innovation really works”

In his later years, McLean would talk about his “Aha!” moment where he came up with the idea of the shipping container. A young man, waiting at a pier to unload his truck, when genius struck and he had the epiphany that it would be quicker to just hoist the entire truck body on board. But Levinson didn’t include this story in the book because he believes it never happened.

“Malcom McLean was by no means the inventor of the shipping container”. Metal cargo boxes of various shapes and sizes had been in use for decades before McLean got involved. But is was McLean who’s accomplishments transformed the industry and the economy.

What business are you in?

In the preface, the author Levinson says that in his view McLean’s real contribution “had not to do with a metal box or a ship, but with a managerial insight.” Which was that transport companies were in the business of moving freight, not operating ships, trains, or trucks. Theodore Levitt at the time used these same examples in his popular “Marketing Myopia” article from 1960.

Many have argued before that this just is how innovation works in real life, and how it’s always worked, something I have talked about before. For Levinson, he found “to [his] consternation,” that “people quite fancy the tale of McLean’s dockside epiphany. The idea of a single moment of inspiration, of the apple landing on young Isaac Newton’s head, stirs the soul, even if it turns out to be apocryphal.”

Which seems true, and was how Tobi introduced it on the podcast. Although in fairness to him, when I listened back to his words, he did say Malcom McLean’s story “around” the invention of the shipping container.

McLean’s is a fascinating story and the book covers it well. Although, written by an economist, this book wasn’t quite as fun to read as I was hoping. Levinson clearly did amazing research for this book, but often that gets played out in what—for me at least—was painstaking detail. The book is also not about McLean, but about the shipping container. And so while McLean’s story is covered, it is mostly wrapped fairly early in the book and then you follow the life of the container for many years after.