The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (46 page)

6.
McLean Industries,
Annual Report
, 1957 and 1958.

7.
McLean Industries,
Annual Report
, 1958; Campbell interview.

8.
Author’s telephone interview with Earl Hall, October 2, 1992; author’s telephone interview with William Hubbard, July 1, 1993; author’s interview with Charles Cushing, New York, April 7, 1993.

9.
William L. Worden,
Cargoes: Matson’s First Century in the Pacific
(Honolulu, 1955), p. 120.

10.
Ibid., pp. 114–120; Fitzgerald, “A History of Containerization,” pp. 39–41.

11.
Matson’s caution was described in author’s telephone interview with Leslie A. Harlander, November 2, 2004. Observation about hiding pedigrees is from Cushing interview. On Weldon’s background, see statement of Matson president Stanley Powell, Jr., U.S. House of Representatives, Committee on Merchant Marine and Fisheries,
Cargo Container Dimensions
, November 1, 1967, pp. 48–49. Weldon comment appears in his “Cargo Containerization in the West Coast-Hawaiian Trade,”
Operations Research
6 (September-October 1958): 650.

12.
Weldon, “Cargo Containerization,” p. 652–655.

13.
Ibid., p. 661–663.

14.
Les Harlander, interview by Arthur Donovan and Andrew Gibson, June 19, 1997, COHP.

15.
Harlander interview, COHP; letter, Keith Tantlinger to George D. Saunders, December 3, 1992 (copy in possession of author). In the letter, Tantlinger states, “I caught Les Harlander prowling the vessel to apparently see what he could learn, and I asked him to leave the ship.” In a telephone interview with the author, November 2, 2004, Harlander recalled that he had visited the ship as a guest of Pan-Atlantic.

16.
Harlander interview, COHP; American Society of Mechanical Engineers,
The PACECO Container Crane
, brochure prepared for dedication of national historic mechanical engineering landmark, Alameda, California, May 5, 1983. Details of the antiswing device are in L. A. Harlander, “Engineering Development of a Container System for the West Coast-Hawaiian Trade,”
Transactions of the Society of Naval Architects and Marine Engineers
68 (1960): 1079.

17.
Harlander interview, COHP; Harlander, “Engineering Development,” p. 1053. The containers apparently were well made; in 1981, 23 years after they were built, 85 percent of the original production run of 600 containers were still in service. Harlander interview, COHP.

18.
Negotiations with PACECO are recounted in Harlander interview, COHP; the lashing system is described in Harlander, “Engineering Development,” p. 1084.

19.
Foster Weldon, “Operational Simulation of a Freighter Fleet,” in National Research Council,
Research Techniques in Marine Transportation
, Publication 720 (Washington, DC, 1959), pp. 21–27.

20.
Fitzgerald, “A History of Containerization,” p. 47; American Society of Mechanical Engineers,
The PACECO Container Crane.

21.
Leslie A. Harlander, “Further Developments of a Container System for the West Coast-Hawaiian Trade,”
Transactions of the Society of Naval Architects and Marine Engineers
69 (1961): 7–14; Fitzgerald, “A History of Containerization,” pp. 57–59; Worden,
Cargoes
, pp. 143–144.

22.
Benjamin Chinitz, for example, devoted only a couple of mentions to containerization, predicting in 1960 that “in the next few decades” few places would have piggyback (container on railcar) service and even fewer would have maritime service with containers; see
Freight and the Metropolis: The Impact of America’s Transport Revolution on the New York Region
(Cambridge, MA, 1960), pp. 83, 86, and 161. Jerome L. Goldman, “Designed to Cut Cargo-Handling Costs,”
Marine Engineering/Log
(1958), p. 43. McLean Industries,
Annual Reports
, 1957–60; Campbell interview; John Niven,
American President Lines and Its Forebears, 1848–1984
(Newark, DE, 1987), p. 211; Grace’s plans were described in U.S. Department of Commerce,
Annual Report of the Federal Maritime Board and Maritime Administration, 1958
, p. 4; Edward A. Morrow, “All-Container Ship Welcomed by Port on Her Debut,”
NYT
, January 13, 1960; John P. Callahan, “Container Vessel on First Run,”
NYT
, January 30, 1960; “Grace Initiates Seatainer Service,”
Marine Engineering/Log
(1960), p. 55; Harold B. Meyers, “The Maritime Industry’s Expensive New Box,”
Fortune
, November 1967. The ILA may have been behind Venezuelan dockers’ refusal to handle Grace’s containers; see George Panitz, “NY Dockers Map Annual Wage Drive,”
JOC
, December 20, 1961.

23.
PNYA,
Annual Report
, various years; “Puerto Rico Trailer Service,”
NYT
, April 22, 1960; “Bull Line Gets Container Ships,”
NYT
, May 5, 1961; “Transport News: Sea-Land Service,”
NYT
, December 17, 1959. Financial information for Pan-Atlantic and Sea-Land Service is from ICC,
Transport Statistics
, Part 5, Table 4, various years. For the parent company’s losses, see McLean Industries,
Annual Report
, 1960. Gerald Toomey then with Consolidated Freightways, a large truck line, recalled that Consolidated’s chairman predicted in 1962 that Sea-Land would not last two years; author’s interview, New York, May 5, 1993.

24.
Edward A. Morrow, “Seatrain Spurns Shipping Merger,”
NYT
, August 12, 1959. Campbell interview; McLean Industries,
Annual Report
, 1958.

25.
“Just recruiting” comment from author’s interview with Gerald P. Toomey, May 5, 1993. On use of intelligence and personality tests, see Arthur Donovan and Andrew Gibson interview with Scott Morrison, July 8, 1998, COHP. Comment on pitching pennies from Cushing interview, April 7, 1993.

26.
Author’s interview with Paul Richardson, Holmdel, NJ, January 14, 1992; author’s telephone interview with Kenneth Younger, December 16, 1991; author’s telephone interview with William Hubbard, July 1, 1993.

27.
Container tonnage from PNYA
Annual Reports.
Quotation is from author’s interview with naval architect Charles Cushing, who joined Sea-Land in 1960.

28.
Sea-Land Service, presentation to Sea-Land management meeting, Hotel Astor, New York, December 12–14, 1963, mimeo.

29.
Werner Baer, “Puerto Rico: An Evaluation of a Successful Development Program,”
Quarterly Journal of Economics
73, no. 4 (1959): 645–671; A. W. Maldonado,
Teodoro Moscoso and Puerto Rico’s Operation Bootstrap
(Gainesville, 1997).

30.
Author’s interview with Gerald Toomey, May 5, 1993; author’s interview with William B. Hubbard, July 1, 1993; Edward A. Morrow, “U.S. Antitrust Inquiry Begun into Proposed Sale of Bull Lines,”
NYT
, March 29, 1961.

31.
Sea-Land’s practice was to write off its ships over six years, an unusually short period for long-lived assets. Very high write-offs made the short-term profit picture look bleak, but it meant that Sea-Land could report very high profits a few years later, once the ships had been fully depreciated. This accounting, deliberately designed to depress short-term profitability, was not widely appreciated by analysts who examined the company’s financial reports. In the mid-1960s, the Internal Revenue Service forced Sea-Land to depreciate its ships over fifteen years instead of six, and its financial reporting became less obscure. Author’s telephone interview with Earl Hall, May 21, 1993, and McLean Industries
Annual Report
, 1965. Concerning the bid for Bull Line, see George Home, “Bull Steamship Company Sold to Manuel Kulukundis Interests,”
NYT
, April 22, 1961; Edward A. Morrow, “Decision Put Off in Bull Line Case,”
NYT
, August 4, 1961. The attempt to block the sale of the ships to Bull was one of the more embarrassing episodes of McLean’s career. He told a hastily called congressional hearing on the issue that the government program to sell old vessels to nonsubsidized ship lines was a “give-away program,” and was then forced to admit that Waterman had applied for ships under the same program; the Waterman application, he said, was “a mistake,” although one that he had not tried to correct. “M’Lean Attacks Ship Exchanges,”
NYT
, August 17, 1961.

32.
“Bull Line Stops Puerto Rico Runs,”
NYT
, June 25, 1962; “Sea-Land to Add to Trailer Runs,”
NYT
, June 26, 1962; author’s interview with Gerald Toomey, May 5, 1993; author’s interview with William B. Hubbard, July 1, 1993; author’s telephone interview with Amadeo Francis, April 28, 2005.

33.
Toomey interview; U.S. Census Bureau,
Statistical Abstract
, various issues.

34.
Sea-Land Service, “The Importance of Containerized Ocean Transportation Service to Puerto Rico,” mimeo, n.d. (1969).

35.
McLean Industries,
Annual Reports
, 1962 and 1965; Cushing interview; McLean Industries,
Annual Report
, 1962; Toomey interview.

36.
Employment figures from ICC,
Transport Statistics
, 1963, Part 5, Table 4. Author’s interview with Richard Healey, January 19, 1994; Toomey interview, Richardson interview, July 12, 1992; Hubbard interview.

37.
“It wasn’t unusual” from Healey interview; Campbell interview; Hubbard interview; Richardson interview, January 14, 1992; George Panitz, “Sea-Land Plans Alaska Service,”
JOC
, April 1, 1964.

38.
Hall interview; presentations to Sea-Land management meeting, Hotel Astor, New York, December 12–14, 1963; ICC,
Transport Statistics
, various issues.

1.
Chinitz,
Freight and the Metropolis
, pp. 21, 50. The number of piers is given in a letter from Edward F. Cavanagh, Jr., New York City commissioner of marine and aviation, to Board of Inquiry on Longshore Work Stoppage, January 14, 1952, in Jensen Papers, Collection 4067, Box 16. For a description of the New Jersey freight yards, see Carl W. Condit,
The Port of New York
, vol. 2,
The History of the Rail and Terminal System from the Grand Central Electrification to the Present
(Chicago, 1981), pp. 103–107. Attempts by New Jersey interests to eliminate the single rate led to the formation of the PNYA in 1921. See Jameson W. Doig,
Empire on the Hudson: Entrepreneurial Vision and Political Power at the Port of New York Authority
(New York, 2001).

2.
Estimates of truck share of total cargo are based on unpublished PNYA data cited in Chinitz,
Freight and the Metropolis
, p. 41. Average waiting time appears in PNYA, “Proposal for Development of the Municipally Owned Waterfront and Piers of New York City,” February 10, 1948, p. 64; NYT; May 17, 1952.

3.
Waterfront Commission of New York Harbor,
Annual Report for the Year Ended June 30, 1954
, p. 33, and
Annual Report for the Year Ended June 30, 1955
, p. 13. Interesting light on the union’s view of public loaders can be found in a July 28, 1952, letter from Waldman & Waldman, the ILA’s counsel, to ILA president Joseph P. Ryan recommending changes in the operation of Local 1757, in Vertical File, “International Longshoremen’s Association,” Tamiment Library, New York University. A formal list of “authorized” public loader charges appears in Truck Loading Authority, “Official Loading Charges in the Port of New York,” in Jensen Papers, Collection 4067, Box 13. As late as 1963, the trucking industry complained that truckers spent $ 1 million a year on bribes to gain precedence in waiting lines at piers. See New York City Council on Port Development and Promotion, minutes of November 18, 1963, Wagner Papers, Reel 40532, Frame 728.

4.
County Business Patterns
, 1951, p. 56.

5.
County Business Patterns
, 1951, pp. 2, 56; Chinitz,
Freight and the Metropolis
, pp. 31, 96. Detail on plant locations in selected industries in the early part of the century is in Robert Murray Haig,
Major Economic Factors in Metropolitan Growth and Arrangement
(New York, 1927; reprint, New York, 1974), esp. pp. 64–65 and 96–97. Haig’s maps make clear that other industries, notably apparel, were not at all reliant on waterfront access.

6.
County Business Patterns
, 1951. Brooklyn estimate from New York City marine and aviation commissioner Vincent A. G. O’Connor, Address to Brooklyn Rotary Club, October 17, 1956, Wagner Papers, Reel 40531, Frame 1585.

7.
PNYA,
Outlook for Waterborne Commerce through the Port of New York
, November 1948, Table VIII; Census Bureau,
Historical Statistics
, p. 761; Thomas Kessner,
Fiorello H. LaGuardia and the Making of Modern New York
(New York, 1989), p. 559.

8.
Chinitz,
Freight and the Metropolis
, pp. 77–78.

9.
Ibid., p. 202. For additional trucking charges, see PNYA, “Proposal for Development,” p. 65. Shippers filed eighty-nine “informal complaints” about bills for waiting time, wharf demurrage, and terminal charges during the year ending June 30, 1955, “the greater portion of which were against rates for truck loading and unloading waterborne freight in the Port of New York area.” U.S. Department of Commerce,
Annual Report of the Federal Maritime Board and Maritime Administration, 1955
, p. 33.

10.
Nelson,
Divided We Stand
, pp. 71–73; Vernon Jensen,
Strife on the Waterfront
(Ithaca, NY, 1974), pp. 105–110 and
chap. 6
; Philip Taft, “The Responses of the Bakers, Longshoremen and Teamsters to Public Exposure,”
Quarterly Journal of Economics
74, no. 3 (1960): 399. The executive director of the Waterfront Commission, Samuel M. Lane, charged in January 1955 that the New York Shipping Association, the organization of port employers, was “hopeless” when it came to cleaning up waterfront corruption. See Waterfront Commission Press Release 1040, January 27, 1955, in Jensen Papers, Collection 4067, Box 16.