Innovation & Wealth › Mass production & the consumer age › Postwar boom and the rise of the middle class
Container shipping (Malcom McLean)
April 26, 1956· Innovation· Innovations & industries
Well documentedSolid records, texts or physical evidence.
Standard steel boxes moved by crane between ships, trains and trucks, which made shipping goods across oceans very cheap.
See it on the Innovation & Wealth map →What happened
Trucking magnate Malcom McLean thought it wasteful for dockworkers to unload trucks crate by crate onto ships. On April 26, 1956, his converted tanker Ideal X carried 58 metal trailer boxes from Newark to Houston. Loading cost fell from about $5.83 a ton to 16 cents. Dockside cranes, standard 20- and 40-foot boxes (1960s) and ever-larger ships followed. McLean sold his firm, Sea-Land, to R.J. Reynolds in 1969 for about $530 million.
Impact on society and the economy
Shipping costs collapsed, making global factory supply chains possible. Consumers got cheaper goods and Asian ports boomed; longshoremen and old waterfronts like Manhattan's and London's lost most of their work.
How we know
Shipping and port records, dockworker union contracts, and Marc Levinson's history The Box (2006), which documents the Ideal X voyage and the cost figures.
Still debated
How much containers alone, versus tariff cuts, drove trade growth is debated; a study by Bernhofen, El-Sahli and Kneller found containers mattered more than trade agreements.
Connections (2)
▸Container shipping (Malcom McLean) slashed the shipping costs behind Globalization and offshoringMostly agreed
The connection
Containers cut dock handling costs by over 90%, curbed theft and breakage, and cut ships' time in port from days to hours. Shipping became cheap enough for firms to split production across continents: design in California, parts from Korea and Taiwan, assembly in China, sales everywhere. That supply-chain world is much of what globalization means.
When and how
Spread from US coastal routes in the 1960s to transpacific and Asia–Europe trade in the 1970s; giant hubs like Singapore, Hong Kong and later Shanghai followed.
How sure are we?
Port throughput statistics, freight-rate data, Levinson's The Box, and trade economists' estimates of containerization's effect on trade volumes.
Debates
How much containers, versus tariff cuts, cheaper telecoms and China's opening, drove globalization is debated; most economists see these forces working together.
▸Container shipping (Malcom McLean) helped make possible The China shockMostly agreed
The connection
China's export boom after 2001 rode on cheap, reliable container shipping: moving a 40-foot box from Shanghai to Los Angeles cost a few thousand dollars, a tiny share of its cargo's value. Without that, low-margin goods like furniture, toys and electronics could not have crossed the Pacific at such scale.
When and how
Chinese ports such as Shanghai, Shenzhen and Ningbo became the world's busiest after China joined the WTO in December 2001; imports poured into Los Angeles and Long Beach.
How sure are we?
Port rankings and US import data show the surge; economists such as David Autor tie the job losses to Chinese imports, with containers as the carrier.
Debates
Containers were a precondition, not the trigger: China's reforms, WTO entry and permanent US normal trade relations (2000) set the timing. How to weigh these is debated.