The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (15 page)

The frenzy of activity on the New Jersey side of the harbor caused alarm in New York City. In the past, the New Jersey docks had been notable for their lack of activity; the modest traffic through Port Newark, mainly lumber, accounted for only a couple of percent of the port’s nonoil cargo through the 1940s. As ship operators relocated from New York, however, its share would surely grow. With the amount of general cargo flat, every ton handled in New Jersey meant one ton less handled in New York, draining jobs from the city.
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This simple calculus was a problem for New York politicians. Robert F. Wagner, familiar with the docks from years as Manhattan borough president, had been elected mayor in 1953 after assembling an unusually broad coalition of labor unions and ethnic groups. The one major bloc he failed to capture was the Italians, who voted over whelmingly for incumbent mayor Vincent Impellitteri. Gaining sup port from the group that supplied most of New York’s dockworkers may have been part of Wagner’s motivation in boosting Department of Marine and Aviation outlays to $13.2 million, more than double the previous level, in his first capital budget, announced in late 1954. Verbal weapons were soon unsheathed. In the summer of 1955, city marine and aviation commissioner Vincent O’Connor charged the Port Authority with trying to “sabotage” city efforts, in the face of “a growing City determination to meet the challenge of its waterfront without yielding its precious waterfront properties to Port Authority control.” O’Connor, a lawyer, was close to the ILA, and he shared its concern about the loss of jobs. That September, Mayor Wagner made pier reconstruction one of his top four capital-spending priori ties, along with education, transit, and pollution control.
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Concern about the docks reached to Albany as well. New York governor Averell Harriman was sensitive to city objections that the Port Authority was promoting New Jersey at New York’s expense, but he also knew that the city lacked the money to rebuild its piers. A week after the plans for Port Elizabeth were announced, Jonathan Bingham, a top Harriman aide (and former campaign speechwriter for Wagner) called Matthias Lukens, Tobin’s deputy, and Howard Cullman, the agency’s chairman, to report that the governor was “disturbed” about Norton Lilly’s move from Brooklyn to New Jersey. “He also expressed the opinion he was not sure that we should be spending such money to take business away from New York City,” Lukens reported in a confidential memo for his files. Ac cording to Cullman, “[Bingham] said he understood completely that the New York piers were in shocking condition, but he did not think the Governor should come out publicly and say the Port of New York Authority should run them.”
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The container was not yet reality in 1955, and given Malcom McLean’s status as a shipping-industry outsider, his plans had so far drawn little attention. With Mayor Wagner committed to keeping shipping in New York, O’Connor came forth with a six-year plan to build new piers and transit sheds, and the city began to pump large amounts of money into the docks. The 1956 capital budget included $14.8 million for waterfront construction as the initial installment on a port program that was estimated to cost $130 million. The plans were state-of-the-art for the mid-1950s, with piers parallel to the shoreline, separate terminal levels for passengers and freight, and paved patios that allowed trucks to back up to high loading docks on the land side of the transit sheds. There would be five new warehouses to handle rail freight lightered across the harbor and a big new terminal for Cunard’s transatlantic passenger liners. The crown jewel, clearly intended as a slap in the Port Authority’s face, was a $17 million pier with a cargo and passenger terminal for Holland-America line. After sixty-six years in New Jersey, that company would buck the trend that the Port Authority had unleashed and would move to Manhattan.
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After decades of inflation, the raw numbers are inadequate to con vey the scope of the city’s plans. Mayor Wagner’s proposed six-year port reconstruction scheme was to cost $130 million in 1956 dollars—the equivalent of $800 million in 2004 dollars. Across the country, the growing Port of Los Angeles had spent $25 million on construction over the ten-year period from 1945 to 1954; Wagner proposed to spend two-thirds of that amount on the Holland-America terminal alone.

None of these proposals, of course, could do much about the underlying problems of the city’s docks. Costs were simply uncompetitive with those at other ports. The fundamental geographic disadvantages remained. The new lighter terminals might make it easier to handle rail freight destined for New York, but rail freight in tended for an outbound ship would still have to be lightered across the harbor, off-loaded onto a pier, and then reloaded onto an ocean going vessel. Trucks headed for the docks would still have to fight traffic in the Holland and Lincoln tunnels and along the waterfront. And, of course, rebuilt wharves would do nothing about the port’s labor problems, problems so severe that the reopening of one of the first piers rebuilt by the city was delayed by a dispute over which ILA members would receive priority in hiring. O’Connor told ILA leaders directly in the summer of 1955 that the union’s practices were “a stumbling block for the city in its efforts to rent good piers in certain areas.”
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Wagner’s own City Planning Commission was skeptical of O’Connor’s port projects and recommended that the city restart negotiations to transfer its docks to the Port Authority; it “felt the Port Authority could assure greater development and utilization of the port with benefits to the City’s economy.” The mayor was unresponsive. Large-scale building was a hallmark of Wagner’s tenure, and he had no intention of ceding waterfront reconstruction to an agency over which he had no control. Wagner was close to organized labor, and the city’s labor leaders rightly feared that a Port Authority takeover would mean abandonment of some of the docks. Wagner’s lack of an ethnic base in New York politics—“There weren’t too many German-Americans who voted in New York,” re called Thomas Russell Jones, an influential black politician of the era—made it essential for him to seek support in black, Irish, and Italian neighborhoods reliant on waterfront jobs. In this he succeeded: in his first reelection campaign, in 1957, Wagner captured about half the Italian vote, a big improvement over 1953. Business backed the port renovation effort as well. The Downtown-Lower Manhattan Association, a new civic group started by David Rockefeller of Chase National Bank, urged that all piers in lower Manhattan, save four on the East River, be retained for commercial ship ping. “We support the present program of the Department of Marine and Aviation to continue to seek suitable piers in this area and for their modernization and rental on a self-sustaining basis,” the association said in its initial plan, released in 1958.
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Port spending took on unprecedented proportions. In September 1957, Mitsui Steamship Company agreed to move to a new $10.6 million city-owned terminal in Brooklyn, and Holland-America signed a twenty-year lease for the new terminal in Manhattan. By 1957, O’Connor was envisioning $200 million of waterfront investment by 1962—the equivalent of $1.4 billion in 2004 dollars. Talk of selling the piers to the Port Authority subsided. For their part, Tobin and King were now convinced that the container was the future, and the Port Authority lost interest in taking over city piers that would never have the acreage or transport connections for containers. Although the Port Authority was proceeding with plans to turn twenty-seven outmoded piers in Brooklyn into twelve modern ones, the agency understood that it was in a race to recover its in vestment before container shipping made the reconstructed piers obsolete. “We already knew that we were building something [in Brooklyn] that would pay itself back, but it wasn’t the future,” re called Guy F. Tozzoli, then the Port Authority’s head of port planning. The agency’s greater concern was that the city was unleashing a subsidy war that could depress pier rents. Tobin attacked the “utter inadequacy” of the city’s lease with Holland-America, contending that it involved a city subsidy of $458,000 a year, creating a “new policy of undercutting established pier rental levels by subsidizing private shippers.” O’Connor fired back that the “port octopus” was exerting “all its propaganda efforts to thwart the City in the desire of New York to keep its waterfront under the control of its citizens rather than yield it to a bi-state group which thrives on its lack of direct responsibility to the public.”
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The City Planning Commission, meanwhile, was promoting the view that the port might not be the city’s economic future after all. It wanted new office and residential buildings along the East River in lower Manhattan, and suggested in 1959 that rebuilding derelict piers for shipping was not the best use of precious waterfront land. O’Connor responded by enlisting the support of Robert Moses, the city’s powerful parks commissioner and a member of the Planning Commission, and then by attacking the Planning Commission itself. Wrote O’Connor: “The assertion, elaborately made by the Commission, that the potential of the Port of New York must be judged by its recent past, rather than by an affirmative anticipation of its future, is an example of negative, rather than constructive planning. It would appear to be inconsistent with the dynamism of New York.”
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Left unsaid was that much of the city’s investment was already going to waste. In 1955, when O’Connor first proposed building five new terminals to handle cross-harbor lighter traffic, lighters moved 9.5 million short tons of cargo between New Jersey and the New York City docks. By 1960, after the city had spent $10 million on new lighter terminals, one-third of that traffic had vanished, and the trend was inexorably downward. The rebuilt Pier 57 on the Hudson River, custom-designed for Grace Line’s combined passenger and freight service, was modern enough, but the rapid expansion of air travel had made it obsolete almost before it opened. New piers alone clearly would not be enough to preserve the pattern of port commerce in New York City. The container, hardly noticed by New York officials, was about to become the final nail in the coffin.
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Within six months of its start, Pan-Atlantic’s container service was carrying 120 containers a week between Newark and Houston. The Pan-Atlantic terminal in Newark had become a busy transshipment hub where longshoremen consolidated smaller shipments into full containers. In early 1957, after barely nine months of operation, Pan-Atlantic leased six additional acres in Newark, twelve times its original space, to store containers and chassis. After a government-sponsored study found that container shipping cost 39 percent to 74 percent less per ton than conventional shipping, the Propeller Club, the association of top shipping company executives, devoted a full day of its 1958 convention to containers. No one could doubt that conventional shipping would soon be in trouble.
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As container traffic surged, so did Port Newark’s fortunes. New ark’s cargo tonnage doubled between 1956 and 1960 while tonnage on the New York side declined slightly, taking New Jersey’s share of total port traffic from 9 percent to 18 percent in just four years. Pan-Atlantic, renamed Sea-Land Service in 1960, accounted for more than one-third of Newark’s general cargo and 6 percent of all general cargo in the Port of New York. All of this was achieved in the once moribund domestic trade, which had now shifted almost entirely out of Manhattan.
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A stone’s throw to the south of Sea-Land’s Newark terminal, dredges and bulldozers were beginning to shape Port Elizabeth. After two years of planning and after overcoming protests from wary local officials, the Port Authority had embarked in 1958 on a massive construction project: a 9,000-foot channel, 800 feet wide and 35 feet deep, directly opposite Port Newark; thousands of feet of wharf frontage; rail lines; and roadways up to 100 feet wide. Port Authority planners projected that Elizabeth would handle 2.5 million tons of container traffic each year, four times the level then being handled in Port Newark. The differences from New York’s dock reconstruction were plain. In a 1961 speech discussing New York City’s port redevelopment, marine and aviation commissioner O’Connor did not utter the word “container,” and the piers he was building were meant to serve vessels carrying mixed freight, passengers, and baggage. Port Elizabeth, by contrast, was designed from the start as a port for containers. Fortuitously, building on marshland required the Port Authority to start by dredging a channel, filling the wharf area with dredged spoil, and then allowing the fill to settle. Wharves and roadways did not get under construction until 1961, by which time Malcom McLean’s container concepts were even further developed. As eventually built, Port Elizabeth’s first berths each had about eighteen acres of paved area alongside, to cut down on the cost of moving containers from storage to ship. The design, the Port Authority’s magazine explained, “permits a continuous flow of trailers to shipside in ‘assembly line’ fashion.”
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The new Sea-Land terminal at Port Elizabeth, opened in 1962, operated on a scale that was inconceivable in New York City. McLean won government permission to sail from Newark to the West Coast through the Panama Canal, and Sea-Land’s traffic soared: the Port of New York handled more domestic general cargo in 1962 than in any year since 1941. Almost all of this cargo moved across the Sea-Land pier in New Jersey. Almost none of it moved through New York City. The leisurely port calls of the early 1950s were becoming a memory. A mixed load of containers and breakbulk freight—the kind of load New York City’s new piers were built to handle—was an economic drain, because the cost of extra port time to handle noncontainerized cargo ate up the savings from containerization. With no room to store thousands of containers and chassis and no way to handle the hundreds of trucks and railcars coming to meet every ship, New York City’s docks were in no position to compete.

For the port as a whole, containerization still remained a sideshow in 1962. Containers accounted for only 8 percent of the Port of New York’s general cargo, entirely in domestic trades. None of the port’s international traffic, which remained in Manhattan and Brooklyn, was in containers. Yet the trend was ominous. As Sea-Land expanded in the Caribbean, the island traffic that had once flowed through Bull Line’s pier in Brooklyn moved to Sea-Land’s complex in Elizabeth. New Jersey’s share of the port’s general cargo reached 12 percent in 1964.