The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (23 page)

The technical differences between these systems were important, especially for ship lines. Containerships were hugely capital-intensive, and the industry’s viability depended upon minimizing port time and maximizing the time that each vessel was under way, earning revenue. The ship lines thus had special concern about “gathering,” the tendency of the lugs of the lifting device to position themselves in the holes in the corner fittings. If a fitting was poor at gathering when a crane lowered its spreader to pick up a container, the crane operator often had to raise the spreader and lower it a second time. Matson chief engineer Les Harlander calculated that if gathering difficulties added just one second to the average time required to lift a container, his company would lose four thousand dollars per ship per year. After a full day of debate, the subcommittee voted on the Fruehauf design and split badly. There was no ringing endorsement of a national standard.
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More meetings through 1962 failed to break the deadlock. Finally, Fred Muller, an engineer serving as the MH-5 committee’s secretary, offered a thought: since the Sea-Land corner fitting was working smoothly with the world’s largest fleet of containers, perhaps the company would be willing to release its patent rights. Tantlinger made an appointment with Malcom McLean. McLean had no reason to be fond of the American Standards Association, which only recently had excluded Sea-Land’s 35-foot containers from its list of standard sizes. Nonetheless, he understood that common technology would stimulate the growth of containerization. On January 29, 1963, Sea-Land released its patents, so that the MH-5 committee could use them as the basis for a standard corner fitting and twist lock.
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Agreement on a single design proved elusive. Various trailer manufacturers were still pushing their own products. Numerous ship lines and railroads had started to buy containers, albeit in small numbers, and they employed a wide variety of lifting systems. Lack of consensus meant that the U.S. delegates did not have an official design to offer when the ISO container committee met in Germany in October 1964. The Americans promoted the Sea-Land fitting as the basis for a potential international standard, with Tantlinger distributing half-size ceramic models to show other delegates what it looked like, but no design was put to a vote.
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Back home, the engineers’ debate over the stresses and tolerances of corner fittings flared into a bitter commercial dispute. The National Castings corner fitting, an elongated box with two rectangular holes in the long side and a large square opening on the top, had been adopted by more container owners than had any other. One big company, Grace Line, had modern container cranes that operated on the National Castings system. Smaller lines that carried containers along with mixed freight in their breakbulk ships liked the National Castings fitting because the large openings let them use old-fashioned hooks for lifting and lowering. Changing to a different system would be expensive; Grace Line estimated the cost of replacing the corner fittings on its containers and the lifting frames on its cranes to be $750,000. National Castings sought wider support by agreeing to royalty-free use of its designs, although only for containers to be carried on American ships. The company persuaded the Maritime Administration that it should support the National Castings fitting as the international standard rather than a fitting based on the Sea-Land design.
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Four of the leading steamship lines, Sea-Land, Matson, Alaska Steamship, and American President Lines, fought back, because adoption of the National Castings fitting would have required them to change all of their containers. Instead, they proposed a minor change to the fitting that the MH-5 committee was designing based on the Sea-Land patent. If the hole on the top of the fitting were moved by half an inch, they estimated, 10,000 containers—about 80 percent of all large containers used by U.S. railroads and ship lines other than Sea-Land—would be “reasonably compatible” with Sea-Land’s. The fitting they recommended, they said, would cost less than half as much as the National Castings fitting ($42.24 versus $97.90) and weigh barely half as much (124 pounds versus 236). As the battle grew intense, the politics of standardization suddenly changed. National Castings Company was sold and abandoned efforts to promote its corner fitting. Marad, which had favored National Castings, reversed course and urged ship lines to accept whatever MH-5 agreed upon. Finally, an unusual decision came from the top. The American Standards Association’s Standards Review Board ignored the fact that the specialists on its MH-5 committee were still debating the finer details of corner fittings. On September 16, 1965, it approved a modified version of the Sea-Land fitting as the U.S. standard, just in time for the next meeting of the ISO container committee in The Hague.
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The sixty-one ISO delegates were offered two competing designs when they convened in the Dutch seat of government on September 19. The United States presented the modified Sea-Land corner fitting as the new U.S. standard, and the National Castings fitting was put forth as the British standard. The British quickly agreed that the American favorite was superior. Only one roadblock remained. ISO rules required that the documents supporting proposed standards had to be distributed four months in advance of a meeting. The MH-5 committee had made its recommendation only a few days earlier, and no technical documents were ready. The ISO committee voted unanimously to waive the four-month rule. Three high-ranking corporate executives—Tantlinger, Harlander, and Eugene Hinden of Strick Trailers—then retreated to a railcar factory in nearby Utrecht, where they worked with Dutch draftsmen for forty-eight hours nonstop to produce the requisite drawings. On September 24, 1965, the ISO delegates approved the American design as the international standard for corner fittings.
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The new era of freight transportation finally seemed to have arrived. In principle, land and sea carriers would soon be able to handle one another’s containers. Container leasing companies could expand their fleets in the knowledge that many carriers would be prepared to lease their equipment, and shippers could make use of containers without wedding themselves to a single ship line. “Projects awaiting the outcome of the fitting question are already underway,” a trade publication trumpeted within a few months of the vote in The Hague. “Container-handling hardware can now be designed with more certainty, and an increasing number of products designed to load and carry containers will be marketed.”
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The cart, however, had gotten ahead ofthe horse: the ISO container committee had agreed on what the corner fitting should look like without defining all of the loads and stresses it should be able to withstand. Starting in the autumn of 1965, dozens of ship lines and leasing companies began ordering containers with fittings based on the design that had worked for Sea-Land’s operations but had never been tested under other conditions. The ISO committee had yet to set maximum container weights, for example. No one could say how thick the steel in the fitting should be, because it was not clear how much weight it might have to hold. Sea-Land’s cranes lifted by connecting to the tops of the fittings in the top corners of a container; it was uncertain how the fittings would perform if a container were lifted from the fittings in the bottom corners. Railroads in Europe had different coupling systems from those in the United States, meaning that the cars in a train banged against one another with greater force, and the Sea-Land fittings and locks had never been subjected to such conditions. And what if five or six containers were stacked on the deck of a ship? In high seas, the stack of containers might tilt as much as 30 or 40 degrees away from vertical. Would the newly approved corner fittings and the twist locks connecting the containers survive such stresses?

Through 1966, engineers around the world tested the new fittings and found a variety of shortcomings. As an extra check, a container was put through emergency tests in Detroit, just ahead of another meeting of the ISO committee. It failed, the fittings on the bottom of the test container giving way under heavy loads. When TC104 convened in London in January 1967, it was faced with the uncomfortable fact that the corner fittings it had approved in 1965 were deficient. Nine engineers were named to an ad hoc panel and told to solve the problems quickly. They agreed on the tests that fittings would have to pass, and then two engineers, one British, one American, were sent to a hotel room with their slide rules and told to redesign the fitting so that it could pass the tests. Requiring thicker steel in the walls of each fitting, they calculated, would solve most of the problems. No existing container complied with their “ad hoc” design. Over the bitter complaints of many ship lines that had encountered no problems with their own containers, ISO approved the “ad hoc” design at a meeting in Moscow in June 1967. The thousands of boxes that had been built since ISO first approved corner fittings in 1965 had to have new fittings welded into place, at a cost that reached into the millions of dollars.
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The process of standardization was proceeding nicely. The economic benefit of standardization, however, was still not clear. Containers of 10, 20, 30, and 40 feet had become American and international standards, but the neat arithmetic relationship among the “standard” sizes did not translate into demand from shippers or ship lines. Not a single ship line was using 30-foot containers. Only a handful of 10-foot containers had been purchased, and the main carrier using them soon concluded that it would not buy more. As for 20-foot containers, land carriers hated them. Ship lines “have designed, especially in their 20-foot equipment, a highly efficient port to port container without due consideration of how the box would move efficiently from port to customers,” an executive of the New York Central Railroad complained. So far as truck lines were concerned, the bigger the container, the more freight could be transported per hour of driver labor. Trucking companies’ preference was revealed by the truck trailers they chose to buy, almost none of which had 20-foot bodies. Hall’s notion of coupling two 20- foot containers together on a single trailer proved to be impractical, because if each container was filled to its weight limit, the combined weight would violate highway regulations in every state. Towing two 20-foot containers in tandem was impractical as well, because the same truck could move more weight by pulling two 24-footers or, in many states, two 27-footers.
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The most powerful evidence against the international standards came from the marketplace. Despite the U.S. government’s pressure on carriers to use “standard” sizes, nonstandard containers continued to dominate. Sea-Land’s 35-foot containers and Matson’s 24-footers, all a nonstandard 8 feet 6 inches high, accounted for two-thirds of all containers owned by U.S. ship lines in 1965. Only 16 percent of the containers in service complied with the standards for length, and a good number of those were not of standard 8-foot height. Standard containers clearly were not taking the industry by storm. The large ones were too hard to fill—too few companies shipped enough freight between two locations to require an entire 40-foot container—and small ones required too much handling. As Matson executive vice president Norman Scott explained, “In the economics of transportation, there is no magic in mathematical symmetry.”
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Their business success notwithstanding, Sea-Land and Matson had reason to worry about the drive for standard-size containers. Both companies had raised tens of millions of dollars of private capital to buy equipment and convert their ships to carry containers, and so far neither had sought federal construction subsidies. That situation was now changing. By 1965, both Sea-Land and Matson were preparing to expand internationally, and they might want subsidies to build new ships. In addition, Marad dispensed other types of aid. It gave operating subsidies to U.S. ship lines sailing international routes, to compensate for the requirement that they employ only high-wage American seamen, and it enforced regulations giving U.S.-flag vessels “preference” to carry government cargo overseas. If Marad were to limit those subsidies only to companies adhering to the “voluntary” MH-5 standards, Sea-Land and Matson would be at a serious competitive disadvantage. Executives from the two companies met in Washington and decided to join forces to fight the U.S. government.
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They started back at the American Standards Association. The association’s MH-5 committee had been quiescent, but in the fall of 1965, with the ISO beginning to adopt international standards for containers, the MH-5 committee named a new subcommittee to look at “demountable containers”—the sort that could be moved among ships, trains, and trucks. The chairman was Matson chief engineer Harlander, and now, in contrast to 1961, Sea-Land officials were prominent participants. At the first meeting, at the Flying Carpet Motel in Pittsburgh, Harlander surrendered the chair and made an appeal for Matson’s 24-foot container size to be accepted as standard. He was followed by Sea-Land’s chief engineer, Ron Katims, who called for the subcommittee to recognize 35-foot containers as well. Sea-Land’s containers, the subcommittee was told, tended to hit weight limits long before they were filled to physical capacity, so 40-foot containers would not in practice hold more freight than 35- footers. With the longer size, however, Sea-Land would not be able to fit as many containers on each ship, forfeiting almost 1,800 tons of freight capacity per vessel. Harlander then called for the subcommittee to endorse 8½-foot-high containers as well. Marad’s representative asked that all three questions be tabled.
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When discussions resumed in early 1966, the subcommittee agreed to increase the “standard” height for containers to 8½ feet, but it split on whether to recommend a change in policy to make 24-foot and 35-foot containers “standard.” It bounced the entire issue up to the full MH-5 committee. The MH-5 committee itself then split. The dogged Hall, still pushing the standardization process along despite failing health, remained convinced that all approved sizes should be mathematically related. The various maritime associations on the committee, most of whose members had by then adopted 20-foot or 40-foot containers, had little incentive to cast a vote that might force them to share government subsidies with Sea-Land and Matson. Five trucking associations, whose members picked up and delivered containers for Sea-Land and Matson, submitted votes by telegraph in favor of the two additional sizes, but their votes were disallowed. Almost all of the government representatives in attendance abstained. With 15 no votes, 5 yes votes, and 54 voters abstaining or absent, the MH-5 committee had no consensus for anything. A revote the following year found the split persisting, with 24 participating organizations favoring 24-foot containers and 28 against them.
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