The Trucker Who Changed Shipping: The Power of the Shipping Container Pt. 2

Shipping container being lifted off truck

70 years ago you were 3x more likely to get injured working on the dock than on a construction site.

The dock was a high-friction and labor intensive environment.

All of that changed with an idea, and good execution…

Ports were a point of high-friction, this was no surprise. In a trip from the US to Europe half the transit time was the ships being loaded & unloaded.

No one had committed to fully addressing these inefficiencies.. There were some attempts, like large wooden boxes, but these ended up taking more space on the ship when it was loaded with other loose cargo.

Someone needed to go whole-hog.

That someone was a trucker named Malcom McClean.

Malcom, with the spirit of Sam Zemurray and Sam Walton, knew his business from A to Z and deplored inefficiencies. To grow his fleet of trucks he took on a ton of debt. Of course this can be a problem once the money stops coming in. A savvy operator, he looked for ways to keep costs down so he could keep paying back his loans.

Here is a good example: Senior drivers who trained new drivers were offered 1 months pay-bonus if their trainee doesn’t get into an accident in the first year.

This incentivized the trainer to be thorough and encourage safety.

Show me the incentive and I will show you the outcome.

Charlie Munger

In the 50’s Malcom was thinking about how he could bypass the congested highways from North Carolina to NY. His initial idea was for trucks to drive onto the ship, drop the trailer, then drive off, but this didn’t allow them to stack – and the wheels on the trailer take up a lot of space.

The next idea was for the shipping container we know today: have the truck pull-up along side the ship, a crane picks up the trailer body, and drops them onto the body of the ship.

Malcom went all-in on this idea.

In a bold move, Malcom sold his trucking company, purchased a shipping company, and set sail with the first container-filled ship from New Jersey to Houston in 1956.

This innovative method reduced shipment costs by 75%.

Everything was about to change, but more on that next week.

Gentlemen’s agreement 🤝🏻:

Let’s make a pact – a gentlemen’s agreement if you will. If you’ve found something useful in this post, do me the kindness of sharing it with a friend who you think would appreciate these insights. While I’ll never know if you actually do it or not, think of it as a token of gratitude for keeping this site ad-free and full of delightful wisdom. Deal?

Subscribe 👇🏻📧

Join 2,004 other subscribers

Drop your email in the box above to receive an update when I post my weekly blog.

Leave a Reply