Heroes of Capitalism: The Humble Shipping Container

Many people hardly appreciate on the role played by the advances in technology in shaping social progress. Think the discovery of fire which initially allowed humans to cook, obtain warmth and protection. Fire eventually became important part of production. 

Other milestone innovative technologies such as the Gutenberg printing press, the steam engine and today’s internet has dramatically transformed people’s lifestyle.

For the majority, technology advances “just happens”, they hardly have an inkling of how these things take place.

There is one significantly underappreciated hero of global trade: the shipping container

The Economist explains: (hat tip Prof Mark Perry)

THE humble shipping container is a powerful antidote to economic pessimism and fears of slowing innovation. Although only a simple metal box, it has transformed global trade. In fact, new research suggests that the container has been more of a driver of globalisation than all trade agreements in the past 50 years taken together.

Containerisation is a testament to the power of process innovation. In the 1950s the world’s ports still did business much as they had for centuries. When ships moored, hordes of longshoremen unloaded “break bulk” cargo crammed into the hold. They then squeezed outbound cargo in as efficiently as possible in a game of maritime Tetris. The process was expensive and slow; most ships spent much more time tied up than plying the seas. And theft was rampant: a dock worker was said to earn “$20 a day and all the Scotch you could carry home.”

Containerisation changed everything. It was the brainchild of Malcom McLean, an American trucking magnate. He reckoned that big savings could be had by packing goods in uniform containers that could easily be moved between lorry and ship. When he tallied the costs from the inaugural journey of his first prototype container ship in 1956, he found that they came in at just $0.16 per tonne to load—compared with $5.83 per tonne for loose cargo on a standard ship. Containerisation quickly conquered the world: between 1966 and 1983 the share of countries with container ports rose from about 1% to nearly 90%, coinciding with a take-off in global trade (see chart).

The container’s transformative power seems obvious, but it is “impossible to quantify”, in the words of Marc Levinson, author of a history of “the box” (and a former journalist at The Economist). Indeed, containerisation could merely have been a response to tumbling tariffs. It coincided with radical reductions in global trade barriers, the result of European integration and the work of the General Agreement on Tariffs and Trade (GATT), the predecessor of the World Trade Organisation (WTO).

Read the rest here.

It is unfortunate that media and politics has successfully implanted on the public of the false importance of the short term or temporary visible gains of specific personalities or groups, such that "heroes" are characterized by victors of zero-sum activities, particularly in sports, the celebrity gossip culture and in politics.

Yet the real heroes are those inventions or ideas that ingloriously radicalized improvements on the way we live over the long run.