Reconsidering The Box

Thanks to COVID everyone is talking ‘supply chains’ yet few can cite the decisive miles-stones of such a distributed, globalised economy: wheat grown in Ukraine can be milled in California to be baked into naan in Delhi. How was it possible for such a supply chain to exist, with price of shipping seemingly unmoored from the immense distances. The important development is stunningly routine: the shipping container.

In 2006, Marc Levinson published the first edition of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, an oddly compelling account of the development of containerisation, a process that began in the 1950s and has continued refinement to today. Today, we are reaching the limits of innovation in this space: it would be difficult to imagine shipping being made more efficient and it is not possible to have shipping costs to the consumer of less than zero.

Our reality in which our economy relies on such massive supply chains bucks intuition. We are rooted in the slowness of our corporeal form. A long car trip has a pace strangely at odds with the rest of our life. Even though we are travelling as physically fast as we ever do on the land it feels slow and we quickly grow bored. When we catch a plane and the Earth rotates below - we arrive disorientated by the velocity of it all. This reminds us that humans have evolved to be bounded by geography - how strange that we have built a system that appears to have transcended it. How is free shipping possible? How can it arrive only a few days after we click “submit order”? What is this vast and technologically apparatus behind it?

The largest leap of this journey preceded the digital economy by nearly half a century, the shipping container transformed the world from a place where locality mattered. Before containerisation, industry was built as close to the docks and ports as possible. After it, the total distance travelled by the ingredients of regular supermarket products often circle the earth multiple times.

We are used to innovation incurring disruption and disruption creating winners and losers but in the 1950s, the attitude was far less ambivalent. It was all progress, improvement without caveat. The shipping container enabled globalisation at least as much as the telephone line and the ensuing fallout of its development was dramatic, yet it began limited to certain communities and so could be safely ignored.

Those communities were the multigenerational stevedores and longshoreman, the ancestors of those described in season 2 of The Wire. Before containerisation, goods were shipped packed loosely in ship’s hulls either manually or, at best, in barrels and on pallets. Levinson comments that it was easy to romanticise this work but it was hard, it was irregular and it was dangerous. There were benefits though. Theft was rife and a longshoreman was his own man in a way few other labourers at the time were. They were essentially contractors and if they wanted to go fishing on weekday they could without fear of an angry boss. From difficult conditions and an adversarial relationship between employer and employee, came solidarity from which a powerful unions grew.

When the container arrived and promised immense gains in efficiency and the ability to breaking open markets previously protected by geography, unions and waterfront communities were taken by surprise. Nobody could predict the scale of the change and so unions were not sure exactly what was on the table when they were bargaining. As the reality of what containerisation meant for jobs became clear - the available jobs falling to a fraction of what they had been, their power ebbed away from quickly and permanently.

In his second edition Levinson has included a new chapter on just-in-time manufacturing - in which thanks to the massive efficiency gains enabled by containerisation, manufacturers that had once had to produce each component to build a product can now contract out building components to different companies around the world. Before the container, the inefficiencies of shipping had functioned as an ersatz trade barrier, so that it was not possible to simply send jobs offshore to save money.

Levinson’s The Box was ahead of its time, preceding by a decade the political fallout by those communities and individuals that had felt spurned by globalisation. The election of Trump and reckoning that would come afterwards - that disruption and globalisation had victims and they were mad as hell. Back in 2006, before the GFC, it was full steam ahead for globalisation and it would be easy to write off as sentimental his mournful coverage of waterfront communities. Yet to linger on their devastation was prescient, the political price was yet to be settled.

Containerisation is a story of automation and so there is much to learn about the social flow-on effects that we can expect thanks to the digital revolution at hand. Communities will be devastated, the profits to shareholders will be immense, the savings to the consumer will quickly be taken for granted.

The Box talks about the establishment of international standards for the shipping container - a subject as difficult as any to stir interest at a dinner party. Yet the implications were profound: it allowed the proliferation of containerisation throughout the world. The boom was now on. Ships that could carry containers got larger as did the ports. Trainlines and trucking infrastructure could now be built around the standard container sizes. Competition for business was fierce and many companies over-invested and went bankrupt. Ships went to the ports with the best facilities, the best rates and the fastest turnaround times. Many ports became redundant while those survived grew huge.

Yet today the rush to efficiency without limit has become qualified: we see the price of tuning a supply chain too delicately. Maximum efficiency means minimal redundancy - which makes the entire system vulnerability to catastrophe. In COVID supply chains faltered when the few ports shut down. There was not enough crew available to man the massive ships tasked with carrying the world’s goods. Even here Levinson has a former case that preceded: fluctuating oil prices during the oil crisis of the 1970s meant it was not clear how to design ships, massive investments. Do you tune them for speed (uses much more oil) or efficiency (could be slower than your competitors)? When oil prices spiked those who had opted for speed had ships that were far too expensive to run. Calibrating for one variable comes at the cost of versatility - so when a crisis arrives and upsets your equation the system you have built is no longer viable.

The Box teaches us that if you know where to look you can identify precedents for the current moment. What is thrilling is how mundane the subject matter yet how far reaching were its consequences. I hope Levinson’s second book Out of the Box will carry on and we can see through shipping a view through the porthole into the future.