The Humble Shipping Container and Ending Third World Poverty

We’ve blogged from time to time on the wonderful revolution in logistics the simple metal box known as a shipping container. And Think Defence is the go-to resource for defense container blogging. gCaptain, of course, features container shipping news prominently.

And now The Atlantic is getting into it.

McLean understood that a transition to container shipping would require the complete redesign of the entire freight transport infrastructure: rail cars, ships, trucks, cranes, dockyards, everything. As a starting point, he commissioned the container engineer Keith Tantlinger to design a new aluminum container, and to reconfigure a decommissioned tanker vessel, the Ideal-X, to accommodate the new containers. Tantinger also developed a further piece of equipment, the container spreader bar, which enabled the container to be lifted without the need for stevedores to attach roping. As the economist and historian Marc Levinson has noted, the design of the spreader bar meant that “once the box had been lifted and moved, another flip of the switch would disengage the hooks, without a worker on the ground touching the container.” Container freight was all about increasing the speed of movement and reducing the cost of labor. Although the Ideal-X sailed for the first time as a container vessel in April 1956, it was not until 1970 that the International Organization for Standardization (ISO) agreed on the standardized sizes and certain fixings for containers (or ISO Containers as they are formally named).

From the nascent designs of the 1950s, through the roll-out phase of the 1960s, to the standardization of the 1970s, the container became central to the burgeoning growth of consumer capitalism, particularly the move of manufacturing to traditionally peripheral economies. The shipping container models the fundamentals of late capitalism even as it facilitates it: a standardized, reproducible structure that looks and functions the same everywhere.(emphasis mine-XBrad)

Cheaper labor is often cited as one reason why so many US manufacturing jobs have been sent overseas. That is, to be sure, a primary reason for such offshoring. But it wasn’t until the transportation costs of importing those goods fell that the combined costs of labor and transportation declined to a point that made economic sense.

And it was the reduced manpower needed to utilize intermodal containerized transportation, and the reduction in time spend handling goods between modes of transport,  that reduced those transportation costs.

It is those traditionally peripheral economies, those in the not at all distant past that were at best marginally industrialized, and at worst almost wholly subsistence level agrarian, that have benefited from the expansion of production from the First World to the Third.

So we’ve seen societies develop industry that allows their citizens to improve their quality of life.  When well meaning liberals deplore the sweatshop conditions in some foreign land, don’t forget that the real alternative isn’t conditions and salaries comparable to our society, but rather a regression to poverty and starvation. Sadly, it seems a period of substandard conditions are a necessary transition before an evolving society can further improve to the point where wages, workplace safety, and environmental considerations can take a more prominent place in those societies.

And many here will bemoan the loss of manufacturing jobs here in the United States.  But the fact is, in our every more industrialized and automated world, many of those jobs would have disappeared anyway, as domestic manufacturers decided to either reduce their workforce via robotic manufacturing, or simply abandon production.

Further, by virtue of those peripheral nations growing their economies through manufacturing, they actually serve to strengthen our own economy. These nations, formerly with little capital to purchase goods, were economic backwaters. But as they industrialize, they become markets for our own production- machine tools, construction equipment, steel and other processed metals, information and communications infrastructure, airplanes, and other high end manufactured goods that remain our productive strength. In many cases, the domestic and European markets are saturated, so finding new Third World markets for these products is critical to maintaining our levels of production, and thus wealth generation.

Quite often the first step for a nation on the path to prosperity is the exploitation of natural resources. Sadly, any number of nations have limited resources worth export or other exploitation. Further, in those  societies that do have resources, their lack of development also tends to mean they lack the civic, government, and legal institutions that prevent the exploitation of natural resources from being concentrated in the hands of a gentry with no  legitimate claim to the wealth beyond raw power. That wealth then tends to be hoarded, rather than reinvested entrepreneurially, strangling any further economic development. It is only when these developing nations turn to the processing of resources into goods that they become truly the fuel of trade, rather than mere export.

I fondly recall my time in the Republic of Korea for Team Spirit ‘87. ROK was just transitioning from a strong-arm authoritarian government to a genuinely representative government. Many of its people still lived in farming communities that looked more like the 1800s than the late 20th Century. But as they liberalized their government,  they were also  focused greatly on improving their industrial capacity, both in heavy industry such as shipbuilding, and in consumer goods such as electronics, and even into the cutthroat US auto market.  The country’s successful leverage of its human capital to add value through manufacturing allowed it to trade, and to continue to grow, improving the lives of its citizens. The shipping container made it profitable for nations to buy products from Korea where previously shipping costs would have been prohibitive.

That a simple metal box has had such an impact on the lives, however indirect, on the poor and downtrodden of so many millions around the world is stunning.