How a box inspired a four trillion-dollar industry

by | Jul 12, 2023 | Blog | 0 comments

Today container ships move 95% of all manufactured goods around the world.

In 2017, more than $4 trillion worth of products moved across the oceans. Today’s global economy doesn’t work without container ships.

Putting merchandise in ships started in the third century BC, when merchants realized that sending products overseas was cheaper and faster than moving them over land.

In the early days of shipping, goods were loaded onto ships in a variety of sizes of sacks, barrels and wooden crates. Scores of dockworkers squeezed goods into spaces on decks or tight spaces below.

In the 1950’s, as ships started to carry more goods, they often spent more time in port than at sea.

Not good.

How a box inspired a four trillion-dollar industry

A ship is capital equipment and the biggest cost for capital equipment is the cost of not working. So how did the shipping industry solve the problem?

Their answer?

Bring in the shipping experts.

Their experts’ advice?

Build ships that are faster.
Build ships that are more fuel efficient.
Reduce crew size.

The result?

Costs were still rising and it still took longer to get merchandise delivered. The problem didn’t get any better. In some ways it got worse. The shipping industry was dying.

More goods began to pile up at docks waiting to be loaded which created another problem, the more goods that were just sitting and waiting, the more merchandise got stolen. And, don’t even think about shipping something perishable like fruit or vegetables.

Enter American truck driver Malcolm McLean. The truck driver provided a different perspective than the shipping experts. McLean knew about hauling freight but he didn’t know anything about how to build ships.

But in McLean’s view the problem wasn’t with the ships while they were at sea and working. The problem was when they were sitting at the dock waiting to be loaded and not working. Malcom McLean decided to focus on the costs of not working and reduce the amount of time a freighter does not work.

How to do that? Eliminate the time-consuming job of stowing odd shapes of freight on the ship.

His idea. Create a standard size box containing the freight. Load the standardized containers on land before the ship is in port.

His invention. The container ship

In 1956 McLean stacked 58 metal boxes, all the same size on a converted WWII oil tanker, that traveled from New Jersey to Houston. This idea completely revolutionized the industry.

The containers not only protected the products, but when the ships docked at ports, truck beds and freight trains could take them away without repackaging.

Today, the industry continues to boom.

A single box can hold 10,000 iPads at a shipping cost of $0.05 each from Shanghai to Hamburg. The average TV coming into the United States from China costs less than two dollars to ship.

If turned upright, container ships are as high as the Empire State Building and can move more than 20,000 container boxes.

The most recent growth in the container shipping business has been in refrigerated shipping. Using refrigerated boxes, fresh produce, food and flowers that used to move only by plane now move in satellite tracked refrigerated boxes that keep them fresh.
Bananas can last in these boxes for up to 50 days.

This 4 trillion-dollar industry is testament to the value of getting an outside perspective.

The lesson: Get an outside perspective.

As problem-havers, our point of view is unavoidably biased, and often limited by the toll or impact we see in our lives or organizations.

Outsiders—other people that aren’t involved in the problem you are working on—bring a fresh perspective to the situation, often unlocking breakthroughs. Outsiders should be truly outside—they are not the “experts” in your industry.

These people bring new insights because they aren’t locked in by past knowledge or present practice. They don’t know what can’t be done, their outlook is limitless.

This story and other examples of solving the real problem are in my new book, Solve the Real Problem, that is scheduled to be released in August. I will be signing all preordered hard copies of the book and you can now preorder the electronic version. Click here to preorder! 

Save The Date

You are invited to the official release of Solve the Real Problem

Thursday, September 21, 2023

Because you are receiving this, you are invited to the official release of the book on Thursday September 21, 2023. The book release party will be at Seneca One Tower—1 Seneca St., Buffalo, NY 14203. Doors will open at 5:30 PM. I will be doing a talk about the book at 6:00 PM then I will sign books while you enjoy food, drinks and live music. More information will be coming soon. Please plan to attend!

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