Other effects are easier to pin down, like the loss of many dockworkers’ jobs and the death of waterfronts around the world as cargo moves to increasingly automated facilities on or beyond city limits. New York is a great case study: Levinson estimates that in 1951, nearly 13 percent of jobs in New York City depended on the city’s ports. Three decades later, nearly all of those jobs were gone. In some cases, urban waterfronts are now being reclaimed as prettified public spaces, half a century later.
Overall, the container profoundly changed the way we shop and work. Reliable, cheap transport made possible an explosion in global commerce. That, in turn, had more far-reaching consequences. When the cost of shipping American cotton to China, having it sewn into shirts there, and shipped back to Wal-Marts in the U.S. sank to nearly nothing, for example, the bottom fell out of the American textile industry. A host of other industries followed—leading to the ongoing outsourcing boom—as containers made geography nearly irrelevant. American manufacturing—which represented nearly a quarter of U.S. GDP in 1970—makes up just over 10 percent today.
Containers also changed the manufacturing process itself. The reliability of containerized shipping spawned a new field in business schools around the world, namely supply chain management. In the 1980s, “inventory” became a dirty word. Instead, everyone from
carmakers to clothing retailers adopted a “just in time” philosophy, minimizing the time parts sat in the warehouse before being assembled and sold.
That depended on the precise planning and efficiency that identical, interchangeable containers made possible. “When I started in the merchant marine, on a four-month trip to India we’d usually come back two months late and nobody noticed,” says Gerhardt Muller a retired professor at the U.S. Merchant Marine Academy and author of Intermodal Freight Transportation, an industry standard. “Now everybody jumps up and down if you’re two hours late.
When the cost of shipping American cotton to China, having it sewn into shirts there, and shipped back to Wal-Marts in the U.S. sank to nearly nothing, the bottom fell out of the American textile industry. Once shipments became predictable enough to build production and sales schedules around, managers started treating containers like warehouses in motion. By precisely timing the arrival of components, manufacturers could move items from containers directly onto assembly lines or store shelves, bypassing warehouses entirely. “In the ’80s, people realized the container wasn’t just a box for
shipping,” says Muller. “Containers were no longer about shipping—they became about logistics.
They may grease the wheels of global commerce, but those millions of anonymous, identical containers also make for a very long, very vulnerable supply chain. Experts like to talk about “resilience”—how well a system can recover when it’s rocked by a disaster or unexpected failure. Like a precision watch grinding to a halt thanks to a grain of sand, small setbacks can have big consequences. The American power grid, for example, is notorious for its lack of resilience: A tripped generator in Ohio plunged most of the Eastern seaboard into darkness in 2003, affecting 45 million people.
Indeed, the system is getting more intricate, not less. The port of the future is eerily quiet and empty. At Altenwerder, there’s none of the noise you’d expect at a busy container port. Instead of shouting longshoremen, beeping trucks, honking horns, and growling engines, there’s just the faint sound of gentle waves against the hulls of the ships and low horns of boats making their way along the Elbe.
As the Hong Kong Express takes on its Asia-bound load, the only human being nearby is a lone crane operator in a glass box 20 stories above the water. The crane slides on rails back and forth over the massive ship, manipulating a specially designed “spreader” claw to lift and shift container after container onto curious, truncated trucks. Seemingly nothing but wheels and chassis, the trucks are missing a key element: drivers.
Ports and shipping companies are working to squeeze still more efficiencies out of an already mature system. Beginning last year, “dual-cycle” algorithms help Altenwerder’s cranes and AGVs load and unload ships simultaneously, reducing time in port to a minimum. The roustabouts, stevedores, and longshoremen who once populated the world’s docks and harbors have given way to engineers and computer specialists; HHLA employs more than 100 people in its IT department.
In the name of energy efficiency, the freighters of the future will make the mighty Hong Kong Express look modest. A Danish shipper, Maersk, is at work on what it calls the “Triple-E” class. The vessels are 1,300 feet long, and capable of carrying 18,000 containers at a time, the equivalent of 111 million pairs of sneakers—27 percent more cargo than the Hong Kong Express, currently one of the largest container ships in the world. This latest generation of freighters, under construction now, is slated to enter service some time in the next year.
Could the same thing happen to global shipping? With the timely arrival of each container dependent on dozens of things going right, there’s a lot that can go wrong. “Right now, we’ve got too many eggs in too few baskets,” says Muller. In the U.S., two adjacent
ports—Los Angeles and Long Beach—handle nearly half of the nation’s container traffic.
MIT’s Rice recently set about calculating the capacity of U.S. ports, and set up an online utility, called Port Mapper, to help operators figure out how to respond if a port were taken out of commission. The nightmare scenario: an earthquake, a terror attack, or a labor strike in southern California. “If something bad happens in L.A. [including Long Beach], every other container port in America would have to have approximately 25 percent extra capacity to absorb all those containers,” Rice says. “That could not be done.” Delays as ships were re-routed to ports in Canada and the Gulf Coast of the U.S. might hold up cargo for weeks.
It’s already happened, on a small scale. In 2002, labor disputes led to a 10-day port lockout on the West Coast. Auto plants in California, accustomed to “just in time” deliveries of parts from Japan, found themselves chartering planes to bring in parts they otherwise would have had shipped, at a cost of $600 per car. When Hurricane Katrina closed ports in and around Louisiana that handle a significant share of America’s food imports and exports, food prices ticked up 3 percent and stayed there for six months as the system struggled to adjust. And Hurricane Sandy closed terminals in Newark and New York for days, forcing shippers to route their cargo to ports elsewhere on the East Coast.
The solution, Rice says, would be more ports operating below their peak capability to create a buffer in case of disaster or unexpected delays. But port operators have no interest in building inefficiency into the system, essentially paying for space and equipment they’re not using just in case of an emergency. “There’s an incentive to work at maximum capacity,” Rice says. “You know port operators aren’t working at 50 percent.”
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Indeed, the system is getting more intricate, not less. The port of the future is eerily quiet and empty. At Altenwerder, there’s none of the noise you’d expect at a busy container port. Instead of shouting longshoremen, beeping trucks, honking horns, and growling engines, there’s just the faint sound of gentle waves against the hulls of the ships and low horns of boats
making their way along the Elbe.
As the Hong Kong Express takes on its Asia-bound load, the only human being nearby is a lone crane operator in a glass box 20 stories above the water. The crane slides on rails back and forth over the massive ship, manipulating a specially designed “spreader” claw to lift and shift container after container onto curious, truncated trucks. Seemingly nothing but wheels and chassis, the trucks are missing a key element: drivers.
It turns out Altenwerder is one of the world’s few automated port facilities. Underneath the terminal’s blacktop, a grid of 19,000 sensors help guide driverless robot trucks—AGVs, or “Automated Guided Vehicles”—along routes selected for maximum efficiency. The trucks are programmed to move containers from the shipside cranes to another set of cranes, which stack them according to when they’re scheduled to be picked up by trucks or loaded onto trains. “It’s all done by software,” says Karl Olaf Petters, a spokesman for Hamburger Hafen und Logistik AG (HHLA), the company that runs Altenwerder and most of Hamburg’s other cargo terminals.
Ports and shipping companies are working to squeeze still more efficiencies out of an already mature system. Beginning last year, “dual-cycle” algorithms help Altenwerder’s cranes and AGVs load and unload ships simultaneously, reducing time in port to a minimum. The roustabouts, stevedores, and longshoremen who once populated the world’s docks and harbors have given way to engineers and computer specialists; HHLA employs more than 100 people in its IT department.