Different government agencies in the United States helped to standardized and increased the use of shipping containers throughout the world. For example, Marad as well as the Federal Maritime Board, possessed vast authority in the maritime industry. In his book, Marc Levinson argues that these agencies, “dispensed subsidies to build ships, administered laws dictating that government freight should travel in U. S. -flag vessels, gave operating subsidies to U. S. ships on international routes, and enforce the Jones act”(128). In the beginning of the 1960s, these governmental associations helped to enhance the use of containers around the world.
When the shipping container was first introduced, there was no standard size established in the industry. The use of different sizes and shapes of shipping containers made it very difficult to increase its use since it was not every company who could cope with the different sizes and shapes. By establishing international standards, these agencies reduced the confusion surrounding the reception and expedition of containers, making everyone able to adapt their operations to welcome the containers of the different shipping companies.
The role played by the American government in defining the regulations regarding the container definitely played a major role in the spread of its use around the world. Marad also played a significant role in “various other complicated issues, such as the strength of corner posts, the design of doors, and the standardization of corner fittings for lifting by cranes” (131). This really helped the companies to focus their effort on other important problems, allowing the container shipping industry to take off for real in the beginning of the 1970s.
In addition, the government played a major role in financing companies in the coastal shipping industry. They were giving many subsidies to companies to build new vessels that could easily transport containers on board. Without these financial support, it would have been much more difficult for the firms to open out their operations and spread the use of containers around the world. They also gave the right to a small number of companies to sail on international routes, allowing them to expand their business operations.
The government also helped to increase the visibility of the different benefits in using the container as a way of shipping goods during the Vietnam War starting in the mid-1960s. At the beginning of the war, the defense department of the United States had various logistical problems shipping material goods to the soldiers across the sea. Using big conex boxes to transport their goods, the American Defense Department proved that this method was clearly not efficient, receiving mixed up or broken merchandise.
After the construction of facilities in ports to help receiving containers, the use of containers really spread during the war. The introduction of the container during the war prove to be very efficient in speeding up the time of transportation of vital goods for soldiers from the United States, as well as enabling the army to keep track of the goods ship abroad and set the priorities of shipment. Rather than using their own ships that were not suited to the transport of containers, the army subcontracted this contract to companies such Pan-Atlantic and Matson.
The American government provided enormous amount of money to these companies in order to transport their goods to Vietnam. By giving out these contracts, the government made it possible for these businesses to establish themselves and build solid financial grounds. When Malcom McLean introduced the shipping container in his company in the mid-1950s, this move was highly disapproved by the union. The introduction of the shipping container came along with some degree of mechanization, a process that was seen as threatening the jobs of the longshoremen in the coastal shipping industry.
Since mechanization would greatly reduce the numbers of longshoremen needed to execute the job, unions were very skeptical by its introduction. The two biggest unions, the International Longshoremen’s Association and the International Longshoremen’s and warehousemen’s Unions, both agreed that the shipping container could have a considerable impact in reducing its workforce and major conflicts emerged between management and unions. After fighting many years against the introduction of the shipping container, unions finally realized that the mechanization of their industry was inevitable.
Instead of fighting over a battle they would probably never win, they sought to gain some benefits for their workers and take advantage of the situation. This change of mindset from the unions definitely had an impact on the spread of the use of the shipping container around the world. By being more open, they give the right to companies to change their mode of operations and smoothly expand the use of containers for transporting goods and other commodities around the world. The unions started to adopt more flexible policies regarding mechanization nd sought to find ways to improve the benefits of their members under mechanization. By concentrating their efforts away from the mechanization issue that hang above this industry for years, unions greatly reduced the amount of conflicts with management. The introduction of the shipping container allowed the companies to make enormous profits, something that did not pass unnoticed by the union’s leaders. Senior longshoremen could now have access to generous retirement plan, causing the industry to face a labor shortage in the mid-1960s since many seniors decided to retire.
By the beginning of the 1960s, the unions started to demand the employers to mechanize their operations faster, realizing that mechanization could reduce the high physical burden on their members. This industry was really though on the bodies of the longshoremen who had to work long hours and handle really heavy merchandise all day long. This prove to be a major determinant in the spread of the use of shipping containers, allowing the companies to mechanize their operations without having to face disapproval from the union’s members. The spread of the use of shipping container had an enormous influence on many aspects of the economy.
Back in the early 20th century, even though people could sail quite easily from one continent to another, it was a lot more difficult to transport goods because the boats and the ports were not suited for this kind of business. It could be really expansive for manufactures to ship goods out of the country, thus most of them relied on local markets to sell their products. However, the introduction of the shipping container made it easier for manufacturers of goods and commodities around the world to expand their horizon and start selling internationally.
Although the introduction of the shipping container required enormous investment by the firms, this factor was offset by the profits made by these companies caused by a great reduction in the shipping costs. They could transport more goods at a cheaper price and at a faster rate on boats specially suited to welcome containers on board. This increase in the flow of goods around the world had the impact to intensity international competition between firms, which in turn had the influence to put downward pressure on the prices of goods and commodities.
The increase in the accessibility of goods and the reduction in prices definitely raised the standard of living for most people around the world. As pointed out by Levinson in the first chapter of his book, before the introduction of the container, “Japanese families did not eat beef cattle raised in Wyoming, and French clothing designers did not have their exclusive apparel cut and sewn in Turkey or Vietnam” (1). The containerization system made it easier for business to import and export goods and commodities around the world, which had a direct impact on the population as a whole.
On the other hand, the containerization system also had negative impacts for the workforce in the costal shipping industry. The use of containers required a big adjustment in the way the work would be handle in ports. Because it was physically impossible for the workers to move the containers, the mechanization of ports was a necessity. By mechanizing certain of its operations in handling the containers, this had the negative impact of reducing the number of workers needed to execute the job. In the 1950s, unions were widely opposed to the introduction of the containers in ports.
Although unions were able to negotiate better working conditions and better wages for the senior longshoremen, the introduction of the container in this industry greatly reduce its workforce. Beside the shipping industry, the introduction of the container also had a tremendous impact on the manufacturing industry. The owners of businesses could now displace their operations in countries where they could pay less for labor. Because it was easier to import goods everywhere around the world, a firm in the United States could produce goods in low-wage countries, imports those goods, and sell them to lower prices locally or internationally.
People working in the manufacturing industry in highly industrialize countries such as Canada and the United States were seriously impacted by the alteration of the world economy. As pointed by Levinson in chapter 3 of his book, “The changes in transport costs induced by containerization hit manufacturing, too, eliminating not only factory-floor jobs but also related trucking and distribution work as plants moved out of New York”(98).