The following column is the opinion and analysis of the writer:
For nearly a week, the public gaped at the spectacle of a grounded cargo ship blocking the Suez Canal. The sheer magnitude of the Evergreen Ever Given, as long as the Empire State Building is tall and loaded with over 18,000 shipping containers, boggles the mind.
A widely shared photo of a comparatively tiny earthmoving machine attempting to dislodge it resembled a Tonka toy in a sandbox. An unusually high tide finally freed the vessel. The backlog of hundreds of ships caused losses estimated at $10 billion per day.
During the โdistantโ mostly pre-container years of 1967-1975, the war-related closure of the Suez Canal only marginally impacted global commerce. Today, a weeklong blockage is a crisis. How, many wonder, did we get here?
We often think of the internet and communication satellites as central to modern commerce. But global trade relies upon a combination of old and new technologies.
For centuries, oceangoing vessels carried both bulk commodities and luxury goods โ ranging from Chinese silk and porcelain to African slaves, from sugar and cotton to iron ore โ around the world.
After 1945, high-value manufactured goods, such as German and Japanese automobiles, were profitable enough to transport globally. Although bulk products such as petroleum and grains could also be shipped profitably, it was impractical to transport many low-value manufactured items like wicker baskets or T-shirts from low-wage producing countries to wealthy consuming nations.
Packing goods into crates, moving them to ports, loading them into the holds of ships and eventually unloading and distributing them to retail outlets was costly and time-consuming. In 1960, ocean transportation costs accounted for about 10% of price charged for exports and imports.
In the mid-1950s, a trucking company owner, Malcolm McClean, purchased several overage oil tankers onto which he loaded trailers filled with loose cargo. His Sea-Land shipping company cut transportation costs by attaching the trailers directly to trucks when they reached port.
Still, it took over a decade for the concept to catch on. So-called intermodal (ship-truck-railroad) shipping required huge investments in redesigned ports and ships and the cooperation of labor unions.
By the 1970s, standardized containers, typically 8 feet by 40 feet, could be stacked like Legos on specialized ships and offloaded by giant cranes directly onto trucks or rail cars.
Previously, it took dozens of dock workers a week or more to unload a large cargo ship. Now a few crane operators could load or unload thousands of containers a day.
Container companies won labor cooperation by offerings unionized dockworkers generous severance payouts and pensions.
The Vietnam War accelerated the container revolution. As fighting escalated in the mid-1960s, the Pentagon shipped vast quantities of supplies to American forces.
It required a week or more to unload ships in Vietnamese ports, creating bottlenecks and encouraging widespread pilferage. Utilizing shipping containers alleviated both problems.
However, after leaving Saigon, cargo vessels faced the costly prospect of sailing home empty. This created a novel opportunity for both shippers and exporters.
Manufacturers in Taiwan, South Korea, Japan and other Asian nations seized the opportunity to fill the empty containers with small electronics, cheap textiles and other consumer goods that were profitable only if transported in bulk, cheaply.
Eventually, a factory in China or Bangladesh that produced, say, Nike running shoes or T-shirts could load thousands of pairs into a single container destined for a specific Walmart store in Omaha.
The container was loaded on a ship in Shanghai, offloaded two weeks later onto a truck in Oakland and delivered to the retail outlet in a strip mall without ever being opened.
The development of optical scanners that allowed shippers to easily track each of the millions of sealed containers by attaching a UPC code to each enhanced security and efficiency.
By the early-2000s, the cost of ocean shipping declined 90% from 1960s levels, allowing low-wage producers in East and Southeast Asia to connect with bargain-hunting Walmart shoppers in Nebraska.
The ill-fated Ever Given is dwarfed by vessels carrying 24,000 containers. To accommodate these behemoths, engineers have spent billions of dollars upgrading the 150-year-old Suez and century old Panama canals. Collectively, ocean shipping accounts for nearly 70% of international trade.
Efficiency experts considered giant ships as the ideal way to reduce costs and maximize profit. After all, it cost less to have one crew staffing a single 24,000 container vessel than two crews aboard a pair of 12,000 capacity ships.
But theory collided with reality. Larger vessels are slower, less maneuverable, and potentially more accident-prone. As the saga of the Ever Given revealed, even a brief disruption of shipping in Suez played havoc with global supply chains dependent on uninterrupted deliveries.
The container revolution also had human costs. American shoppers clearly benefited from access to inexpensive foreign-produced consumer items. However, the global trade network severely disrupted domestic manufacturing.
Since 1980, the growth of international container shipping along with increased automation resulted in the loss of about half the nationโs manufacturing jobs. During this time, the real value of workersโ wages has stagnated, offsetting the bargains found at big-box stores.
Frustration over job losses and downward mobility energized political protest on both the right and left. About the only thing Donald Trump and Bernie Sanders agreed upon was that the cargo containers aboard ships like the Ever Given have ravaged the working class.
