Containerization came to the attention of the American public when the U.S. Government was preparing to give the Emerite of Dubai a contract to operate some of our ports. That possibility gave a special interest to the lecture on containerization presented on March 14 at the Oyster Bay Public Library as the first 20/20 Lecture Series sponsored by three Oyster Bay cultural organizations/destinations, Raynham Hall Museum, the Oyster Bay Historical Society and Planting Fields. Arthur Donovan, U.S. Merchant Marine Academy Professor Emeritus of Maritime History told the story of his newest book on the history of containerization that will come out in April. It is titled The Box that Changed the World. Published by the Journal of Commerce and is co-authored by its editor, Joseph Bonney. The lecture was titled: 50 Years of Containerization: A Brief History of a New Way of Moving Freight that Revolutionized the Global Economy.

Mr. Donovan said there are four themes that run through his story of the history of containerization industry that began on April 26, 1956. The themes are: the transformation of maritime liner service; the development of intermodalism - combining trucks, trains and ships; greater global economic integration; and trade and wealth creation.

He said the transformation of the maritime liner service into travel for passengers happened by accident. In 1817 the Black Ball Line created a Liner Service meant to carry cargo from New York to Europe on a regularly scheduled basis. People heard about the service and wanted to go too, which is how the passenger trade grew up, said Arthur Donovan. Before that ships didn't leave the harbor until they had a full cargo. A book called Square Riggers on Schedule by Robert Albion tells their story, he said.

Those first ships thought of as large in their time, have grown to a much greater size because of containerization. "Today the ships have such a draft, if New York City didn't dredge they would lose their business," he said. As a result they are blasting away about 10 feet of rock under the Bayonne Bridge, where the hard rock bottom is the part of the Palisades as it goes under the water.

The need for the greater depth for ships is the result of building boats around the containers they carry as opposed to the original concept of building ships to sail speedily across the water and filling them up with the cargo that fits. Today, he said, ships are built around the cargo box.

His PowerPoint presentation showed how the world went from carrying general cargo in bales, barrels, boxes and bags which was their method until the 1950s when the change occurred and that then, small lots of cargo were put into cargo containers which were easier to handle.

He explained that for many years longshoremen had the major task of loading the cargo onto the ship, packing it tightly to keep it from moving, and tying it down in place. Then, during the 1950s cargo arrived at the dock on pallets but the holds were irregular shaped and you couldn't put the pallets into the ship without unpacking them. He said that the loading process was seen as a fact of life - and it wasn't a problem. Not until someone decided there was a problem in the process was it solved. The problem was the time it took for a ship to be unloaded. The ship spent half its time being loaded and unloaded on a dock; and the other half of the time traveling to make money.

There were a lot of negatives in the process including breakage and pilferage when "something fell off the truck." But he said it was hard work for the men, and they received little pay and therefore, there was a culture of taking things. "There was always whiskey and the smell fresh coffee brewing on the docks," said Mr. Donovan. "The longshoremen had a skill they didn't know would be replaced by machinery."

The first signs of containerization came when Graham Brush said "let's put railroad cars on ships." They lifted up the boxcars and didn't have to break out the cargo. They sailed the ships from New Orleans to Havana where their rail system was built to American standards and therefore American rail cars could move over the Cuban tracks with no problem.

When ships began carrying truck size cargo boxes longshoremen in Puerto Rico and Venezuela were opposed to their use in the '50s and '60s. "Finally they were able to make the agreements to make it happen," he said.

"The beauty of the container system was that the ship turnaround time was so much improved. It is cheaper to go by ocean than by railroad because the typical rail trip takes more time because the cars have to get hooked up and it is an inefficient system. Trains are broken down and made up again in what are called classification yards," he explained.

Malcolm McClean was the man who made the containerization system work. He was a financial wizard who worked with his brother Jim who ran the trucks and his sister Clara who ran the office in their McClean Trucking business. They were a great team, he said, "She said men should wear hats and coats. Desks had to be cleared off at night. She ran a tight ship."

"McClean was making $12 million a year going along the eastern seaboard from Maine to Georgia. He had a lot of money and put it all at risk when he went into a new way of moving freight. We talk today of the entrepreneurial spirit that flows in the computer business - he was that kind of entrepreneur. His GM trucks had a sleeper in back so that two men operated the truck, one drove and one slept in back. When WWII was over he told the G.I.s that their Bill of Rights money could be used to set up a business as well as for education. He told them to 'start a company and get a truck and drive for me.' They were located in Winston-Salem, North Carolina. They gave General Motors their biggest order ever," Mr. Donovan said.

Mr. McClean said his containerization idea came to him in 1937 while he watched bales of cotton being loaded onto a ship. He thought they could have as well loaded the truck on the ship. It took until 1956 for him to make that happen. On April 26, 1956 the IDEAL-X departed from Port Newark. Mr. Donovan said, "It was day-one in the container revolution. The new system made the turnaround in one day."

From then it was a case of building a bigger and better ship. The concept was created and it changed things that weren't even thought about. It stopped the cargo stealing. The longshoremen were the ones who learned how to operate the gantreys that loaded the containers onto the ships. The number of longshoremen declined but their retirement benefits and wages were vastly improved and most of the heavy physical work was eliminated. Mr. Donovan said those on the west coast now average over $100.000 a year.

He showed a slide of a cross section of a modern ship that showed rows of containers stacked on top of each other, side by side, filling the entire ship. On top of them (about five rows above) was a hatch cover which then supported two more layers of containers.

Mr. Donovan explained that during the Vietnam War there was a problem with Saigon, the country's single port. As he related the story: "The US military said, we are supplying both sides of the war through things being stolen and getting to the enemy. There was no secure warehousing. Mr. McClean told the army he would sign a fixed cost contract saying, I'll build the docks, run the ships and bring in the cargo and put in a trucking system to deliver the cargo throughout the country wherever the troops are located." The docks were built like petroleum platforms with cylinders sunk into the seabed from platforms above. The down side was the empty ships going out of the port, but Mr. McClean took the opportunity to direct them to Japan where he could pick up cargo, solving a problem and creating another market opportunity.

Mr. McClean surprised everyone with another idea. He built a midbody for a ship designed to hold containers. The midbody was built in Germany and towed to NY where he took the bow and stern from a surplus tanker and attached it to the ship he named the Elizabethport in 1962.

Another big change in ships came with the C-10, a Post Panamax ship, part of the American Presidents line, (named after presidents). It was so wide it couldn't go through the Panama Canal. Instead it was brought to a port and the containers were put on a railroad to move it across a landbridge. Mr. Donovan said, "It was more efficient to carry cargo containers from the far east to America's west coast and send them by rail to points east. This is an example of how the container system flows through different modes of transportation." That system has grown so that now, he said, "Moving containers just displaced coal as the most revenue producing cargo for American railroads."

Mr. Donovan ended the slide presentation with the Maersk Line Vision statement: "We create opportunities in global commerce." He said, new names are springing up for containerization: logistics and supply chain management. His last topic was: "Dubai, and the great port controversy."

Mr. Donovan said the controversy brought up the real problem in containerization - and that is safety. It showed how much flows through ports without being documented.

He said, "Though a disaster hasn't happened it can, but no one wants to stop the process. No one wants to shut it down. If they did it would close down Wal-Mart, Home Depot, Dole Food and Ikea, among the top users of containerization."

"Chuck Schumer asked why can't we inspect all these boxes," Mr. Donovan said "You can't open one a minute. First the container has to be opened, then you see a wall of cardboard and then you have to find out what's there. We are pushing that question to the supplier. It is in their best interests to see that what they send in the containers is what is on their lists. We have to rely on those papers."

He said the government is working on the problem, "The Coast Guard is watching world wide. They are now engaged in supervising container security in foreign ports with the agreement of those foreign governments. Everyone who knows the industry knows there are still risks. You can't eliminate risk."

Governments are trying however. There are two methods, Gamma silhouetting and detecting radiation with a Geiger counter. He said, "Hong Kong is doing both but they don't get everything. It is high tech stuff."

Someone in the audience asked about our current state of deficit trade and asked what do we do with all those empty containers that don't go back to the country of origin.

Mr. Donovan said, "Yes, many containers go back to China empty. The main thing America exports to China is compressed hay for cattle feed lots and waste paper which they process into paper products. They don't have the amount of wood pulp we have."

He added, "Companies are springing up to recycle containers."

He gave an example of the cost of ocean shipping: it costs 34 cents to send a $45 pair of shoes. It costs $90 to send an $11,000 motorcycle. He said, "One of the consequences of containerization is a great expansion of trade and, as Adam Smith said, 'Trade creates wealth.'"

In a telephone interview on Wednesday, March 15, Mr. Donovan explained more about the Dubai situation, in which the UAE (United Arab Emirates) itself withdrew from the proposed port contract. He said, "Dubai has a great history of cooperation with America. The company is owned by the Emir of the nation. They have been most cooperative with America in many ways. Look at the Op-Ed piece in The New York Times today, written by Thomas L. Friedman Dubai and Dunces, it explains the story."

In the piece Mr. Friedman writes, "Dubai is precisely the sort of decent, modernizing model we should be trying to nurture in the Arab-Muslin world."

Professor Donovan said, "Of course we want to eliminate threats and risks but we should realize liberty involves risk and some dangers have to be accepted and Dubai is about as good a bet as we can get." He said, "It is difficult to defend liberty and it is difficult to be tolerant at the same time."