Book Review: The Box, by Marc Levinson

I read an entire book about shipping containers in an attempt to better understand market forces in the shipping industry, and I quoted a few paragraphs of it in the introduction to my report on Pacer International (PACR). In The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (Princeton, 2006), Levinson himself describes his book as something he “stopped talking about altogether, simply to avoid the embarrassment that every mention of the topic would bring”. My goal was to get a better understanding of the industry’s history so that I would have a clearer picture of where it’s heading in the future. I’m still absorbing some of what I read, but what I got out of “The Box” was something else entirely.

90% of what this book demonstrates is how poorly people were able to predict the effects of containerization even looking only two years out at a time. Granted, the 60s and 70s were turbulent times for the shipping industry. But (with the exception of a few visionaries) labor unions, the military, and industry insiders consistently got it wrong. Even McLean, the industry's most prominent visionary eventually got it wrong when he made a bet on sustained high oil prices in the early 80s, resulting in the biggest bankruptcy in U.S. history at the time. When labor unions thought mechanization would wipe-out jobs, efficiency improvements drew volume and created jobs. The military ignored bids to transport supplies during Vietnam until all hope was lost that the logistics could be worked out. Many commercial docks didn’t realize the importance of container shipping until they were closed down, giving the few desperate ports willing to make investments in infrastructure a chance to become established. And even the transport companies themselves resisted building fleets until changes in the industry were globally apparent, leading to overcapacity and the first cyclical down-swing.

This book also does an amazing job of illustrating how difficult it was for containerized shipping to get a toehold in an economy with so many inefficiencies. From cartels to corrupt labor unions, the resistance against containers was immense despite the possible efficiency gains and benefits to consumers.

Despite how interesting and educational a story Levinson was able to piece together, the book left me wondering where the shipping industry stands today. The final chapter of the book, titled “Just in Time” discusses global supply chains, but it fails to really bring us into the 21st century. Maybe a part of this is because Levinson spent 263 other pages showing us how unpredictable things are. Or maybe he reached his conclusion mid-way through the book when he said “Ship lines’ end product was basically a commodity… just like farmers and steelmakers, they would always be hostage to external forces, their prices and profit margins depending mainly on economic growth and on their competitors’ decisions to build new ships”.

Overall I would say it was a good book with a good story. It didn’t answer the questions I had, but it answered others and was educational nonetheless. I still don’t think that it has appeal to a general audience, but if you’ve read this entire review, you’re probably interested enough in the topics the book covers to enjoy reading it yourself.

Comments

[zcharles:]

could you make a few reading suggestions to learn where the shippingi s today and where it is going tomorrow?

thx

Jun 13 10:58 AM

[Windsun33:]

Containerized shipping is one of the best examples of how so many can "get it wrong". I recall stories of unions going on strike to protest them. One federal investigation found that in at least one port, the main objection to containers was mob led - due mainly to the fear that dockside theft and graft would be harder...

Jun 13 02:26 PM

[The-Stock-M...:]

There is a new and growing customer base for shipping containers - folks who transplant themselves between countries due to career or other reasons. Don't know if this is discussed in the book...

Jun 13 08:19 PM

[Miolnir:]

If you want to know about the future of the "logistics" or "Supply Chain Management" industries, then read or listen to every speech, paper, or interview of Frederick Smith, President and CEO of FedEx.
I believe the idea came from from his time as a Marine Aviator in the Korean War (supplies and logistics within the military - Marines have a word for it - cluster f#$&)
The various companies FedEx own spread across all shipping industries - air, ocean, truck, small parcels and freight shipments.

From what I read, he is already in 2020 to 2030 and the company today is accomplishing what he told them all to do 10-15 years ago.

Jun 13 09:04 PM