The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger is surprisingly insightful, riveting even. Excerpt, emphasis added by me:
This process [of international shipping] was so expensive that in many cases selling internationally was not worthwhile. "For some commodities, the freight may be as much as 25 per cent of the cost of the product," two engineers concluded after a careful study of data from 1959. Ship ping steel pipe from New York to Brazil cost an average of $57 perton in 1962, or 13 percent of the average cost of the pipe being exported-a figure that did not include the cost of getting the pipe from the steel mill to the dock. Shipping refrigerators from London to Capetown cost the equivalent of 68 U.S. cents per cubic foot, adding $20 to the wholesale price of a midsize unit. No wonder that, relative to the size of the economy, U.S. international trade was smaller in 1960 than it had been in 1950, or even in the Depres sion year of 1930. The cost of conducting trade had gotten so high that in many cases trading made no sense.
By far the biggest expense in this process was shifting the cargo from land transport to ship at the port of departure and moving it back to truck or train at the other end of the ocean voyage. As one expert explained, "a four thousand mile voyage for a shipment might consume 50 percent of its costs in covering just the two ten-mile movements through two ports." These were the costs that the container affected first, as the elimination of piece-by-piece freight handling brought lower expenses for longshore labor, insurance, pier rental, and the like. Containers were quickly adopted for land trans portation, and the reduction in loading time and transshipment cost lowered rates for goods that moved entirely by land. As ship lines built huge vessels specially designed to handle containers, ocean freight rates plummeted. And as container shipping became inter modal, with a seamless shifting of containers among ships and trucks and trains, goods could move in a never-ending stream from Asian factories directly to the stockrooms of retail stores in North America or Europe, making the overall cost of transporting goods little more than a footnote in a company's cost analysis.
Again, "By far the biggest expense in this process was shifting the cargo from land transport to ship at the port of departure and moving it back to truck or train at the other end of the ocean voyage. As one expert explained, "a four thousand mile voyage for a shipment might consume 50 percent of its costs in covering just the two ten-mile movements through two ports."
History and economics are so counterintuitive. Shipping across a four-thousand ocean mile voyage wasn't the expensive part, the expensive part was getting the stuff on and off the ships. By standardizing container sizes and having mechanized cranes do them instead of longshoremen, the cost came way down -- thus building the modern world.
Who would've thought? The whole book is really interesting, much moreso than would be expected.