The Man who made international trade fast, efficient and affordable!
Malcolm McLean, was born on November 14, 1913, in Maxton, North Carolina, the son of a farmer. A natural entrepreneur, he got his start selling his mother’s eggs on commission while still in school. Upon graduating the family didn’t have enough money for him to go to college so McLean, along with his brother and sister, invested their savings in buying an old truck and started a trucking business in 1934.
The genesis for containerization first came to him in 1937 while sitting in his truck in New Jersey, having just driven up from North Carolina with a shipment of cotton. He was forced to sit and wait for hours as dockworkers unloaded trucks piece by piece until finally it was his turn to pull up to the dock. Although it would take him 20 years to make the dream a reality, it was then that he knew there had to be a more efficient way.
The McLeans would spend two decades turning McLean trucking into one of the top 5 trucking companies in the United States. Along the way McLean would become an expert in the shipping industry logistics. Although in the early 20th century other companies had experimented with putting whole trucks on ships and the Navy had done something similar during WWII, it was McLean who envisioned the potential that container shipping held.
In the 1950s almost all shipping of goods around the world involved emptying trucks via pallet or by piece by piece, then loading them onto ships via a hoist. It was extraordinarily inefficient and ships could spend more time at dock loading than the time it would take to sail to their destination. McLean thought there was an opportunity to make shipping far more efficient based on the idea he had started thinking about in his truck in New Jersey almost two decades earlier: Containerization – the shipping of containers packed full of products rather than products individually. The genius of McLean’s idea was that the containers could be lifted directly off trucks or trains right onto the ships and be lifted directly onto trucks or trains at the destination. He patented his system of interchangeable containers and called them “intermodal shipping containers”. In a world where millions of tons of goods were shipped annually, McLean’s containerization created extraordinary opportunities.
Suddenly, shippers could pack containers full at their warehouses and they wouldn’t be opened until they were emptied at their destinations. To make this dream a reality McLean secured a $22 million loan in 1956 and bought two oil tankers. He reconfigured them to carry containers on the deck and in the hull and a new world was born. A year later McLean launched the first ever ship built specifically as a container ship. He would name his company Sea – Land, communicating that his containers would ship on sea and on land.
The result of McLean’s revolution was stark. Loading ships the traditional way cost $5.86 per ton but with McLean’s containerization it cost a mere $.16 per ton, a savings of 97%. With tens of millions of tons shipping each year that gave shippers a tremendous savings. Beyond the logistics benefits, McLean’s shipping revolution dramatically reduced the amount of theft and damage of products during transport.
Today there are almost 20 million shipping containers used around the world with 5 million sitting on ships sailing around the oceans at any one time. The industry Malcom McLean revolutionized helped transform the face of international trade as millions of tons of goods are shipped, trucked and sent on rail every year, generating tens of billions of dollars in revenue for the industry and saving consumers and companies trillions of dollars over the decades since.
Malcolm McLean died in 2001 at the age of 87 having transformed the world. The next time you eat a banana from Panama or shrimp from Vietnam or drive a car from Germany you can thank McLean. While he didn’t invent shipping, his “intermodal shipping containers” made fast, efficient and inexpensive shipping of goods around the world possible, opening up new markets for manufacturers and farmers and giving consumers a kaleidoscope of choices in everything from food to clothing to cars and more.