Interpretation of the Essence of Container Changing the World

first, how the container was invented. From this process, you will see that a single breakthrough is not innovation, but systematic innovation is real innovation. Second, how to promote the application of containers on a global scale. We will see that the content of science and technology is not an important factor affecting innovation, and the key to innovation lies in application.

About the author

Mark levinson, the author of this book, is a famous American economist and best-selling author.

Part I

Let's look at Part I: How containers were invented.

The inventor of the container is McClane, an American. People call him "the father of containers". But actually, to be more accurate, McClane was not the first person to invent the container. It took decades for people to use containers before McClane began to use them. You may feel strange that something that has been invented for decades has no technical content. Why did it become a new invention that can change the world when it was handed over to McClane? This is the power of McClane. Let's talk about this in detail.

McClane's first job was as a truck driver, and then he slowly became his own freight company. He has the gift of a businessman. We know that in commercial competition, saving costs is a hard work. Whoever can save more costs will have lower product and service prices. McClane is an expert in this field. When other trucks were still using gasoline, he replaced all his trucks with diesel, and in order to save fuel, his drivers had to go to a fixed gas station to refuel, because that would get a discount. What's more, the siding of their company's trucks is not smooth, but crib-shaped, because he heard that crib-shaped carriages can reduce wind resistance, thus saving fuel costs. You see, McClane is such a man with business talent and careful calculation. By 194, under the background of World War II, the industries of material production, transportation and logistics in the United States began to flourish, and his transportation company was rising. By the end of World War II, McClane's company was already one of the largest transportation companies in the United States, and its after-tax income ranked third in the industry, which was very successful.

However, with the development of his career, McClane also encountered a bottleneck. At that time, the expressway was very congested, which was a huge problem for his transportation business. You think, an entrepreneur who can reduce fuel costs by reducing wind resistance can't stand the loss of a truck for hours or even days. Therefore, McClane thought it would be better to go directly by sea, build a pier by himself, let the truck's containers get on board directly, and then let the truck across the street pick up the containers. Do you think this is his innovation? Not really. Many companies have tried this, but they are all scattered containers, and whoever pays for the boat at the dock will deliver the goods, but McClane proposed to build his own dock. Later, McClane discovered that by directly loading a large iron box onto the ship, these iron boxes could be erected and more could be loaded at a time. You see, this model is already a container at this time. Do you call this innovation? Not really. As we said before, the mode of shipping by container has been running for decades. So where is McClane's innovation? In fact, it is his first attempt to build a system.

McClane realizes that the fundamental business of the shipping industry is freight transportation rather than navigation. To reduce the freight cost, it is not just iron boxes, but a whole set of new methods for cargo handling. This system includes ports, cargo ships, cranes, trucks, and shippers' own operating methods, and all of them have to be changed. This understanding was much more advanced than that of people in the same industry at that time, so his contribution was not to use containers, but to change the whole operation mode of the freight industry.

after the establishment of this system, McClane made an attempt. If the beer is transported, it will be transported in bulk once. When it comes out of the factory, it will be loaded on the truck, unloaded at the dock and loaded on the ship. When it reaches the other side, it will be unloaded from the ship and loaded. At this time, the freight for each ton of beer is $4. If containers are used, they are directly stuffed into boxes from the brewery and transported to the opposite wharf, the cost becomes 2 cents, saving 95% of the freight. This also means that a huge and brand-new opportunity for the shipping industry has arrived.

In order to enter the shipping industry, McClane once acquired a company engaged in the Atlantic shipping business. Now he has discovered new opportunities in the shipping industry. Where is a company enough? He feels that he has to buy the parent company of that company and monopolize the shipping business in the Atlantic directly. You see, his ambition is very big. However, when advancing this matter, he found that the problem he was facing was getting bigger and bigger, financing was a problem, equipment often broke down was a problem, and even many people stole containers back to use as houses. In short, although your own system has been optimized, the social system around you has not kept up with your rhythm. So in the first few years, McClane never imagined that his company didn't make money, so there was nothing he could do. He tried to improve the system through all kinds of careful tactics, and finally he was forced to support it to a turning point.

around 1967, when the United States fought the Vietnam War, it needed to transport a large number of goods from the United States to Asia. The ratio of war is efficiency, so the American government has made various optimizations around this efficiency issue, and finally found the best way to use containers, which is the so-called 3C principle-one box, one cargo, one destination. The English words of these three words all start with C, so they are called 3C principle. After repeated experiments, only this method is the most effective. The opportunity for McClane to turn over has come. The year before, he lost money, but the year after that, he earned 45 million dollars from the US Department of Defense, and the whole container boom era really came.

From this process, we can see that it actually takes a long time for an innovative product to be invented and widely used. In this process, it is very likely that the first person to promote it will not survive the day of the outbreak and enjoy its dividend, but McClane is still lucky. This phenomenon that the first person who eats crabs is likely to die is also a dilemma that many innovators encounter in reality. This can also answer the question we asked at the beginning, why did the container become a new invention when it reached McClane, because the new invention in the real world is actually a systematic project, and the value of a product lies not in what it is, but in how it is used.

For a highly automated, low-cost and low-complexity cargo transportation system, the container is the core, but it is only the key link of this system. The real difficulty lies in building this system and making it run stably. And McClane was the first to see this direction, the first to try with action, and the first to succeed. Without him, the container would still be loaded as an ordinary tin box. It was McClane who made the container play its greatest role, so people thought he was the inventor of the container.

To sum up, in this section, we talked about the invention process of containers, and how McClane, the "father of containers", discovered the functions of containers and developed them into a set of revolutionary freight system. We can see that innovation is not just a single product created, but actually a systematic process.

Part II

Just now, we said that McClane started to use containers in his own shipping business and built a complete set of supporting systems by himself. So, will this new invention be popularized soon? Far from it, the story about containers has just begun. This invention, like all great innovations, stirs the fate of all practitioners in this industry, and the more powerful it is, the more unexpected the result will be. Next, I will talk about the later evolution of containers and its impact on the world, which is also our second part.

Earlier, we told McClane's entrepreneurial story. After many years of hard work, he finally turned a profit. Mcclane's company had 31 container ships at that time, and its operating income increased greatly. This industry suddenly became a hot industry. As soon as the industry became hot, competitors entered the game one after another. Every time a new airline is opened, several competitors will suddenly flood in. On those international routes with the largest freight volume, the carrying capacity has increased 14 times in six years. Between the United States and Europe, only a small number of containers were in circulation before 1966, and by 1974, 1 million containers could be operated. The lifting speed of the carrying capacity of the whole shipping industry is far greater than the demand, and the price war has begun in the industry. The price war is nothing new, and all industries are like this, but it has a great influence on the container shipping industry.

before the large-scale application of containers, if the shipowner thinks that the business is not good, there is basically no cost to let the ship stop for a few days, but even if the container ship does not operate, the cost is particularly high. If a company wants to expand, it has to borrow money. Their ships, containers and ports are all bought by borrowing money, and they have to pay interest if they stay there. Coupled with fierce competition, oil prices soared, and before long, the price of the entire shipping system began to collapse, and shipping companies suffered heavy losses. The Financial Times even said that the revolutionary influence of container transportation is coming to an end.

But Mark levinson said that the Financial Times was wrong. The revolutionary impact of containers has just begun. I sum up these influences in three aspects: containers have brought industrial changes to the shipping industry, tremendous changes in the fate of the shipping industry practitioners, and profound changes in the geopolitical and economic patterns of the whole world. Let's talk in detail.

first of all, containers have brought about industrial changes in the shipping industry.

Traditional classical economics has always been accustomed to assume that the transportation cost is zero. From the economist david ricardo until the 199s, the issue of transportation cost has never been concerned by mainstream economists. For example, Ricardo said that Portugal and England can produce their own wine and cotton cloth with cost advantages, and then trade with each other. This assumption makes sense in theory, but it is not so simple to operate. If the cost of transportation is too high, it is basically impossible to achieve.

in fact, before 1956, the freight cost was very high, and it was a very complicated project to transport goods by ship. You think, the goods should be moved from the factory to the truck one by one. After the truck arrives at the dock, it should be unloaded one by one, registered, and then put into the transit shed next to the dock. When a ship is ready, it should be counted all over again, and then loaded onto the ship by dockers. After a set of procedures, the dock is a mess, with cardboard boxes and garbage everywhere, and the whole dock is basically a mess. In order to reduce the freight cost, the factory naturally wants to build it closer to the dock, and as a result, there are all kinds of factories around the dock. The whole cargo transportation industry needs so much manpower, so naturally there must be residential areas, and dockers and all kinds of practitioners want to live nearby. Therefore, the whole terminal can only be described as "congestion", and the whole shipping industry also shows a slow, bloated and dull atmosphere.

naturally, the efficiency will not be high in congested places. For example, at that time, a pharmaceutical company wanted to transport a truckload of drugs from the midwest of the United States to an inland city in Europe, so they needed to spend almost $2,4, and this money would be consumed by all links on the way, such as truck transportation, port warehouse management, shipping companies, insurance companies, etc., and every link was consumed. Finally, half of the cost of a cargo transportation was wasted at the port. But the appearance of containers is different. It is characterized by standardization and systematization. First of all, the size of containers is the same. Almost all shipping companies in the world use compatible containers, which can be freely loaded and unloaded by trucks, trains, ports and ships. The handling process mainly depends on cranes, and each box is filled with one product, which saves the process of picking, so the efficiency is naturally greatly improved and the cost is plummeting. Because of the improvement of efficiency, there is no need to build factories around the pier, and workers can live outside the pier. You see, the whole cargo transportation industry has changed from a dull state to an efficient state, which has brought about simultaneous changes in the internal operation mode and external environment of the shipping industry. This is the great change brought by containers.

Secondly, containers have brought great changes to the fate of the shipping industry.

just now, we said that containers have changed the transportation process of the whole freight industry, and the working conditions of the employees in them have naturally changed greatly. For example, dockers. In the past, the life of dockers was very hard. You think, the goods were always dozens of kilograms in a bag, including those steel ingots, metal equipment and huge wooden materials, which were all carried on board by people. Many times, after a day's work, they could not straighten up. Moreover, this kind of pure manual labor is not only very tiring, but also has low income and no social status. They gathered in groups in the slums around the pier, and their work was temporary, so they gradually formed their own culture and were very United. For the dockworkers, unity is certainly a good thing, and it can guarantee the interests of this group without being bullied by the boss, but it actually hinders the promotion of innovative products like containers to some extent.

From the dock worker's point of view, the arrival of the container is tantamount to robbing one's own job. Although the original job is a little tired, it is at least a job, and it is not easy to get this bitter and tired job. For example, every morning, these workers have to grab jobs, and ordinary workers have to give money and bribes to the foreman if they want to get jobs. It can be seen that the trade union leaders here have vested interests. If they want to protect their own interests, they will find ways to undermine the innovative activities of capitalists. For example, at the beginning, some people thought about reducing the cost of transportation and handling at the dock by means of centralized freight. Of course, at the beginning, it was not a container, but something called a pallet. It was a big wooden plate. A lot of goods were put on this pallet, transported to the dock, then hoisted to the ship with a net bag, and then placed in the cabin. Didn't this save a lot of costs? But the dockworkers don't do it, which is tantamount to grabbing work, so they also got a pallet. When transporting goods, the original pallet was disassembled first, and then the workers put it on the boat. This tool of pallet failed to improve efficiency.

At first, the implementation of containers met with great resistance under the resistance of dock workers, but later, everything in the dock gradually became mechanized, so the dock workers came out to negotiate with the capitalists and said that they would share the dividends, which broke through the resistance of the dock workers. Of course, after mechanization came, many new jobs were created, and the original handling work became technical work such as operating machines, and the original dockers lived a decent life. This is also one of the uncertain factors brought by new technology. If the old division of labor is replaced, a new division of labor will be created. you see