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Malcom P. McLean: The Father of Modern-Day Commerce and the Global Economy

– Not bad for a farm boy with a truck from Maxton, North Carolina! –

You may not think of shipping containers unless you see them stacked sky-high on ships or attached to the back of semi-trucks, but these square, metal boxes have revolutionized the shipping industry and have made global trade on a mass scale possible.  And it all started with an innovative farm boy from a small town in North Carolina.

Malcom McLean was born in 1913 in Maxton, North Carolina.  By the time he graduated high school in 1935, the country was in the midst of the Great Depression and his parents could not afford to send him to college.  That same year his sister, Clara McLean, and his brother, Jim McLean, started a small trucking company, McLean Trucking Company.  Malcolm went to work for them as a driver, hauling small farm loads in a second-hand truck he bought for $120.

Malcom P. McLean

McLean at the Port of Newark, 1957. Source: Wikipedia

One day in 1937, McLean made a delivery of cotton bales to a port in North Carolina to be shipped to New Jersey.  McLean couldn’t leave until all the bales on his truck were unloaded, so he sat for hours watching workers load thousands of small items onto ships, one by one.  He quickly realized what a waste of time this was and sought out to create a more efficient process. 

His answer was to load whole trucks with cargo onto ships.  At the time, this wasn’t an entirely new concept.  The US Government did this in WWII and even started experimenting with their own containerization. 

It wasn’t until 19 years later that McLean was able to put his concept to practice.  But after some initial experimentation, he quickly saw his “whole truck” method was inefficient as there were large amounts of wasted space on the ships.  So back to the drawing board he went and came up with a standardized “container” that could be removed from the trucks chassis and loaded directly onto ships.  He even came up with a mechanism to stack the containers to maximize cargo space.  This was the origin of the modern-day shipping container and the advent of “intermodal transportation.”

Now to put his vision to work.

McLean secured a $22 million bank loan and bought two WWII tankers which he converted to carry containers under the name of the Pan-Atlantic Steamship Company. On April 26, 1956, one of the ships, The Ideal-X left Port Newark-Elizabeth Marine Terminal for the Port of Houston with 58 containers on board, sailing into the history books and changing the face of global transportation forever.

SS Ideal X

SS Ideal X. Source: Maritime

Not everyone saw this new shipping method as a celebratory event.  Freddy Fields, a top official of the International Longshoremen’s Association saw the potential unemployment of legions of his workers.  When asked what he thought of the ship, he replied, “I’d like to sink that son of a bitch.” 

In 1960, McLean would change the name of his company to SeaLand Services, Inc. which would grow to be the world’s largest cargo-shipping business of the time.  McLean proved his containers to be safer and more efficient.  Clients and ports around the world agreed, building container-ship compatible facilities globally.  By the late 1960s, SeaLand had 27,000 trailer-type containers, 36 trailer ships and access to over 30 port cities.

But competition in the industry exploded during that time as well as McLean’s system proved superior to any other shipping method.  Other companies adapted, building bigger ships and more sophisticated containers.  SeaLand, needing cash to stay competitive, was sold to Reynolds Tobacco Company for $530 million in cash and stock.  McLean received $160 million and stayed at the company as a board member, although he resigned this position shortly after, saying, “I am a builder and they are runners.” SeaLand was eventually sold to CSX and Maersk.

Not one to sit on the sidelines, McLean bought United States Lines (USL) in 1978.  There he built the largest container ships afloat at the time.  He was listed as Forbes 400 Richest Americans in 1982 with a net worth of $400 million Unfortunately, USL went bankrupt in 1986 due to competition by faster ships and McLean declared bankruptcy shortly after. 

At 78 years old, he threw his hat in the ring one last time with the founding of Trailer Bridge, Inc., a freight service which operates between Jacksonville, FL, Puerto Rico and the Dominican Republic.  The company is still in operation to this day.

Malcom McLean died on May 25, 2001 at the age of 87.  In a Forbes Magazine article, McLean was called “one of the few men who changed the world.”

On the morning of McLean’s funeral, container ships around the world blew their whistles in his honor.

While McLean is truly the “Father of Containerization,” it can be argued that he is also the father of modern commerce and the global economy. Containerization has reduced shipping and loading costs by 90%, making goods less expensive and opening other countries up to participate in the global market, elevating the quality of life for citizens around the world.