#281: Shipping Container – Yep People Are Living In Them copertina

#281: Shipping Container – Yep People Are Living In Them

#281: Shipping Container – Yep People Are Living In Them

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 The Shipping Container innovation dropped shipping costs from $5.83 a ton to 16 cents. It made the world a smaller place. Dave Young: Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So, here’s one of those. [Tappers Jewellers Ad] Dave Young: Welcome back to the Empire Builders Podcast. Dave Young here with Stephen Semple, and we’re telling you stories about empires and things that changed the world. And man, today’s topic changed your world. It changed your- Stephen Semple: Oh God, yeah. Dave Young: It changed everybody’s world, and it’s probably simpler than you think it ought to be. And it is the story of the shipping container, right? The big metal sea cans, the boxes that now people are living in them. Stephen Semple: It’s true. Dave Young: What can we turn this into? But for most of mankind’s history, ships were loaded by burly men lugging things up ramps. Stephen Semple: Well, we see those old movies where there’s a net with stuff in it being lowered down to the- Dave Young: Yeah. A big net lowered into a hole in the ship to get it down into the hold. And that’s just how it worked for forever. Stephen Semple: Well, it’s estimated that this innovation dropped shipping costs from $5.83 a ton to 16 cents. And this is- Dave Young: 16 cents a ton. Stephen Semple: Yeah. Which, all of a sudden, made it possible. There were all sorts of products that just you couldn’t ship because the shipping costs were just too high. Dave Young: Yeah. Stephen Semple: Right? Dave Young: That changes Tennessee Ernie Ford’s song completely, right? You load 16 tons, what do you get? $2.56 is what you get. It’s not another day older and deeper in debt, $2.56. Stephen Semple: So this is really the unsung story of globalization, and it’s funny. It’s funny how the world works because you just shared with me that somebody else is about to do something on this nonsense topic. Dave Young: Story, yeah. Stephen Semple: So just for the record, I didn’t- Dave Young: Yeah, here we are. Stephen Semple: Here we are. We’re ahead of them. So, what we’re going to be talking about is Malcolm McLean who founded Sea-Land in 1960. Now in 1969, he sold it to R.J. Reynolds for $530 million. Dave Young: When he’d… Stephen Semple: 1969. Dave Young: ’69 for half a billion. Stephen Semple: Half a billion, yeah. For half a billion in 1969. Not bad. Dave Young: I mean, it had taken off in ’69, but it nowhere near what it’s today. Stephen Semple: No. It was nine years after the launch, right? So, it was crazy. Dave Young: Yeah. So, R.J. Reynolds? Stephen Semple: Yeah, R.J. Reynolds bought it. Dave Young: The tobacco people on… Stephen Semple: Yeah. But remember, there was that time where tobacco companies were getting into absolutely everything under the sun. Dave Young: They were? Because people were starting to realize things. Okay. Stephen Semple: So, Malcolm McLean grew up in Northern California and he had started a trucking business in the 1930s, and he began with a single-use truck that he eventually built into McLean Trucking, and it was one of the largest trucking companies in America. So, he was already a successful trucker. And basically, there’s a famous story dating back to 1937 where McLean was delivering cotton bales on a New Jersey pier, and he spent hours waiting while dock workers were unloading cargo piece by piece. And this was simply how shipping worked. Truck arrived at the dock, cargo is unloaded, cargo went into the warehouse or onto the dock. Later, it was moved on the pallets. It was hoisted aboard a ship, removed from the pallets, stowed in the hole. And at the destination, the entire process happened again in reverse. Dave Young: Back into warehouses where later, you could put it on trucks and send it on its merry way. Stephen Semple: Right. So, McLean asked himself this question, “Why are we unloading the truck at all?” Dave Young: Why aren’t we...
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