1956 – Packaged
Often one simple story can provide the ideal entry point into a larger topic. For example, among the many issues I have discussed with Australian management students and executives, doing business in Japan is one of the more popular. The reasons are simple. Despite all the changes taking place around us, Japan is still an affluent market, and consumers have a real interest in Australian products. However, exporting there isn’t easy, as one farmer found out 30 years ago.
Most countries have a number of regulations surrounding the import of foodstuffs, especially uncooked meat and produce. It would be fair to say that during the 1980s Japan had surrounded itself with a thicket of rules and requirements, the effect of which was to make importing various fresh food items almost impossible. It was Norman Mailer penned the great line ‘Tough Guys Don’t Dance’, the title of one of his more amazing books about crime and its rather unsavoury narrator, Tim Madden. Well, Australian exporters don’t stop dancing! A Victorian grower battled away, reading all the way through the regulations and discovered that the rules did not seem to cover asparagus. It had to do with the fact that asparagus is an unusual plant, and it is not the fruit, but the stalk that is eaten (it is close to, but not in the same family, the onion and garlic). With prolific crops in Victoria, in Mildura, and also Koo Wee Rup, the grower realised his asparagus could slip through that set of Japanese import requirements and barriers.
Rather than wasting time on letters, he booked on a Qantas flight to Tokyo, taking some samples of his best asparagus, a collection of tender shoots kept cool for the journey. Once there, the response was amazing: no-one was interested! Potential retailer after potential retailer took one look at his samples and shook their heads. Eventually, he learned he had missed a critical issue in the market: each asparagus shoot should be exactly the same length, circumference and colour as every other one. Taste was one thing, but appearance was critical.
If you have been shopping for fruit or vegetables in Japan you will know what I mean. Entering an upscale grocery store, the produce area is rather amazing. Many varieties of fruit or vegetable are treated like aesthetic objects, beautiful presented, and overwhelmingly consistent in shape, size and colour. Down in the basement level food halls of the major department stores, a single honeydew mellow can cost $Au200; well, that was the case when I was last there. Of course, there are cheaper shops for produce, but that desire for uniform presentation remains.
His lesson learnt; the grower’s next samples were visually perfect. Well done, you’d think, but samples are easy, bulk delivery needs more. To achieve the required consistency, machines had to be built to safely sort asparagus stalks. Packing was needed, and Jet Pak was launched alongside the business, a company established to wrap and deliver fresh asparagus to Japan, by air every day, Qantas the airline. However, this is not the same attractive business as it is for melons: while prices vary considerably, 4 oz of asparagus usually sell for about $3.00.
I used to tell this story because I was impressed by our grower’s determination. Today, I would suggest the real story was about packaging. Not just in Japan, but in most businesses, the focus is on consistency, easy presentation, and uniform appearance. In selling, to Japan or anywhere else, product variation can be a problem. Looking around your local supermarket, you’ll quickly notice that much of the fresh produce is distinguished by consistency – whether it is apples, oranges or cauliflowers, they all seem to end up looking rather similar. The clue to this can be found by looking at the apples. Apples are packaged for transport in boxes, Each layer has apples sitting on recycled carboard sheets, one to each dimple: there’s no room for larger apples, and the little ones would roll around and bruise. The result: consistent apples for sale: good for the grower, no damaged crop, and good for the customer – well, I’m not sure about that!
I know it appears a trite remark, but businesses likes things that can be packaged. I don’t just mean wrapped up, but rather products, services and even consumers all sorted into uniform shapes, with known characteristics, easy to manage. Except for the very affluent, our choices are limited and carefully curated. Of course, that wasn’t mean to be the story of late 20th Century capitalism. Milton Friedman had offered a very different image:
“the central feature of the market organization of economic activity is that it prevents one person from interfering with another in respect of most of his activities. The consumer is protected from coercion by the seller because of the presence of other sellers with whom he can deal. The seller is protected from coercion by the consumer because of other consumers to whom he can sell … Indeed, a major source of objection to a free economy is precisely that it does this task so well. It gives people what they want instead of what a particular group thinks they ought to want. The great advantage of the market is that it permits wide diversity. In political terms, it’s a system of proportional representation. Each man can vote, as it were, for the colour of tie he wants and get it; he does not have to see what colour the majority want and then, if he is in the minority, submit.” [i]
I often wonder if Friedman ever went shopping. Do you think he would drop into a store to buy some fruit and vegetables on his way home? Can you imagine him going into a department store to buy a new necktie? In my vivid imagination, I see him asking for a purple tie. “On, no sir, purple is so unfashionable. How about this exquisite silk design? Teal is very up to the minute, the latest thing!” Of course, Friedman could afford to have a supplier make a purple necktie, just for him. That isn’t quite the same as any person seeking the colour of tie they want and being able to get it. Shopping, we have to face market realities: leaving aside the very rich, the rest of us choose from what is offered, but not necessarily what we might want.
Long before business sought uniformity, consistency and simplified packaging, goods were treated differently. Imagine you are standing on the quayside at a 19th Century cargo-handling port. One of the delights would be to watch a ship being unloaded. Derricks would reach deep into the holds and lift up an impressive mixture of goods. Here’s cargo ship that arrived from India, and out come bundles of silks, tea chests with spices, sets of elaborately carved tables and chairs, and an elephant. An elephant! Yes, even livestock, just as John Masefield had put it so well in describing a boat from Nineveh, with “a cargo of ivory, and apes and peacocks, sandalwood, cedarwood, and sweet white wine.” Little packaging, and lots of variety.
John Masefield was nostalgic. He was writing at the beginning of the 20th Century, but variety had already been overtaken. An article in Wikipedia tells us that by the middle of the 19th Century, packaging was making inroads. Railways in several continents were carrying goods in containers that could be transferred to trucks, trays and boats. Like tea-chests, “simple rectangular timber boxes, four to a truck, they were used to convey coal from the Lancashire collieries to Liverpool, where they were transferred to horse-drawn carts by crane.” [ii] Once started, the convenience of uniform wooden boxes drove developments in transportation: by the 1930s standardised boxes were in use all over Europe on trains and trucks, most with a steel frame and wooden walls, floor, roof and doors.
The area was ripe for innovation, but only after the regulators. A European international standard for containers had been established by the International Bureau for Containers and Intermodal Transport (and they didn’t even have a European Community at that stage!). However, American containers were not standardized, and anyway early containers were not yet stackable – neither in the U.S. nor Europe. Then the innovations began. The first step in change and standardization came from that demanding user the US military, which developed the “Transporter”, a rigid, corrugated steel container, able to carry 9,000 pounds (4,100 kg) of goods. It was 8½ ft long, just over 6 ft wide, and nearly 7 ft high, with double doors on one end, mounted on skids, lifting rings on the top four corners. These were first used successfully in Korea, and based on that experience the Transporter was modified to become the Container Express (CONEX) box system in late 1952.
The next major step took place in the private sector in 1956, although it is unlikely anyone could have realised how important it was, nor what would be the consequences. In 1955 Malcolm McLean had bought the Pan-Atlantic Steamship Company, later renamed Sea-Land, to set up a container shipping enterprise. That year the containers were CONEX boxes. However McLean met and hired an engineer at the container supplier’s offices, and appointed him vice-president of engineering and research. His task was to develop a new container, much longer at 35 feet, and both wider and higher (8 ft x 8 ½ ft). Why that major increase in length? Such are the drivers of change, that length was chosen on the basis it was the maximum length of trailers allowed on Pennsylvanian highways in 1955! First used in 1956, these new containers had a frame with eight corner castings that could withstand stacked loads; a handling systems for the containers; and a ‘twistlock’ mechanism that connected with each container’s corner castings.
I wonder whether Malcolm McLean had any sense of the impact he was going to have on the transportation industry. Over sixty years, there have been few modifications to the container design that Sea-Land launched in 1956. Many standard containers are still 8-foot wide by 8 ½ ft high, although taller “hi-cube” units, measuring 9 ½ feet high, have become common in recent years; by the end of 2013, high-cube 40 ft containers represented 50% of the world’s fleet. Since we are drowning in figures, I might add container stock is measured in TEUs, ‘Twenty-foot Equivalent Units’. Why is the standard unit twenty feet long? No idea! However, as Sea-Land’s system became established, around 90% of the world’s containers today are either 20-foot or 40-foot long, except in the United States and Canada, both of which countries also use longer units, 45 ft, 48 ft and even 53 ft long. Yes, America is, as usual, determined to be bigger than everyone else, and, as a result, equally determined to make measuring stock by TEUs difficult!
I’m sure you’ve seen photographs of containers stacked high on ships. The relevant international standard only covers nine-high stacking, and only for containers within weight limits. However, some so-called ‘Ultra large’ container vessels stack them ten or eleven high. There’s another change, too. Many ships no longer use separate stacks in their holds, with another stack above the deck. Instead they maximize their capacity by stacking continuously from the bottom of the hull, to as much as twenty-one units high. All this requires computer driven planning, to ensure the heaviest containers are kept at the bottom of the stack, and light ones on top, not just to stabilize the ship, but also to prevent overloading and possibly collapsing those at the bottom. The push for standardisation has also affected aircraft holds. On an airport apron you’ll notice most airlines use carefully shaped receptacles, designed for aircraft holds with minimally wasted space, especially those for holding suitcases. I’m sure you’ve seen how the cases are thrown in!
Before containers, longshoremen were responsible for ‘stuffing’ (loading) and ‘stripping’ (unloading) cargo holds. It was a skill, judging shapes and weights, ensuring each hold was as full as possible, while also ensuring goods could be unloaded at each port without disturbing the rest. With containers, many of these skills became irrelevant. Container loading is computer controlled, longshoremen needing little more skill than box-packers at an Amazon warehouse.
That was on the outside. Packing the inside of containers is another issue, and another pressure to uniformity. Containers gave a boost to the use of goods on pallets, given their smooth floor, and easy packing. Most pallets are made of wood, and those, of course, are a standard size too, (48×40 inches). That works well for shipping, but there are other pallet sizes. Most companies shipping overseas use standard pallets as often as they can, as these have led to specifications for fork-lifts and doorways. It’s not just pallets, boxes are increasingly uniform too, for everything from supermarket fruit boxes to delivery boxes from Amazon. Today, the product has to fit in the box, rather than the box suit the product. If I order a book from Amazon, it will come in one of their standard boxes, and, if it is small, it might only occupy 10% of the space, the rest taken up with voluminous (and wasteful) plastic packing. Yes, McLean changed our world in 1956.
Sadly there is one final consequence of containers: their use in packaging people. On many occasions, illegal immigrants have been packed into a container to be smuggled into a country. In October last year, UK police reported: “Shortly before 1:40 a.m. today, we received reports that a number of people had been found inside a lorry’s container at the Waterglade Industrial Park on Eastern Avenue in Grays. We believe the lorry is from Bulgaria and came into the U.K. through Holyhead on the 19th of October. Emergency services attended, but sadly, all 39 people inside the container had died.” [iii] Dreadful to report, but episodes of people dying in a tightly sealed containers have been reported many times: among the worst, 58 Chinese immigrants were found suffocated in a truck in Dover in 2000, and 71 dead migrants from the Middle East and Afghanistan were found in a truck in Austria in 2015.
Containers are a familiar part of our lives. I have loaded my home into a container more than once, and I will be doing it again. It is more than just convenient to send books, furniture, paintings and kitchen goods safely packed. I worry just a little that a container might get lost, as they have fallen off ships in storms: Insurance can’t cover sentimental value I have read about containers turned into accommodation, with varying degrees of success. But containers as packaged people movers? It makes me deeply upset to realise that desperate refugees find this their only way to reach for a better life, and even more upset to think of those who died in doing so. Malcolm McLean would be saddened, too.
[i] Milton Friedman, Capitalism and Freedom, Chicago UP, page 15 of the 2002 edition
[ii] Essery, Rowland and Steel, British Goods Wagons from 1887 to the Present Day, Kelly: New York, 1979, page 92. Thank you, Wikipedia!
[iii] https://www.nytimes.com/2019/10/23/world/europe/bodies-found-truck-essex.html
