This is kind of a sea story, I guess. In 1984 I’d been working out of Fall River, Mass on a red crab vessel, Taurus, ten day trips to the edge of the continental shelf ranging from Virginia to Maine, deep water, catching red crab at 600 fathoms on 100-trap lines, butchering the crab, icing them, for delivery to a processing plant up by Boston. Red crabs are hard to keep alive in tanks of water, unlike, say, lobsters, or, I am guessing, the Alaskan crab species. We’d fill mesh bags with crab parts, bodies or legs, bathe them in a sulfite mixture for disinfectant, then ice them in the hold. The Taurus was a converted small Navy ship, 180 feet long, a sister ship of the infamous Pueblo, but with the topsides ripped off and changed, a good sea boat, comfortable, and safe, or as safe as a 40 year old ship could be.
Then I had a chance to go to work in New York, and I took the job because it was a challenge, with the Port Authority of New York and New Jersey, to rebuild an abandoned steamship terminal in Brooklyn into some kind of fishing operation. In 1984 New York was the biggest port in North America, landing millions of containers at newer terminals over on the Jersey side, Newark, as well as a terminal on Staten Island and one in Brooklyn. Containers were king, and New York was the center of the action. Remember the movie, “On the Waterfront?” That was about marine labor in the middle nineteen fifties, when containers first appeared, and by the early sixties the 35,000 longshoremen in the city saw their job security disappearing before their eyes, as ships that previously took weeks to unload with gangs of dozens of people could now be unloaded – or the containers carrying all the freight unloaded – in a day or less using huge cranes and far fewer men. There was a huge labor battle over this, and when the dust cleared an agreement had been reached to allow containers to be unloaded by smaller gangs with the proviso that the rest of the displaced longshoremen were guaranteed an annual wage until they died. When I arrived there in 1984 I first heard about “GAI”, costing New York shippers something like $ 100,000,000 a year, which added to the cost of landed containers there, and which, therefore, encouraged other ports along the east coast to enter the business and offer cheaper rates.
By the 1980s manufacturing was already moving to Asia – Japan, mostly, or Korea – although China was starting to roar. By the time I came to New York some west coast ports, led by Seattle, interestingly enough, had started partnering with railroads to ship containers from Asia to the midwest and east coasts, offering faster shipping times than all-water from Asia to the U.S east coast through the Panama Canal, and this really took off when the railroads started placing the containers two-high on specially built cars, doubling the capacity of the trains. It took a few years to raise all the bridges and tunnels to enable the taller trains, but by 1984 much of that was done, enabling cargo shipped from Asia to reach the eastern US weeks earlier than all-water service. This rail innovation started the explosion of the west coast ports. This rail system grew and grew until, today, over 120 trains a week leave west coast ports to the inland United States.
In fact, just as I reached New York, the Port Authority, trying to compete with this new threat, had started their own double-stack service from New York to the interior, and they had sent their first train just the week I arrived there. I recall the excitement and then the bitter disappointment when that first train, made up of containers lashed two-high onto a flatcar, reached its destination with the container contents shaken and damaged, because the flatcar’s springs or whatever they are on rail cars were too rigid and the shaking transit ruined the cargo.
I was there in New York 1984-1990. During that time New York’s share of traffic dropped and dropped as a dozen other ports expanded and stole business; as the number of trains running cross country doubled and doubled again; as ships grew bigger and bigger. The dogma then was all ships had to be narrow enough to transit the Panama Canal, 105 fleet wide or less. There was even an around-the-world container service in operation. However, in 1988, American President Lines – APL -built some container ships that were too wide for the Panama Canal – post-Panamax ships, so-called – ships built expressly for the Asia-US West Coast or Asia -Europe trade. There was even talk, as by this time China was humming and factories seemed to be moving south toward Hong Kong and Viet Nam, of ships running from Singapore west through the Straits of Malacca, the Indian Ocean, the Red Sea, the Suez Canal, the Mediterranean, and the Atlantic Ocean directly to New York and some other U.S east coast ports, ships big enough to carry 5,000 20 foot or 2500 40 foot containers for the trip to work economically. I even remember a meeting in 1987 on the 64th floor of World Trade Center Tower Number One with the Port marketing guys scoffing that such a cargo string or loop would ever happen; that post-Panamax container ships were absurd. Ridiculous, some said. Impossible. A fantasy.
We’ll return to that scoffing later, and those APL ships, the first container ships too wide for the Panama Canal and in 1988 the biggest in the world, over 900 feet long and 120 feet wide.
The fish project at that abandoned Brooklyn facility, Erie Basin, failed, and I ended up working for the Port Department Planning Group planning container expansion facilities, of which I knew at the time nothing. The race was on, every port chasing every other port, fighting to deepen channels, expand acreage, piers, container cranes, all to entice the ever-bigger ships to land and discharge cargo. The mantra was this global enterprise was becoming increasingly efficient and global, the ships bigger and bigger, containers becoming the preferred manner of all consumer goods cargo world-wide. Nobody, as I recall, spoke about all the American factories and jobs that were disappearing. Nobody. Those APL ships at 5,000 TEU, too big for the Panama Canal, were replaced by ships of 6,000 TEU, then 8,000, then 12,000, then 15,000, even 18,000, ships 140 feet wide and 1300 feet long, enormous. And, to handle these ships, harbors were dredged to 40 feet then 50 then 60 then 70. The yards behind the wharves expanded, became larger, and more and more specialized and automated equipment was designed to stack containers higher and higher. Computer systems were expanded to track each container, to keep track of everything going on.
I moved to Seattle in 1990 and for nearly 20 years continued working mainly in the waterfront cargo shipping sector, designing and building container terminals. All those years, until I left the port business in 2012, the drumbeat was for more, bigger, faster. A huge and enormously complex logistics system arose to handle all this cargo, and as the manufacturing of all these consumer items moved to Asia everything depended more and more on a seamless, nonstop supply chain, a mixture of factories, warehouses, truckers, railroads, ships, more warehouses, and server farms of huge size processing all the data, all in the interest of seamless, fast, delivery of goods and products to the American and European consumer, often with the main goal of making everything as cheap as possible. The worldwide volume of containers and the number of container ships exploded.
After I left the port authority sector in 2012, still needing to work, I dusted off my years of sea time as a commercial fisherman in the 1960s-1980s and joined the Sailors Union of the Pacific and went down to the hall, Ordinary Seaman, hoping my card would come up. It eventually did, and I flew to New York, Newark, eyes wide and terrified, to join my first ship, a ship that had for several years been engaged in just that run so scoffed at when I had worked in New York nearly 30 years before – New York to Charleston to Savannah to Norfolk to Damietta Egypt at the Suez Canal to Jebel Ali on the Persian Gulf to Singapore through the Straits of Malacca and return, a 60-70 day round trip, on the very same ship that had been at one time the first post Panamax container ship and the largest on earth, the flagship of its class, the President Truman, now a measly rusty beaten up 5,000 TEU ship at the end of its useful life, a ship with over 175,000 hours on its main engine.
I made a few trips on the Truman and then APL sold her to Indian breakers for scrap and the last trip was one-way, New York to Singapore, where we handed her over to the new owners and flew home. On the way in to Singapore, the summer of 2013, we passed a new Maersk ship of 15,000 TEU with a Discovery TV crew aboard. We passed close alongside, dwarfed in size, once the king of the hill, now a rusty small ship among dozens of others, hardly noticeable. It was a haunting moment, that moment, watching that huge ship ghost by, enormous, just huge. It felt like the passing of an era, and now I think it was.
So when Covid hit, the virus hit a world trade and manufacturing system entirely built upon the container, promising shipments cheap enough to offset manufacturing distance, and offering as well the chance to use the ship itself as a warehouse while the goods were in transit, helping in the dream we could build a just in time efficient system free of inventory and free of excessive costs for spares and backlog parts; build instead a system where everything moved efficiently and inexpensively. Modern computer systems and worldwide banking systems made the data flows seem easy, almost magical, and, again, the view held we had figured all this out, all was well.
But, and take this from someone who first sat in port authority meetings with shipping CEO executives promising all was possible and who then chose to chip rust on the ships carrying the cargo and saw how fragile and difficult it was to keep the flows going, and how vulnerable everything would be if a great shock halted the flow, the imagined efficiency of modern data systems and logistics equipment to deliver goods is only that – imagined.
That ship that ran into the bank in the Suez a few months ago was a harbinger of what is happening now, a sign, a clear warning. One ship blocks one waterway and the world seems to stop.
But now, months on, after Covid has decimated ship’s crews and truck drivers and essential workers, after this hugely complex system has revealed all its many and critical vulnerabilities, it is sinking in to everyone that we have a problem, a huge problem. The price for great efficiency seems to be enormous complexity. The promise of just in time flows and worldwide manufacturing is being seen as flawed, brittle, because of that complexity, yet it will take both time and strong leadership to move manufacturing back closer to the consumer, and eliminate some of the risky and brittle links now being exposed.
President Biden made an announcement the other day that Long Beach and Los Angeles will operate 24 hours a day to relieve congestion, get the Christmas goods to the consumer in time. Leaving aside the lesson about why a good Christmas consuming season should be a measure of national health, Biden’s call was surely political, an effort so he won’t wear whatever bad might happen this Christmas. That is hard for him to do as the President, but it is also useful to know that what he called for, a 24 hour a day operation, is meaningless.. When a ship is at berth it is unloaded around the clock, already a 24 hour a day operation. There are 73 ships more or less waiting to unload outside southern California. I don’t know how many berths are at Los Angeles and Long Beach but surely there are at least 20. Those 73 ships could be discharged in three or four days if there are longshoremen to do it, but that is not the problem, the problem is where do you put the containers once off the ship? Are there truck drivers to take them somewhere and where do they go? How many are supposed to go on trains and how many trains are there? What about all the downstream and upstream cargo flows that have also been stopped, or paused? All those containers shipped to the west coast need to somehow be sent back for loading again, meaning the ships will be carrying air, the voyage a total sunk cost.
All of which to say, this seems to be a system-wide problem, not a political problem, although the rage held by all those workers who saw their jobs sent overseas is real and arguably the most important political issue facing us today. The entire system of a container ship delivery belt enabling one part of the earth to build things and another part to consume things seems to be breaking down, perhaps entirely flawed, and whatever readjustment that must be made will surely be painful and slow.
That first post-Panamax ship I heard about in 1988 and then sailed on 25 years later, the President Truman? She is surely now broken up, melted into steel, and perhaps contained in a much newer ship, perhaps even within one or several of the ships now stranded outside San Pedro.
What I am wondering about, reading about these supply chain issues, and then reading more about how workers are being burnt out forced to work overtime and how it seems many many systems of delivery and handling are coming apart, is whether we have built something so wonderfully efficient and complex that we failed to see that, once broken, it cannot be put back together.
Most of us have heard about Humpty Dumpty, as kids. It feels today as if the entire global supply chain system – send jobs to where cheapest-minimize inventory-worship efficiency and low cost-thrive on a throw-away culture – is the modern manifestation of a nursery rhyme birthed at the dawn of the industrial age at the end of the eighteenth century:
Humpty Dumpty sat of a wall,
Humpty Dumpty had a great fall
All the king’s horses and all the king’s men
Couldn’t put Humpty together again
Posted in Sea Stories and tagged APL, cargo, complexity, containers, JIT, just in time, shippers, shipping, supply chain, systems, trade by Charles Sheldon with 4 comments.