The Box that Changed the World

The political showdown over a Dubai company's plan to operate terminals at six American ports briefly focused public attention on one of the most significant, yet least noticed, economic developments of the last few decades: the transformation of international shipping.

Just as the computer revolutionized the flow of information, the shipping container revolutionized the flow of goods. As generic as the 1's and 0's of computer code, a container can hold just about anything, from coffee beans to cellphone components. By sharply cutting costs and enhancing reliability, container-based shipping enormously increased the volume of international trade and made complex supply chains possible.

"Low transport costs help make it economically sensible for a factory in China to produce Barbie dolls with Japanese hair, Taiwanese plastics and American colorants, and ship them off to eager girls all over the world," writes Marc Levinson in the new book The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (Princeton University Press).

My column barely mentions one important part of the story--the regulatory environment. At first, containerization grew through cracks in the rigid regulatory structure of the 1960s. But today's fully integrated systems became possible only after trucking and rail were deregulated in the 1970s and maritime rates were deregulated (to very little fanfare) in 1984. Assumptions about transportation regulation have changed so radically that reading about the bad old days seems like science fiction.

As Levinson said in our interview, "Nobody even remembers what the Interstate Commerce Commission used to do. But you�ve probably been in the old ICC building on Constitution Avenue in Washington. It had a choice spot in Washington. Important agency, important location, big building. This was a key federal agency. And it spent its time hearing arguments about whether this truck line ought to be able to carry cigarettes in the same trucks as it carried textiles or whether the rates that were being charged to carry pretzels were adequate. People have trouble remembering that today."

Levinson's book is terrific--smart, well-written, and thoroughly researched. I highly recommend it. You can read the first chapter and watch an interview with Levinson on the book's Princeton University Press webpage.

My column was supposed to end with the following note, but editors higher in the chain of command than my boss nixed it:

This column, which marks my sixth anniversary in this space, will be my last. I am taking up a new assignment, writing a column on commerce and culture for The Atlantic, but will remain a devoted reader of Economic Scene.