“The Father of containerization,” Malcolm P. McLean revolutionized the shipping industry during the 1950s and 1960s and his innovation help increase trade between the United States and China. His big idea: an independent box container (trailer) placed in a truck bed on wheels. These standardized containers were removable from trucks and stackable on barges and provided for more goods to be shipped at cheaper prices. Throughout his entrepreneurial career, McLean adapted to and overcame government regulations.
A farm boy from Maxton, North Carolina, a town in Robeson County, William P. McLean assumed extra work to supplement the family income. After graduating from high school, McLean entered the workforce in the midst of the Great Depression.
The Robeson countian transformed his McLean Trucking from a one-truck, shoestring operation in 1934 into the largest trucking firm in the Southeast and fifth largest in the United States. Like some other Depression businesses, including North Carolina Mutual Life, McLean Trucking grew during lean financial times by cutting costs and its management thinking innovatively. (It was during the Depression that McLean first had the idea for container shipping.) By the 1950s, McLean Trucking consisted of approximately 1,800 trucks shipping products to 37 terminals.
Government regulation prompted McLean to execute his idea for container shipping. Different states had different weight regulations, and truckers were fined frequently for carrying overweight shipments. (This cost no doubt was passed on to the consumer). So, McLean started implementing his idea for container shipping. He purchased Pan-Atlantic Steamship Company so that trucks, with his newly designed and stackable trailers (containers), could transport goods to ports. There, the containers would be hauled by barges to other ports, and be removed and placed onto truck trailer beds and be hauled to warehouses.
Government regulation, once again, forced McLean to adapt. McLean sold his trucking company because seven railroads accused him of violating the Interstate Commerce Act, for he needed ICC’s approval for ownership of two or more carriers with a common interest. After failing to acquire the government agency’s approval, McLean did what many would never do: he sold his interest (75 percent) in McLean Trucking to embark on a risky economic venture. He changed Pan-Atlantic’s name to SeaLand Industries.
Under McLean’s helm, SeaLand Industries grew to be the world’s largest cargo-shipping business. After Ideal X’s maiden voyage, which proved that containers transported goods safely, clients were readily available. With McLean’s encouragement and persuasion, ports started building container-ship compatible facilities; Oakland, for one, attracted Asian trade by building a container-ship facility. When trade authorities recognized that container-friendly ports adapted to the changes in the shipping industry, they started building container-shipping facilities. SeaLand Industries grew exponentially while increasing global trade. because McLean insisted on standardized containers and shipping process.
For $160 million, R.J. Reynolds purchased SeaLand Industries in 1969. According to Anthony J. Mayo and Nitin Nohria in In Their Time: The Greatest Business Leaders of the Twentieth Century, McLean had revolutionized an industry, and by the end of the 1900s, “container shipping was transporting approximately 90 percent of the world’s trade cargo.”
Anthony J. Mayo and Nitin Nohria, In Their Time: The Greatest Business Leaders of the Twentieth Century (Cambridge: 2005) and "The Truck Driver Who Reinvented Shipping," Harvard Business School, http://hbswk.hbs.edu/item/5026.html (accessed December 9, 2009).
See Also:Related Categories: Entrepreneurship, Business and Industry