Tune in to understand why Bill Gates chose The Box as one of his top picks in 2013. 

ANDY CROWE ● BILL YATES ● NICK WALKER ● MARC LEVINSON

NICK WALKER:  Welcome to Manage This, the podcast by project managers for project managers.  This is our roundtable discussion about what matters most to you, whether you’re a professional project manager or working toward being certified.  We want to be a spark to light your imaginative fire and give you some perspective and encouragement.  And we do that by drawing on the experience of others who are knee deep, and sometimes deeper, in the world of project management.

I’m your host, Nick Walker, and with me are the experts at this table, Andy Crowe and Bill Yates.  And Andy, we’re going to hear from a very special guest today.

ANDY CROWE:  We’ve got a great guest this morning.  Marc Levinson’s joining us.  He’s the author of several books, and a really well-known person in the nonfiction world.

NICK WALKER:  Dr. Marc Levinson is an economist.  He’s an expert in international trade and globalization, international finance and finance regulation.  He’s written for, among others, Time magazine, Newsweek, Harvard Business Review, the Daily Journal of Commerce in New York, and The Economist in London.  And he’s advised Congress on transportation and industry issues.  He’s a consultant and an author of six books.  Marc, welcome to Manage This.

MARC LEVINSON:  Well, thank you very much.  I’m delighted to be with you.

NICK WALKER:  Now, Marc, we’re here in Georgia.  And you have a little bit of a Georgia connection, as well.

MARC LEVINSON:  I lived in Atlanta for a number of years in the 1970s and early ’80s.  I am a proud alumnus of Georgia State University’s Graduate School.  And so, yes, I do have fond memories of Georgia.

ANDY CROWE:  Marc, I’ve got to ask – this is Andy.  What part of town did you live in?

MARC LEVINSON:  I lived for a while in Druid Hills and then in Grant Park.

ANDY CROWE:  Excellent, excellent.  And my wife also joins you as having done her graduate work at Georgia State.  So got a connection there.

NICK WALKER:  All right.

MARC LEVINSON:  Very good.

NICK WALKER:  One of your most fascinating books is titled “The Box:  How the Shipping Container Made the World Smaller and the World Economy Bigger.”  Now, Marc, I have to admit that for years when I lived in Seattle I would drive by the port and see the loading and the unloading of the container ships.  But not once did I ever think, how does this method of transporting goods affect me?  I think maybe we take for granted something that’s really changed the life of every person who’s bought something manufactured outside this country.

MARC LEVINSON:  The shipping container seems like a very mundane product.  It doesn’t seem like anything that particularly needed to be invented or developed.  But in fact, up until the 1950s, it didn’t exist.  And there was a prolonged period of developing containerization, developing standards so that a container could be sent around the world, and then of businesses changing their practices so that they could take advantage of the container.  So the container had very substantial effects on international trade.  It made globalization possible.  And my book is really the story of how this happened.

ANDY CROWE:  Marc, this is interesting for me.  This is Andy.  And as I look at this and think about it, I’ve worked in the supply chain world, supply chain logistics.  I’ve done projects, I’ve managed projects for companies that provide this service for large shipping companies.  And it is something we take for granted.  So project managers have to interface with this kind of world a lot, with cartons and containers, cases – cases in, cartons out, all of it going on shipping containers.  Tell us what the world was like before that.

MARC LEVINSON:  Sure.  Before the shipping container was developed, most goods were shipped internationally in a form that was referred to as “break bulk.”  And break bulk is exactly what it sounds like, small pieces of things.  If you would go to a dock, would have gone to a dock in the 1950s, you would have seen bags of products, and you would have seen barrels of products, and you would have seen wooden crates, and you would have seen drums, and all kinds of different things.

And each of these items separately would have come in on a truck or a train.  It would have been put into a warehouse alongside the dock; would have been taken out of the warehouse, brought onto the dock; would have been put with two or three other items onto a pallet.  The pallet would have been lifted into the hold of a ship.  Each of the items would have been taken off the pallet and stored in the hold of the ship.  And then at the other end of the voyage this process would have been repeated.

A typical ship in those days, and those were pretty small ships by modern standards, but a typical ship sailing the Atlantic in those days might have carried 200,000 separate items.  And each of those items had to be handled repeatedly.  So shipping was a very labor-intensive process.  It could take a week or two to unload and reload a ship.  A ship spent as much time in port being loaded and unloaded as they did at sea, and a lot of cargo was delayed.  So because of this, it was actually impossible to have what we think of as a modern supply chain.  You shipped your cargo, and it got to the destination when it got there.  You couldn’t plan on it.  And you couldn’t organize your production around it.  And that’s what the container changed.

ANDY CROWE:  You know, Marc, when you look at this, and when you think about some of the innovations in supply chain management, Japanese management, which really was coming into fruition around the same time, it’d be interesting to know how they influenced each other.  I don’t know if we have a lot of insight into that.  But Japanese management came up with this idea of just-in-time, or JIT.  And just-in-time management, of course, means the inventory arrives at the last responsible moment.

So you keep very low inventories.  They get there right at the last minute.  And then it puts a focus on quality because there’s not a lot of parts to waste.  There’s not a lot of inventory.  If you mess up this particular part, you’re going to have to wait for another one.  And it builds, it really focuses on building these close relationships with suppliers.  So the interesting thing about this, I feel like just-in-time management really couldn’t have evolved properly without this innovation.  Do you agree with that?

MARC LEVINSON:  Yes.  Now, just-in-time management began in Japan.  And it could begin without the container because it involved local shipping, from one nearby plant to another nearby plant.  But if you go back to the 1980s, you recall that the Japanese manufacturers, auto manufacturers, extended just-in-time shipping across the Pacific; okay?  They were producing parts, engines, transmissions and other components in Japan.  And they were delivering them to assembly plants here in the United States on a predictable schedule.  That could not have happened without the shipping container.

So the container made what we think of as the modern global supply chains possible.  It made it possible to ship in very large volume at low cost.  And it made it possible to have a reasonable assurance that what you were shipping would get where it was supposed to be at a particular time.  That really was not possible before the container.

BILL YATES:  Marc, this is Bill.  There are so many concepts that are just intriguing to me as you tell this story in “The Box.”  And certainly probably the key character is Malcom McLean.  And when I look at – when I’m reading this story about this character and this entrepreneur, one word just keeps popping up to me, and that word is “disruptive.”  This, you know, as you describe from the beginning, the box is simple; right?  It’s a 40-foot container.  It’s a box.

But taking that technology, that simple technology into this industry was so disruptive, you know, I think of the impacts that you talk about in the book to the longshoremen, the governments, the industry and what their expectations were, and even fast-forwarding to the ICC.  And I look at this idea of being disruptive, and it’s something that we as project managers have to deal with, with every project that we do.  The project creates something new.  It’s maybe a new technology or new service.  And it’s disruptive.

So I’m just curious what, you know, when you reflect back on the story and the research that you did regarding “The Box,” what advice do you have from either actions that McLean and his team took that we can parlay over to project management as to, you know, how do we handle the disruptive nature of this technology and what we do with it?

MARC LEVINSON:  Well, the first thing I would say is that people have attributed a lot of foresight to Malcom McLean retrospectively.

BILL YATES:  Right.

MARC LEVINSON:  And this is mostly misplaced; okay?  Malcom McLean did not set out to create a globalized economy.

BILL YATES:  Right.

MARC LEVINSON:  Malcom McLean ran a trucking company.  And he set out to increase his profits.  His concern was that he was running trucks up and down the East Coast, and the highways were getting increasingly congested.  This was in the days before interstate highways.  And so his original idea was to buy a ship and send trucks up and down the coast on the ship, rather than over the road, in order to avoid highway congestion; okay?  That doesn’t sound very dramatic.  And then, as this concept developed, he took one action after another, each of them intended to make money in the transportation business.  And so the modern intermodal freight transportation industry developed out of this.

But Malcom McLean wasn’t sitting there with a master plan of how he was going to reshape the world economy.