Sunday, July 08, 2007

A Book on the Box

I just finished reading The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger by Marc Levinson. It's a history of the shipping container with a focus on all of the changes that it caused or enabled.

Aside from being a great read, the book also provides a number of examples of basic economic theory in action.

There is a discussion of shipping conferences - cartels of ship lines that set prices, allocated market shares and ensured everyone made a profit. A entire chapter is dedicated to economies of scale - how the smaller ships and ports lost out to a few really large ports based on inland transportation access.

Another section looks at the effects on manufacturing. With much lower shipping costs and times, plants no longer needed to be located close to ports resulting in an exodus from the port cities. Once manufacturers figured out how to make the most efficient use of containerization, we got Just In Time and huge inventory reductions. We also got the rise in the disciplines of supply management and corporate logistics.

Intended to mark the 50th anniversary of the shipping container, it's also a great book on economics. Then again, it's written by an economist.

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