The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (14 page)

Marine construction and ship repair employed thousands more. Add in the lawyers, bankers, and insurance brokers who serviced the shipping business, and the livelihoods of half a million workers may have depended directly on the port. The area near Bowling Green, in lower Manhattan, was thick with shipping company offices, served by the insurers a few blocks away on John Street. Brooklyn, the most populous borough, had less shipping-related office work but more waterfront employment, with 13 percent of all jobs in the borough located directly on the docks.
⁶

T
ABLE
3
Port-Related Employment in New York City, 1951

This powerful economic engine was already beginning to miss a few strokes in the years after World War II. Its location had helped the Port of New York gain market share during the war, as the re fineries and military terminals in Brooklyn and along the New Jersey waterfront dispatched thousands of ships across the North Atlantic. In 1944, when it moved nearly one-third of all U.S. waterborne exports, New York handled twice as much cargo as in 1928 and five times as much as in the worst Depression year, 1933. Even during the war, though, experts were warning of the parlous state of the docks. Those warnings seemed to be confirmed after the war, as cargo traffic slumped owing to the lack of imports from a prostrate Europe. Although European recovery briefly boosted exports, the Korean War put the U.S. economy back on a war footing and devastated foreign trade. The total value of imports and exports at all U.S. ports sank from $18.5 billion in 1951 to $15.6 billion three years later, with exports hit particularly hard as factories switched production from consumer goods to war matériel.
⁷

New York was losing the battle for that export traffic. World War II had stimulated economic growth in the West and the South, and factories in Dallas and Los Angeles were much less likely to ship through the Port of New York than were plants in Rochester and Cleveland. The impending opening of the St. Lawrence Seaway in 1956 would permit direct steamship traffic between Great Lakes ports and Europe, with one forecast predicting that it would divert 8 percent of New York’s exports and 3 percent of its imports by 1965.
⁸

High land freight rates were a further handicap. New York officials were prone to complain that the railroads unfairly favored Philadelphia, Baltimore, or Norfolk, but the truth was that railroads and truckers could serve those points at lower cost; railcars could reach the piers without being floated across the harbor, and truckers faced much less congestion. New York’s rate disadvantage was even larger for truck freight than for rail freight, as sending a load by truck from Cleveland to the New York docks could cost four dollars more per ton than sending it to Baltimore. Truckers frequently sought to add the cost of New York port delays to customers’ bills, charging sixty to eighty cents per ton more to deliver to the piers than to other Manhattan locations and generating a flood of complaints to the Federal Maritime Board.
⁹

Many of the port’s other problems, however, were of its own making. After three decades of labor peace from 1915 to 1945, labor turmoil became routine after the war. Some or all of the docks were closed by strikes in 1945, 1947, 1948, 1951, and 1954. Between 1945 and 1955 the International Longshoremen’s Association, the legally recognized union throughout the port, battled with the Communist-backed National Maritime Union and with the American Federation of Labor, which ejected the ILA on corruption charges in 1953 and then set up a new American Federation of Longshoremen in an effort to supplant it. With the demise of public loaders, the Teamsters union sought to claim the right to load and unload trucks on the piers, precipitating violent clashes between Teamsters and Longshoremen in 1954. Wildcat strikes on individual piers were common until the ILA, abetted by shipping interests that preferred one corrupt but reliable bargaining partner to constant conflict among competing unions, won a series of elections and regained control late in the decade. Throughout the 1950s, the high risk of labor disruption encouraged shippers to use other ports.
¹⁰

Crime drove shippers away from New York as well. Cargo theft was rampant; most goods were packaged in small boxes or crates, so stealing wristwatches, liquor, or almost anything else was not particularly difficult. The bistate Waterfront Commission, created in 1953 after urgings from New York governor Thomas E. Dewey, made inroads against racketeering by banning public loaders and taking control of pier hiring. It deliberately sought to reduce the workforce and thereby raise longshoremen’s incomes in hopes that they would have less need to steal. Even after the Waterfront Com mission barred 670 ex-convicts from longshore jobs, though, one in five longshoremen had a criminal record. Cargo theft remained a massive problem—so much so that both the Port Authority and the City of New York refused to cooperate with the filming of a comedy starring James Cagney lest the title,
Never Steal Anything Small
, give moviegoers the wrong impression.
¹¹

And if land-transport costs, labor concerns, and crime were not enough to deter businesses from shipping through New York, there were the port’s decrepit facilities. The East River pier at Roosevelt Street dated to the 1870s, the Hudson pier at West Twenty-sixth Street to 1882. The city-owned pier at Christopher Street had been built in 1876. These piers, and dozens like them, were narrow fingers protruding into the harbor, designed for the days when ships would turn ninety degrees from the channel, point their bows to ward the shore, and tie up to the dock for days on end. Some piers were not even wide enough for a large truck to turn around. For the privilege of leasing one of these obsolete facilities, ship lines paid between $0.96 and $2.00 per square foot per year, three to six times the going rate in other East Coast ports. The city had launched a program to renovate and fireproof its piers in 1947, but officials judged the cost of building new piers to be prohibitive. Many piers were literally collapsing into the water. Abandoned pilings and floating debris from fallen piers were obstacles to navigation as well as an eyesore. “By 1980, it will be hard to find space in a whaling museum for piers that met the requirements of 1870 and were condemned as obsolete as long ago as 1920,” Port Authority executive director Austin E. Tobin commented in 1954.
¹²

Despite its name, the Port of New York Authority was a latecomer to maritime affairs. The major activity of the bistate agency since its founding in 1921 had been building and operating bridges and tunnels; after its early efforts to rationalize the tangle of rail lines and terminals in the New York region were beaten back by the rail roads, the Port Authority retreated from involvement in freight transportation.
¹³
But, as political scientists Wallace S. Sayre and Herbert Kaufman noted in 1960, the independence and broad political support enjoyed by New York’s public authorities, including the Port Authority, encouraged them to “seek out new outlets for their energies.” In the 1940s, the governors of both New York and New Jersey asked the agency to get involved with shipping, for entirely different reasons. New York governor Dewey thought that the Port Authority might be able to push organized crime off the docks. New Jersey governor Walter Edge wanted it to develop piers on the New Jersey side of the harbor. Tobin and Port Authority chairman Howard Cullman jumped at the opportunity, calculating that taking on some port projects could build support for the Port Authority’s expansion into the business they most wanted it to enter: airports.
¹⁴

In 1947, the New York World Trade Corporation, a new state authority backed by key business leaders, proposed to take over all of the city’s docks and later to acquire all private docks and waterfront warehouses as well. New York mayor William O’Dwyer rejected the plan and asked the Port Authority to look at the city’s piers. After a three-month study, the Port Authority offered to sell $114 million of revenue bonds and build thirteen new steamship berths, four rail road carfloat terminals, and a 1.5-million-square-foot produce terminal, while paying the city $5 million per year in rent. This would have been no small undertaking: the amount involved, the equivalent of almost $900 million in 2004 consumer prices, was more than the city had spent on its docks over decades. The proposal quickly encountered heavy fire. The ILA was opposed. So was the city’s Department of Marine and Aviation, which ran the docks; it had waged a bitter and unsuccessful battle to keep the Port Authority from taking over the city’s two main airports in 1947, and it did not want to give up another of its functions. Most of all, city politicians did not want the Port Authority on their turf. City officialdom was convinced that the piers were a potential gold mine, not a badly outdated piece of infrastructure. As Robert F. Wagner, then Manhattan borough president and a member of the city’s governing Board of Estimate, asked later, “The piers were making money; why didn’t they take over the sanitation department instead?” The Board of Estimate rejected the Port Authority’s offer in 1948 and turned down a revised proposal in 1949.
¹⁵

While New York officials thought they could modernize the city’s piers without the Port Authority’s involvement, the financially troubled city of Newark, New Jersey, had no such illusions. Its money-losing municipal docks were in a state of physical collapse. Newark agreed to lease its docks (and its airport) to the Port Authority late in 1947. Between 1948 and 1952 the agency spent $11 million to dredge channels and rebuild wharves. It then announced construction of the biggest terminal yet on the New Jersey side, designed for the Waterman Steamship Company, which would be moving across the harbor from Brooklyn. The Waterman terminal would have a fifteen-hundred-foot wharf running parallel to the shore for faster docking and easier loading—a feature no New York City pier could match. Watching the construction in Newark and the defection of a major steamship operator, New York’s city controller suggested that perhaps the city should give up its docks after all. “For some time the Port Authority dock control plans have looked good to us,” editorialized the
New York World-Telegram.
“Continued rejection can mean only that the city wants to hang on to waterfront control for political purposes.” A Port Authority spokesman declared that the agency was not inclined to begin negotiations with New York City again.
¹⁶

Late in 1953, as the Waterman terminal neared completion, the Port Authority first heard of McLean Trucking’s desire to build a terminal on New York Harbor. A trucking company was an odd candidate to lease prime waterfront land, and its plan to drive trucks aboard ships was even odder. The timing, however, could not have been better. Port Authority officials were eager to draw additional business to build upon Port Newark’s success, and the agency was uniquely positioned to serve McLean Trucking’s needs. On the Newark waterfront it could offer space to marshal trucks, nearby rail lines, and easy connections to the newly built New Jersey Turnpike. Thanks to its ability to issue revenue bonds, the Port Authority had the means to finance any new facilities that would be required. All of these were advantages that New York City could not match. Malcom McLean and A. Lyle King, the agency’s director of marine terminals, quickly struck a deal.
¹⁷

The Port Authority proceeded to exercise its new waterfront muscle. After signing McLean, it proposed to build a terminal for rubber importers at Port Newark—a terminal whose prospective tenants would relocate from cramped quarters in Brooklyn. In mid-1955, it finally got a toehold on the New York side of the harbor by purchasing two privately owned miles of Brooklyn waterfront, wharves that it had declined to acquire twice previously but now found politically opportune to buy. Proclaiming its interest in Brooklyn provided cover for another investment in New Jersey: a $9.3 million, four-berth terminal at Newark for Norton Lilly & Co. in November 1955, which led to that ship line’s move from Brooklyn to the New Jersey side of the harbor.
¹⁸

Then came the most aggressive move of all. On December 2, 1955, New Jersey governor Robert Meyner announced that the Port Authority would develop a 450-acre tract of privately owned tidal marsh just south of Port Newark. The new Port Elizabeth, the largest port project ever undertaken in the United States, was planned eventually to accommodate twenty-five oceangoing vessels at once, enabling New Jersey to handle more than one-fourth of all general cargo in the Port of New York. Previously, the Port Authority had shown little interest in Elizabeth’s marshlands. McLean’s idea of putting truck trailers on ships changed that view entirely. Now, port planners foresaw a resurgence of coastal shipping, and the new Port Elizabeth would have ample wharf and upland available for “the proposed use of large shipping containers on specially adapted vessels.” There might not even be a transit shed, the most expensive part of pier construction. The first containership had yet to set sail, but the Port Authority was making clear that the future of container shipping would be in New Jersey, not in New York.
¹⁹