99% Invisible - 254- Containers

Episode Date: April 4, 2017

We’re based in beautiful downtown Oakland, CA which is a port city in the San Francisco Bay. Massive container ships travel across the Pacific and end up here. From miles away you can see the enormous white cranes that pull … Continue reading →

This is 99% invisible. I'm Roman Mars. We're based in beautiful downtown Oakland, California, which is a port city on the San Francisco Bay. Massive container ships travel across the Pacific and end up here. From miles away, you can see the enormous white cranes that pull giant, uniformly sized metal boxes off the ships. People say the cranes are the inspiration for the adat walkers and the Empire Strikes Back, but that's not true. It's just a good story to tell

when you pass by on the bridge. The port of Oakland and its container ships have always captured my imagination, and it turns out they also captured the imagination of my colleague and friend Alexis Madrigal. I went out, I visited a ship that was docked in Oakland, and when I went out on the ship, I walked into this room that was all wood-paneled

and this kind of old Romanian captain walks in with his marble reds and he sits him down on the table and he looks right in my eyes and he goes, what is your intent? And I was just gladotters in love, like from this love it first sight. I was just like, no one ever hears these voices. They're so amazing. So there's kind of two head people on a ship.

One is the captain, the other is the chief engineer down in the engine room. And so we, you know, we looked at bridge and we went back to that wood paneled room. And the chief engineer comes in another Romanian dude and he goes You visited the head of the ship and he taps his chest Now visit the heart He takes us down into the engine room You know with these just like wrenches that are like you know five feet tall And I honestly I really could not imagine not doing a series of stories after that

And I went home and I had some wine and I was like drunk tweeting about how amazing would it be to just tell the stories of all these people in the supply chain and that's what happened. Alexis decided to embark on an eight part series called Containers about how the shipping container has changed the global economy. We're gonna feature one of the stories from that series on the show today,

but first I wanted to talk a little with Alexis about what the world was like before the container. So like before the 1970s or so, starting with the ports. So if you want to think about what a port was like in the old days, just look at the piers, look at how they're shaped. They're these long kind of fingers coming off of the shoreline. Well, the ships would have pulled up into what those are called finger piers. And then they would have unloaded their stuff. There would have been all these hundreds of people running around and ships would have pulled up into what those are called finger piers. And then they would have unloaded their stuff.

There would have been all these hundreds of people running around and they would have unloaded their stuff directly onto those piers, which would have then gone into cargo sheds. So you've got guys working winchets, you know, kind of like little mini cranes on the boats. And you've got all the stuff sort of stored inside the hull of the ship. That was the container. They're dropping it onto the docks. Other people are forklifting it around. Trucks are pulling up. There's all these crews running everywhere.

And so the notion of the docks, like the waterfront, this sort of charismatic place that I think lots of people know and understand, it's because there were all these people from all over the world and the goods themselves, literally the stuff coming from all these places is visible to your view. So you can smell the coffee when the spice ships come in. You'd smell the cardamom. When there was something that was disgusting, like hides that was being worked, you'd smell green hides being handled by people. You would have seen big rolls of newsprint moving around, right? Like the way the world worked was actually sort of exposed to you before it got re-put in to factories and products

and all these things. And so it was actually this incredible site, you know, I had an old longshoreman, you know, graduated high school, but only high school. And he said, you know, there was an entire education about the way the world worked, just looking at the goods that were sitting on the docks. When people started shipping things in containers, goods could be loaded and offloaded more easily. The containers full of stuff could go directly from the ship onto trucks and trains, and everything was standardized all over the world.

Containers eliminated a lot of inefficiencies from the system, and ports have completely changed. You know, ports now are these long, flat bursts. The ships come in, they dock, and then, you know, these largely white container cranes drop over them. Those cranes are really a wild thing when you think about it. The reason they're next are so long that's called the boom is because the ships are so wide. They go out over the whole ship, and then a little person in a little cab goes out all the way across the ship, and they look down through their legs, they drop this thing called a spreader onto these four locking mechanisms on the box. They pull it up, they bring it, they drop it onto an intermediate truck that takes it into

the holding yard. Then a Dreyage truck comes in, drives through West Oakland, spraying diesel all over the community, and then takes it out to a distribution center in Tracy or wherever it is. That's a pretty normal flow. But containers didn't just have an effect on ports. They had an effect on port cities all over the world. Oakland included. Because absolutely everything about the way that cities work and global trade works was

changed by the system of containerization, not just the box, but everything that went along with it, the locking mechanisms, the operations of the yard, the ships that had to be developed in order to carry more containers. And basically, one way that I've thought about it is there were computers before and there was networking before, but then there was this thing called Internet Protocol that allowed like a packet to be moved around no matter what was inside them, and that allows

for this explosion of networking. That's essentially what containers do for stuff. You can just put any X thing into a box, and it can go to any port. And as I was reading this defining work on this process of containerization called the box, by Gennie Mark Levinson, who's in the series, there's this huge role for Oakland.

For most intents and purposes, C-LAND is the first major container shipping company. They really get their explosive growth because of the Vietnam War, shipping things from Oakland to Vietnam. And that was so fascinating to me, particularly because almost immediately they go to Vietnam to a container port built in Camron Bay, and then they start going back by Japan. And as they go back by Japan, they pick up cheap electronics and then come back to California and start selling them.

And that becomes this dominant mode of trade in the world. And it literally reshapes the world economy. And it's coming from these three, you know, cranes that are sitting over there, still sitting there unused in the port of Oakland. And I just thought, like, how is this not a better known story after you got started after talking to your Romanian captain and drunk tweeting What were you most surprised by when you started doing the story? I think there's really two things one is the incredible fact that containerization had on cities and that continues to have on cities. The first wave of containerization wipes out so many jobs in urban America and urban coastal America.

It really, really does bad things for a lot of cities. Like, you know, that empty warehouse, Brooklyn aesthetic, like that was those warehouses used to be full with goods. And then containerization came along and wiped out all the warehouses. And that's what created the ability to have these kinds of creative workspaces that you have now. That's your, you're in the energy and the carcass of the old system of trade when you're in one of those spaces. So that was what I didn't, I just had no idea that this happened all over the world and London in New York and San Francisco everywhere.

Even though the invention of the container wiped out shipping jobs all over the world, there are still a lot of people working in the industry. What those people do, and whether they will be able to hold onto their jobs as the shipping industry continues to change, is what Alexis explores in episode three of containers. You have all these people out there whose jobs are linked in one way or another to things made around the world, and most of them tend to be in places like California, or Virginia, or New York, these big coastal ports. And their jobs and what those jobs are,

I mean, I had no idea, like what is it to work in a warehouse? What is it to work on a tugboat? What is it to work in a port? There are no stories about these things ever. And so that take away for me is maybe a collage of all these different work experiences and trying to get the texture of those lives and how those people see the world.

It's kind of like the point of containers. This is episode three of containers called the ships, the tugs, and the port. Here's Alexis Madrigal. He meet a lot of tough people near the docks, intense captains, burly long shorm, and salty skippers, rugged old timers. But I want you to meet the most hardcore person

I've met during my time reporting on the waterfront. And I thought to myself, well, I'll go in this career in this industry and kind of see what happens. You know, I'm not thinking that this is my dream to grow up and be a ship's captain. This is Lynn Courwatch. She became the first female captain of an American cargo ship under remarkable circumstances. And during those first years, I had the opportunity to sail initially as a maid on an oil tanker and was in Southern California when a tanker

blew up and said, oh man, maybe this is really not the gig that I want. So she joined the master mates in pilot union and began sailing on all kinds of ships around the world. I quickly kind of decided that, you know, going to places like the Far East and South America was a little bit more of a challenge, you know. In the 1970s and early 80s, they had never seen women on ships. Every time she entered a porch, she had to explain to skeptical dockworkers that she wasn't the captain's wife and that the men had to listen to her.

It was tough work. So she decided to try to work her way up at the American shipping line, Matsum, which ran and still runs, shipped from Oakland, a Hawaiian back. I had the opportunity over the years to advance to the chief mates position at Matsum. They were very good to me. And when an opportunity came up to be promoted on a temporary basis to Captain, one didn't turn it down.

Yeah, of course not. Why would you? You never knew when that opportunity was going to come along again. Only one hitch. So, despite the fact that I was eight months pregnant. And there's no Dr. On Board of Containership. Let alone no bee or midwife or adula. I said, gosh, you know, I think I got to do this.

And, you know, as you can appreciate, being pregnant is not a handicap. Or, you know, something that should limit your opportunities. It's just something that happens and you kind of carry on with life. So that's what happened. I was eight months pregnant, probably more than eight months pregnant, and said yes, let's go. What was your plan if you'd gone into labor? It was kind of funny because my chief made at the time, um, had recently delivered his own baby in his car. So he was delighted with the idea

that, oh man, I get to do this and won't that be really fun. Needless to say, it didn't turn into a reality, but what did kind of complicate the situation was after I got off the ship about five days later, I did go into labor and found out that, you know, unbeknownst to me that my son was breached. That means feet first, which makes for substantially more dangerous labor. So should I have gone into labor on the ship, it would have been a much bigger challenge than I think any of us ever anticipated. That two Lynn Corewatch is a down to earth groundbreaking woman in the field of shipping.

And the long time part of the Bayes Maritime Economy. She's respected by all for her toughness and intelligence. Her track record made her natural fit to become the head of the San Francisco Marine Exchange, which may be the oldest institution in all of California. So the Marine Exchange is an organization that was founded back in 1849 to really track and monitor ships as they arrived in San Francisco Bay. We put the telegraph upon telegraph hill in order to communicate that information down

to our maritime partners. We had several relay stations around the Bay. And primarily, we were moving that information around. There was a trading floor so that when we passed this information down to our membership, they were trading commodities right then and there on the floor. They knew that this ship had been coming from South America or from the East Coast or from China because that would be passed through Semaphore or through flags. It's not a stretch to say that San Francisco and all the surrounding towns exist, basically

because the Bay had a good port. San Francisco became a part of the global archipelago of important cities. The waterfront area along the Embarcadero was where those break bulk ships came and that's really, you know, where I think the economy of San Francisco grew and grew and grew. Nowadays, the marine exchange knits together the many different pieces of the current maritime economy. They're the honest broker that everyone works with to address stuff like safety and trade, stuff like that. Our mission really hasn't changed. We do exactly the same thing. We don't control ships.

We don't direct ships, we monitor the ships because we do have management part of our organization as well as labor. We have become somewhat of a neutral provider for services. And one of those services is that they publish a book, a book that kind of inspired this entire series that you're listening to, it lists all the businesses that ply the waters. Anchors chains and deckvading, barging, boating services, boilers and water treats.

Something kind of book you see much anymore. It's spiral bound with lots of tabs. It's a book that's meant to be used. And paging through it, you really see the variety of businesses who ply the waters and supply the ships. The people who bring supplies and service lifeboats and make ropes and haul trash and sell anchors, so many types of businesses that you need to have a functioning maritime economy.

If the containerships are the big animals, these companies are the little nimble creatures that make the ecosystem work. It's like inside one of these small businesses who works these jobs. I wanted to know, so I called up a tag book company listed in the Marine Exchange Handbook. A few days later, I was sitting across from Ted Blankenberg in a messy office inside a manufactured building right at the foot of the Bay Bridge.

Let's just say he was an adventurous young man. I went to college, I spent a couple of years in the army, I got on the modern pentathlon team, running, swimming, pistol shooting, fencing, and taking a horse, hopefully over a course. Ted works for MNAV, one of the tugboat companies that services the bay. Like the rest of the maritime economy. Tugboating is inextricably linked with the business of global shipping. He's also a world-class bullshitter and hilarious.

Well, that's a picture of me falling off a horse into a brick wall. He's been around the tugboat industry for 30 years. I was tending bar and a friend of mine's mother owned a tugboat company. And my friend heard my line of a pattern from behind the bar and a friend of mine's mother owned a tugboat company. And my friend heard my line of a pattern from behind the bar and he goes, oh, we got to get you on the air. We need a night dispatcher. So I started working three days a week. This was the best job I ever had.

Three, 14 hour days a week from four at night till six in the morning and you could sleep a few hours on the job. That was a good gig. But the business of tugboating is changing. Their customers, the big shipping lines, have been locked in fierce competition with each other. And I mean, let's be real. They've been in a race to the bottom. And the shipping companies in the past,

probably since 2008, have been losing their shorts, I mean, by billions of dollars a year. Two consulting firms, Drewry and C Intelligence estimated 2016 shipping industry losses at eight, maybe 10 billion dollars. And each one of those ships is, you know, it costs $150 million, so you have a big old investment, and you're not even making money, you're going to all the stern. Now, how they stay in business, I seriously don't know. How they got to this

point was Merisk, which is the biggest shipping company in the world, or Danish, decided to build ships that were twice as big as all the other ones. Maskline's new triple E class will be the world's largest ships. A record 400 meters long and 59 meters wide. Triple E stands for energy efficiency, environmental performance, and economies of scale. A bunch of shipping lines followed Mayor's lead in building mega mega mega ships. This created a spike in available shipping supply and demand did not follow suit. So as you might expect prices have plummeted. That's meant really really cheap shipping for people importing and exporting stuff. Historically, the Journal of Commerce says that it cost about

1800 or 2000 bucks to ship a box across the Pacific. Right now, the price for a big retailer is more like $7 or $800. If you're making brake pads and pantyhose and toothbrushes in China, and you ship in a moment in Nebraska, they're gonna get shipped. Somebody's gonna ship them. And the shipping companies are really your burden.

And that means they become desperate to somehow survive. They're scared. The number seven in the world went bankrupt. HAN JIN, Korea's once mighty shipper has applied for bankruptcy protection in the United States. Fewer calls means less revenue for all the companies that service ships coming in. The industry is getting tougher and tougher to survive in.

There's no slack left in the system. The local companies have responded with consolidation themselves. Amnav, for example, was purchased by the Marine Resources Group, which became Phos Marine, which is owned by the Seattle Base Salt Chuck Resources Incorporated, a conglomerate that controls 30 logistics businesses. Everybody needs some bigger entity for protection. And that was before Donald Trump started at least talking about a so-called America first trade policy, in which presumably more things are made in the United States and less things are made in Asia.

If you've already got too much shipping capacity out on the ocean, and then the US suddenly starts importing fewer things. That could send an already stressed industry into a plosive decline. And the blast radius could extend far beyond the West Coast ports. 12% of US GDP, roughly $2 trillion worth of the economy, is dependent on goods flowing through the West Coast. You mess with that, and you're literally gambling with the national economy. And yet, the little maritime business is soldier on, doing the work,

despite the corporate squeeze and the darkness on the horizon, just like all the rest of the companies and unions who make the supply chain go. Every time a ship comes in it's like putting on a wedding. I mean you've got a myriad of details and you forget one and it's just awful. You got to notify the Coast Guard and order up longshore ganks to unload ships and line handlers to tie the big boat up. You need tugboats and a bar pilot to pilot the cargo ship into the bay directing the movements of the tugs. The ship shows up 12 miles west of the Golden Gate Bridge. A pilot will board and take it into the bay all the way to which birth.

After I learned about the business, I wanted to see what the actual work was. Like how does this work get accomplished? What does a tugboat do? So I asked Ted and he got me on a boat called the Patricia Anne. Will is the skipper of the Patricia Anne. Our job for the afternoon is to guide a medium-sized container ship called the Cat Palaceer off the dock and out of the Oakland Shipping Channel. It's tied up at birth 59 of the Oakland Container Terminal, and it's a pretty standard two tugboat

job. We'll be pulling it off the dock, taking it up to the turning basin, turning basin, spinning it around, and probably getting released somewhere along the inner harbor. So this orange vessel ship up here, ports I too, that's the cap halister. Though it's not a large ship by the standards of the industry, it is enormous by any other standard.

We cruise past the cat palisers and will snuggles the tug up against the dock to await orders. Waiting for the call, we look out at the big Oakland International Container Terminal, one of the busiest terminals on the west coast. There's stacks of boxes bearing the names of the big shipping lines, Merck, MSC, CMA, CGM, APL, Costco. It used to be the individual lines, operated ships, and their own terminals. Now, what are called stevedoring companies run these places,

leasing the land from the port of Oakland and servicing a bunch of different ship lines. This particular one is run by SSA, stevedoring Services of America. The guys unloading the ships are all members of ILWU, the Longshore Union. What we're looking out at is a huge and highly diverse slice of the working class.

Call the dogs, so they can't out for a 50-trile. Be sure I'll be real quick, have a new one. And, got the end, good afternoon. Have a new guys, have a new year. So, some stuff. Down, some stuff now. Seven, seven. Try to make a very nice light out.

And, Patty, so we'll do the turn. We'll have you pushing on the port bow once we make our... The first step is to hit ourselves to the ship. We have a line on our tug that attaches to a line on the ship, and whether the tug is pushing or pulling the container ship, the tug stays attached on these ropes. These lines are very, very strong. I mean, they're partially woven out of Kevlar. Once this line gets up, we'll receive a signal, and then what I'll do is I'll come back and

push on the side of the ship so that they can take in their lines and the ship will still be pressed up. We're pressed up against the container ship when the longshoreman released the lines on shore. Our tugs are there to keep the ship from bobbing around until we're ready to pull it off the dock. You often see tugboats in this position pressed up at a 90 degree angle to the ships they're about to work. Now it's time to start pulling the cap halus or off the dock. It happens almost imperceptibly. The ship is so huge and it moves so slowly and smoothly. And the tug crew is so calm that I was not actually sure what was going on. Now that we've got the ship off the dock, we power

down to what's called the turning basin. It's a wide area of the shipping channel where we'll spin the container ship so it's turned around to exit the bay into the Pacific Ocean. We'll be pushing from one side and another tugboat will be pushing from the other side of this massive ship, causing it to spin like a revolving door. It's an incredible moment being right up against this thing. I expected to crunch more or something to really feel like we were muscling it, but it doesn't. There's no sound of metal straining. The tugboat hardly seems to move. The water simply parts, and the wall of metal looming above us rotates.

The last task will be to ride alongside the ship as we head out. The tug's act is brakes, so the big ship doesn't get going too fast. We're going alongside right now, so mostly ships, they're like, if you put it in terms of a car, their first gear is like eight knots or nine knots. Though that's only nine or ten miles per hour, that kind of speed in a narrow shipping channel can rock the other ships alongside the dock, damaging them, so the tugs drag backwards on their lines. Stop and drive, patty.

We're finally given our release to go home. It's time to take our line in. Get your patty ready to get taken in up. Yep, we're getting under it right now. All in the move takes a couple of hours, though most of the action takes place in just a few moments. Soon, we're back at the dock. The trucks have begun streaming in

to pick up containers from another big ship that had come to shore. While bigger ships mean less business for the tugboats, it also puts pressure on the truckers. As a whole, they need to pick up more boxes, and they still only have the same amount of time, about four days, to clear the containers out of the terminal. That creates a bigger, trucker-demand spike causing congestion around the port. In other words, fewer bigger ships mix the water too empty and the land

too crowded. At least here in Oakland, some places have done very well in the mega-ship era. In general, the trend among ports has been increasing centralization. So imagine a map of the world, with lines connecting different ports, and the thickness of the line represents how much stuff gets shipped along that route. In the pre-container days, there would be lots of skinny lines going all over the place. As containerization took hold in the 1970s, and later China entered the WTO in the 90s, the lines connecting China to a few ports on the west coast get really fat, swallowing up other trade routes.

The way it played out in the US is at the San Pedro Bay, which is where the competing but connected ports of Long Beach and Los Angeles are located begin to dominate everyone. In 2015, for example, these two ports handled 78% of the import containers along the West Coast. And for all the West Coast ports, 62% of imports came from China, damn near 50% of all the import trade from Asia to the West Coast is just running back and forth from San Pedro Bay to China. I ended up talking all this over, in a conversation with Tim Wong, a Berkeley-educated lawyer and local polymath who published the Container Guida, wonderful little book on the shipping industry disguised as a dockside companion to spotting boxes.

In ports, as in ships, he said, everything has become a size and efficiency. Can you get big enough to stay alive and keep your whole maritime business ecosystem healthy? Oakland was able to survive for a period of time, but as technology gets better, the cost of choosing one port or another on the Western seaboard, they all become a commodity. This is the same trouble that's happened with the container companies themselves, the liner companies, where they're basically selling this commodity, which always is dropping, the value of it is always dropping. There's lots of incentives to overproduce capacity in ways that completely drive everybody

out of business or make it so that only the largest companies that can squeeze tiny pennies out of huge numbers of transactions actually can survive. And I wonder for a period of time, basically geography was the great protection of these ports, right? Because they could eat up all the smaller, regional ones, but not have to compete with much larger ones. But as boats get more efficient in the way they move, suddenly they basically compete on the same footing with other ports. And

there, then the geography server doesn't help you anymore, right? What really starts to help you is, can you really scale up the size of the port and maybe Oakland just can't expand fast enough there? Across the world, more and more business is centralizing in fewer and fewer ports. And yet they need to maintain the whole ecosystem of services like tugboats and all that stuff. The import game is never going to be that much bigger for Oakland at this point.

But they might be able to scale up their exports. That's because geography remains important for them. Think of it almost like a watershed for cargo, a cargo shed, if you will. Oakland naturally drains the whole Central Valley, not to mention Napa and Sonoma, which are some of the most important agricultural regions in the country. So the port officials want to expand on that strength,

building a huge refrigerated facility that would allow Midwestern meat producers to put their port on a train, and send it all the way to the ocean to the port. From there, it had shipped out to China. You end up with this capitalist virtuous circle, the efficiency of global shipping allowed for the production of electronics and all kinds of other stuff in China,

which helped create their middle class. And now that burgeoning group of wealthier Chinese people end up importing American goods, driving our own economy. But that only works if American producers can send those goods to China. If we end up in a trade war, those pork and wine exports are in trouble. Containers is produced and hosted by Alexis Madrigal

with editing production and sound design by Jonathan Hirsch. You can find the eight-part series, I think they're on episode five right now, on iTunes or wherever you get podcasts. 99% Invisible is Avery Trouffman, Katie Mingle, Kurt Colstead, Taren Mazza, Delaney Hall, Sharif Yusif, Emmith Fitzgerald, Sean Riel, and me Roman Mars. We are a project of 91.7 K-A-L-W in San Francisco and produced on Radio Row.

In beautiful, downtown, Oakland, California. You can find this show and like the show on Facebook. All of us are on Twitter, Instagram, and Spotify, but to find out more about this story, including cool pictures and links, and listen to all the episodes of 99% Invisible. You must go to 99pi.org. Radio Tapio.

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