Everything Everywhere Daily: History, Science, Geography & More - The History of Shipping and How It Created the Modern World

Starting point is 00:00:00 Ever since the dawn of human civilization, it has been shaped by the movement of people, goods, and ideas. Yet for almost the entirety of that time, transportation was very difficult, and in some places it was extremely difficult. Yet the transportation of goods has been responsible for the rise of cities, civilizations, and much of the modern world. Learn more about the history of shipping and transportation and how it shaped the world we live in today on this episode of Everything Everywhere Daily. If you want a $3,000 a month payday for life, what would you feel free to do? Maybe take a long weekend, every weekend, or try a bunch of new hobbies.

Starting point is 00:00:52 Would you feel free to upgrade and listen ad-free? Don't worry, we get it. Every $20 ticket could win you $3,000 a month for life and supports life-saving cancer research at the Princess Margaret. Feel free to buy your payday for life ticket today. Raffle number 155-21.4. Please play responsibly. This episode is brought to you by Accent. When your advertising operations fall out of sync, everything else follows.

Starting point is 00:01:20 Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. This episode is going to be a little bit different. The genesis of this episode dates back to a quote that I remember from President James Monroe. I recall, and I forget where I read it, that he once spoke of the tyranny of space and the problems with moving people and goods into the American hinterland.

Starting point is 00:02:04 For years, I have tried to find the source of that quote and have come up empty. Maybe it was the Marquis de Lafayette who said something similar, but I came up with nothing no matter how much I tried. but I eventually realized that what I thought the quote was was probably an example of the Mandela effect, something that I thought was true, but it wasn't. And I was putting off doing an episode on the subject until I could verify the quote, but I eventually realized after years, regardless of what James Monroe might or might not have said, what lay behind my fictitious quote, was probably still worth talking about. that being the importance and difficulty of shipping.

Starting point is 00:02:48 When the first human civilizations arose, almost all of them were established on riverbanks or long coasts. And the primary reason for this was agriculture. Those river valleys were extremely fertile and they offered opportunities for easy irrigation. However, these locations near the water also had another significant advantage. Easy transportation and shipping. Before the industrial, age, transportation was governed by one overwhelming economic reality. Water transportation was far,

Starting point is 00:03:20 far cheaper than land transportation. A ship or river barge could carry a load that would require hundreds of pack animals and dozens of wagons. As a result, most large cities, commercial centers, and manufacturing regions developed beside rivers, natural harbors, or navigable coasts. Long before written history, people moved goods by carrying them personally, dragging them on sleds or loading them onto domesticated animals. The domestication of donkeys, oxen, horses, camels, and llamas expanded the distance and quality of overland trade. The wheeled wheeled, appeared in Mesopotamia and neighboring regions during the 4th millennium BC. Wheeled carts increased carrying capacity on firm level ground, but they didn't make land transportation cheap. Water transportation developed at least as early.

Starting point is 00:04:11 Dugout canoes, skin boats, reed boats, and simple rafts allowed people to carry much heavier loads along rivers and coastlines. The Nile, Tigris, Euphrates, Indus, and Yellow Rivers served as transportation arteries, connecting agricultural regions and urban centers. Along the coasts of the Indian Ocean and the Mediterranean and in East Asia, seafaring trading civilizations arose. But there was very little in the way of old. overland trade. If you remember back to my episode on the Silk Road, most trade via this route, around 80 to 90% at least, was by sea, not by land. Camel caravans make for a very romantic image, but a camel can only carry so much, and they require constant maintenance and food. And this was the state of transportation and shipping for thousands of years. Transportation by sale was

Starting point is 00:05:03 relatively easy and cheap when compared to transportation by land. Now I want to fast forward to the early 18th century in Britain, and I'm fast forwarding to this point simply because we have robust data available from this period and in this country, and the fundamentals of transportation hadn't really changed a lot from thousands of years earlier. Around 1700, moving one ton of goods, one mile by road, cost approximately 1.2 shillings per ton mile. Moving the same ton one mile on a naturally navigable river cost about 0.12 shillings, or roughly 1 tenth as much. Coastal shipping was cheaper even still. This was a tenfold difference in transportation by land versus by water. For coal that was shipped

Starting point is 00:05:55 from Newcastle to London around the year 1750, the sea freight charge was approximately 0.02 shillings per ton mile. Moving the same coal by road would have cost roughly 60 times as much per mile. For the complete journey, sea freight cost about 5.4 shillings per ton, while an estimated road journey would have cost more than 300 shillings. To be sure, terrain, season, cargo, direction of travel, and insurance could change rates considerably over time. But nonetheless, the overall economic difference between land and water transportation was consistent across much of the pre-industrial world. In the late 18th century,

Starting point is 00:06:36 it was supposedly the same cost to ship a piece of furniture from London to New York as it was from New York to just 40 miles inland by wagon. This made industrialization extremely expensive for any factory without access to cheap waterborne transportation.

Starting point is 00:06:54 Ox and horses simply couldn't economically carry enough coal or iron ore. The first major improvement in overland transportation came through better roads rather than new vehicles. In Britain, term pike trust companies collected tolls and used the revenue to improve road surfaces, drainage, bridges, and gradients. Engineers develop more systematic road building methods. Thomas Telford used strong stone foundations while John Loudin-McAdam developed carefully graded layers of compacted stone, a process that he called McAdamization. Better roads allowed

Starting point is 00:07:29 wagons to carry larger loads, travel more days of the year, and use fewer animals. Real British road freight rates fell by roughly 40% between the mid-18th century and the year 1800. And even after that decline, however, roads remained much more expensive than water transportation. However, what dropped costs even further than good roads was the development of canals. Canals have been around for a long time. China created the enormous grand canal which connected the Yellow and Yangtze rivers. Almost 5,000 years ago, ancient Egypt built the canal of the Faroes, a precursor to the Suez Canal. A horse walking along a towpath could pull a barge carrying dozens of tons. That same horse might only be able to pull one or two tons on an ordinary

Starting point is 00:08:15 road. Locks allowed canals to cross changes in elevation, while aqueducts and cuttings extended water transportation into regions without navigable rivers. By about 1790, British Canal freight averaged approximately 0.25 shillings per ton mile in contrast to 1,700 prices, which was about an 80% decline compared to 1,700 wagon rates. By the year 1840, canal costs had fallen another 50% to about 0.12 shillings in the same price terms. In the early United States, the problem was far more challenging than it was in Britain. It was an entire continent that needed to be access. However, compared to every other country in the world,

Starting point is 00:09:00 the United States had something going for it. Amazing water transportation networks. In fact, the United States has three of the best waterways in the world. The first is the Mississippi River Basin. As I noted in the episode on the Mississippi River, the Mississippi and its tributaries have more miles of navigable, riverway than the rest of the world's rivers combined. The Great Lakes were the second, allowing ports as far inland as Duluth, Minnesota, to connect to the Atlantic Ocean once locks

Starting point is 00:09:32 were built to handle changes in water elevation. And the third is the intercoastal waterway. It's a network of protected coastal rivers, bays, canals, and sounds running along the Atlantic and Gulf Coast of the United States. It extends about 3,000 miles or 4,800 kilometers from Texas, all the way up the east coast. The Hudson River goes inland from New York City, which has a great natural harbor. So the Erie Canal, which was completed in 1825, connected the Hudson River with Lake Erie. Freight rates between Buffalo and Albany fell from approximately 1.68 cents per tonne mile after the canal opened to about one cent by the middle of the 19th century.

Starting point is 00:10:16 As good as inland waterways were for transportation, they were still. limited to areas with water, which left out most of the American West. The real revolution in inland transportation was the development of the railroad. Railroads made it profitable to ship wheat from the continental interior to coastal cities, to develop coal and mineral deposits far from rivers, to create national rather than local markets, and to build factories inland rather than directly beside ports. How much more affordable did railroads reduce the cost of inland transportation? British railway freight rates were approximately 0.1 shillings per mile tonne by 1865.

Starting point is 00:10:58 The 1865 railroad rate was only about 112 that of the 1700 wagon rate. Railroads also open up vast amounts of otherwise difficult to reach land in the western United States, Canada, Australia, and Siberia. The topic of railroads will be its own episode, but suffice it to say, while rail dramatically reduce the cost of inland transportation, it still wasn't cheaper than transportation by water. Also, while railroads did expand where inland transportation could go, it now just made railroad towns instead of river cities. The advancement which allowed for true inland shipping to almost anywhere people might live, assuming they had access to a road, was the automobile,

Starting point is 00:11:42 or more specifically, the truck. Detroit carriage maker August Frohoff is generally credited with building the first practical modern semi-trailer in 1914, after a customer asked him to devise a way to tow a boat behind a Ford automobile. Freight companies soon requested similar vehicles, and Fruhoff established the Fruhoff Trailer Company in 1918. I'm not going to dwell too much on the trucking industry, because I'm going to do a full episode on that subject in the future.

Starting point is 00:12:11 But suffice it to say, improved roads, improved trucks, and improved standardization, all drove the cost of inland shipping, now almost anywhere even lower. Yet despite all the developments with railroad and trucking, it was still cheaper to ship by sea. In fact, the greatest innovation in sea transportation in the 20th century was really an innovation in every form of transportation.

Starting point is 00:12:38 Containerization. Shipping containers revolutionized everything. Modern containerization began in 1956 when trucking entrepreneur Malcolm McClure, Malcolm McLean converted to ship Ideal X to carry detachable truck bodies between Newark, New Jersey, and Houston, Texas. And I've previously done an entire episode on this subject. Before containerization, dock workers would have to load and unload cargo as individual sacks, barrels, crates, and bales. A large, brake-bulk freighter might remain in port for a week to 10 days,

Starting point is 00:13:11 loading and unloading. But with containerization, cranes could transfer standardized boxes directly between ships, trucks, and trains. Comparable port turnarounds could fall to roughly 10 to 24 hours, although very large ships or congested ports might require a little longer. One study found ship turnaround times falling from about eight days to 11 hours, a 94% reduction. Furthermore, a container can be placed on a flatbed trailer for a truck, or two on a flatbed car for a train. Whereas the first container ship carried only 58 containers, the largest container ship in the world today can carry over 24,000. So what is the ultimate result of all the advancements in shipping that have taken place over the last 300 years? If you adjust for inflation using historical

Starting point is 00:14:02 British data, which is very difficult to do over a 300 year period, the reduction in shipping costs has been astonishing. There are many variables, but the reduction in land shipping costs, comparing an animal-drawn wagon versus a modern semi, would be close to, 95 to 97% per ton mile. And the amazing thing is, the cost of shipping by sea has gotten even cheaper. Given the massive cost advantages of container shipping and the incredible efficiencies of ultra-large ships, costs have dropped by 99%. Cheap shipping made the modern global economy possible by allowing raw materials, food, fuel,

Starting point is 00:14:42 and manufactured goods to move vast distances at low cost. It enabled factories to specialize, companies to build international supply chains, cities to grow far from local food sources, and consumers to buy products made around the world. It also reduced regional shortages and price differences. Grain, oil, machinery, and medicine could be sent to where they were needed rather than consumed near where they were produced. In effect, cheap transportation shrank economic distance, turning separate local markets into a single interconnected world.

Starting point is 00:15:17 Maybe President James Monroe didn't talk about the tyranny of space, but it's a problem that we have solved with a vengeance. There are many technological and social advancements which have helped build our modern world, but one of the biggest is one that we seldom think about. The ability to ship stuff cheaply. The executive producer of Everything Everywhere Daily is Charles Daniel. The associate producers are Austin Otkin and Cameron Kiefer. My big thanks go to everyone who supports the show, for on Patreon. Your support helps make this podcast possible. And I also want to remind everyone

Starting point is 00:15:52 about the community groups on Facebook and Discord. That's where everything happens that's outside the podcast. And links to those are available in the show notes. As always, if you leave a review on any major podcast app or in the above community groups, you too can have it read in the show.

Everything Everywhere Daily: History, Science, Geography & More - The History of Shipping and How It Created the Modern World

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