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Shipping container makes world smaller, KC and world economy bigger

Updated: 2014-01-14T05:48:19Z

By KEVIN COLLISON

The Kansas City Star

Next time you open a bottle of Chilean wine — or wear a shirt from Bangladesh or watch a flat-screen TV from South Korea for that matter — toast Malcom McLean.

Thanks to McLean, a North Carolina trucker who launched a revolutionary way to move goods in 1956, you’re paying substantially less for that imported wine or clothing or electronics or about everything else manufactured around the world.

McLean pioneered the universal implementation of intermodal shipping containers, those basic big metal boxes that are loaded with cargo in remote pockets of the world, trucked to foreign ports, shipped across the ocean and then unloaded in the U.S. or Mexico and stacked on trains for delivery to Kansas City.

Those 20-, 40- and 53-foot containers are the building blocks of the global economy and the reason BNSF Railway spent $250 million opening a new 1,300-acre intermodal facility in Edgerton last fall. It joins other smaller intermodal facilities in the area operated by Kansas City Southern, Norfolk Southern and Union Pacific.

“The container made globalization possible,” said Marc Levinson, author of “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.”

“Before containers came on the scene it was very expensive to ship goods,” he said. “Containers made it possible for businesses to have supply chains around the world and made it possible for people in the middle of America to have cheaper goods from around the world.”

Containers have become so synonymous with global trade that several were stacked in Penn Valley Park near the Federal Reserve Bank of Kansas City headquarters in 2011 to protest the nation’s trade deficit.

Coursing through KC

You can observe the global economy arriving here daily in all its grand scale at the new Logistics Park Kansas City operated by BNSF on the south edge of Johnson County a couple miles off Interstate 35.

Five electric cranes the height of nine-story buildings, bright orange against the blue prairie sky, glide or, as operators call it, “gantry” along rails, hoisting containers on and off trucks and trains parked along a 1½-mile stretch of tracks. Each crane weighs 1.6 million pounds and is powered by 12,500 volts.

Operators in cabs suspended 80 feet above “trolley” along the 270-foot width of the crane — almost a football field — to deposit containers, which weigh up to 67,000 pounds, to the right place. On an average day, 1,000 lifts are completed at the facility.

“We’re in the transportation business, and these containers have been a huge asset to the global supply chain,” said Andy Williams, a spokesman for BNSF Railway. “We’re extremely proud to be part of that, transporting goods people use every day, from TVs to carpet to building materials.”

Chris Gutierrez, president of Kansas City Smartport, described the new BNSF facility as a “game-changer” for the area economy. The adjoining industrial park is expected to attract more than 20 million square feet of warehouse and distribution buildings over the next 10 to 15 years and create up to 10,000 jobs.

“Because of the historic nature of Kansas City and the railroads, you have a concentration of freight moving through here,” he said. “Most of the growth in railroads is with containers and intermodal. BNSF has made a commitment and invested the money.”

Wanting a better way

It all started in 1937 with a frustrated truck driver.

McLean had started a small trucking company a couple of years before and was hauling cotton bales between North Carolina and Hoboken, N.J. At that time, ports operated much the way they had since ancient times. Cargoes were broken down piece by piece and then reloaded onto ships, a time-consuming and expensive process.

The entrepreneur with a high school education started thinking about a better, quicker way. Over the next 15 years, McLean built his trucking company to become the fifth largest in the nation, with extensive operations on the East Coast. He eventually came up with the idea of a detachable trailer that could be loaded on ships.

In 1956, using an adapted World War II oil tanker he rechristened the “Ideal X,” McLean loaded 58 of his new containers aboard for a voyage between Port Newark, N.J., and Houston.

When asked that day what he thought about the departing ship, a top union official with the longshoremen, knowing full well the looming downside for his workers, replied, “I’d like to sink that son-of-a-bitch.”

McLean’s innovation took off, and now 14 million containers are being shipped around the world on a fleet of about 5,000 container ships.

McLean, who died in 2001, was named “Man of the Century” by the International Maritime Hall of Fame, but his contributions remain little known by most people. Levinson said his work revolutionized the world’s economy.

“Containerization did away with cargo handling and gave rise” to the intermodal chain of ships, trucks and trains, he said. “It put cargo into standardized containers that could travel on any conveyance pretty much anywhere in the world.

“In olden days, when goods had to be loaded piece by piece, the cost of transportation was 15 to 20 percent of the goods. With containerization, transportation costs are almost unnoticeable. It costs 6 or 7 cents to bring a bottle of wine from Australia to Kanas City or 5 or 6 cents to bring a T-shirt from Bangladesh.”

Making connections

Containers are the foundation of a fascinating business for people like Adam Hill, vice president of operations at Kansas City-based Scarbrough International. The firm works with clients around the world arranging the shipment and delivery of containers packed with goods.

“It absolutely is fun; something changes every day,” he said. “If you ask people in the office about their job they’ll say, ‘I talk to China every day.’

“We also have to know what the weather is in every part of the world. If there’s a hurricane in Japan, it can cause delays everywhere.”

A container departing from Shanghai takes on average 12 to 14 days to complete its voyage to the Port of Los Angeles. Once in Los Angeles, it takes about three days to unload the shipping vessel and load the containers on a train.

Once the containers are loaded on the train they make their way to BNSF’s new intermodal facility in Edgerton and usually arrive within five days. The containers are then ready to be picked up for customer delivery to their final destination or distribution from the growing number of massive warehouses opening in the Kansas City area.

“We move one ton of freight 500 miles on a gallon of diesel fuel. That’s four times more efficient than a truck,” said Joseph Lumbert, senior manager for hub operations at Logistics Park Kansas City. “Being part of an environmentally friendly way to transport goods is one of the things I’m proud of.”

Inside the BNSF hub

About 300 people work at the new Edgerton facility, which replaced a smaller intermodal operation operated by BNSF at the Argentine yard in Kansas City, Kan. The new operation has the capability of handling 500,000 lifts annually. Last year, Argentine handled 346,000 lifts.

By comparison, the Voltz intermodal operated by Norfolk Southern at 4800 North Kimball Drive handled 144,000 lifts last year, and the Union Pacific intermodal facility at 4801 Gardner Ave. handled 90,000 lifts last year.

Kansas City Southern, which brings in many of its containers from a Mexican port, handles thousands of lifts per month at its operation at the former Richards-Gebaur airport, but declined to provide a specific number.

Though the universal mule carrying all that cargo is a simple steel box, how it’s tracked and secured involves sophisticated technology.

When a truck arrives at Logistics Park Kansas City, it drives around 15 miles an hour through a portal where the vehicle and its container are optically scanned. Within seconds, the identifying number on the container and the truck’s license plate are registered on a computer, and even the truck tires are checked for damage and wear.

The driver then pulls up to a kiosk where the container is processed and its possession transferred to BNSF. If the driver already has been to the facility, a biometric scan of his or her fingerprint verifies identity. If not, the driver must register at a separate location.

The identifying number on the container instantly tells operators where it originated, what’s inside it and where it has been. For security reasons, only a small number of people at the intermodal facility know what’s inside the box.

Before the container revolution, pilferage was a routine problem in shipping. But once a container is sealed, only authorized workers can open it.

“All containers are sealed with numbered seals,” Lumbert said. “Containers with high-value loads are placed at the bottom of the stack with others on top of it. We have video on everywhere too, and only a handful of people know what’s inside.”

Only three of the 300 workers at the new Logistics Park Kansas City actually are BNSF employees. Most of the rest work for In-terminal Services, a national contracting firm that handles operations at many intermodals.

Making sure containers and equipment can be quickly located for efficient operations is an exacting task. Containers are stacked no higher than four units at the BNSF operation to minimize how much moving needs to occur. Once on ships, those shipping boxes can stacked 15 or 20 high.

There are also rows and rows of truck chassis, more than 1,200, along the 1½-mile stretch of asphalt tarmac next to the railroad tracks where the cranes operate. The international containers used on ships are generally 20- or 40-feet long; those used domestically are 53-feet, the length of a standard semi-trailer.

In a twist at the new Kansas City facility, empty containers are loaded with grain at the adjoining DeLong Co. distribution facility for the return trip to the Far East.

Three more cranes are expected to be added when the BNSF logistics park is fully built out, according to its 1,550-acre master plan. Its capacity at that point will be 1.5 million containers annually.

Future direction

There are questions, however, about where the intermodal container industry is going — literally.

David Gligor, assistant professor of supply chain management at the Bloch School at the University of Missouri-Kansas City, noted that a major expansion of the Panama Canal is scheduled to be completed next year. Once that project is finished, the 100-year-old canal will be able to handle much larger container ships.

Gligor said ships that now have to unload their containers on the West Coast, which are then stacked on trains for the cross-continental trip to the East Coast, will now be able to skip that detour.

“The West Coast will lose volume,” he said. “In Kansas City, we’re trying to stay competitive by providing more value-added services.”

Those services mean not only handling and storing finished goods brought here by container, but assembling final products using parts manufactured in other parts of the world and brought here for final assembly. That would mean additional light manufacturing jobs.

Gligor said American companies increasingly are seeing greater value in having their products assembled domestically to meet client demands faster. Creating more international trade zones, where parts can be brought in duty-free and then taxed when the final product is sold, would help boost that economic opportunity.

Gutierrez of Smartport doesn’t agree that intermodal activity in Kansas City will change substantially after the enlarged Panama Canal is in operation. He added that efforts already were being made to encourage value-added services. Smartport is part of the Kansas City Area Development Council.

He noted that Blount International already is doing some final assembly work from parts delivered to its distribution center at KCI intermodal BusinessCentre near the airport. Gutierrez said more than 20 companies in Kansas City are operating in spaces designated as foreign trade zones.

“I don’t expect the Panama Canal expansion will significantly affect the Los Angeles ports,” Gutierrez said.

To reach Kevin Collison, call 816-234-4289 or send email to kcollison@kcstar.com. Follow him on Twitter @kckansascity

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