Mar 10, 2020
History of Business - Great Inventions - Containerization to Robert Noyce & the Circuit
- BRT S01 EP6 3-08-2020
MB talks about 2 great inventors and their impact on business, and world economics from trade to industry.
Malcolm McLean and Containerization Leads to World Trade
Malcolm McLean, a trucker created modern containerization, the standard for freight shipping from trucks to boats.
Malcolm Purcell McLean (November 14, 1913 – May 25, 2001; later known as Malcom McLean) was an American businessman. He was a transport entrepreneur who developed the modern intermodal shipping container, which revolutionized transport and international trade in the second half of the twentieth century. Containerization led to a significant reduction in the cost of freight transportation by eliminating the need for repeated handling of individual pieces of cargo, and also improved reliability, reduced cargo theft, and cut inventory costs by shortening transit time.
McLean’s container had its biggest impact in shipping. Container ships now spend 80 percent of their time at sea; before containers this time was around 50 percent (with 50 percent of time loading and unloading cargo).
Beyond that accomplishment, McLean created a system that goes beyond shipping containers. Container ships now fly the flags of many nations and carry the brands of numerous companies. But they trace their heritage to McLean’s converted oil tankers. In addition, specialized rail cars and trucks were designed to haul shipping containers via land.
While his name is relatively unknown today, this North Carolina trucker invented container shipping, an method now indispensable to the modern world of global trade.
Start in Trucking
Malcom McLean was born into a North Carolina farming family in 1914. Struggling to assist his family during the Great Depression, he started a small trucking company to transport farmers' goods and supplies. His resourcefulness enabled him to expand to thirty trucks by 1940, and he was eventually able to sell McLean Trucking, a $12 million company with over 1700 trucks, by the mid-1950s.
Ship to Truck
His years in the transportation business showed McLean the need for an easier method of shipping goods. He had watched dock workers unloading goods from trucks and transferring them to ships, and marveled at the inefficiency of the process. "Wouldn't it be great," he asked himself, "if my trailer could simply be lifted up and placed on the ship?" In 1955, he gambled big on a container venture, buying two oil tankers and securing a bank loan to buy $42 million worth of docking, shipbuilding, and repair facilities. He refitted the ships and designed trailers to stack below or on the decks. In April 1956, his first container ship, the Ideal X, departed Port Newark, New Jersey, headed for Houston.
McLean named his new company Sea-Land, and rushed to expand it, exposing the business to financial instability. The venture required a lot of capital. His aggressive investment was rewarded by the Port of New York Authority's decision to develop a new container port in Elizabeth, New Jersey, anointing cargo shipping as the method of the future. McLean's cargo shipped faster and cheaper, because loading and unloading were shortened at each end of the voyage. The sealed cargo reduced the pilfering that went on at various stages of the cargo's journey and also reduced the labor required. The Vietnam War aided his efforts to expand into Asia, and as more ports adapted to the containers, shipping was revolutionized. Nearly every imported consumer good imaginable owes its lower price to the container revolution. McLean sold Sea-Land for $160 million in 1969. He produced more inventions in his lifetime, including a means of lifting patients from a stretcher to a hospital bed. In 1978, restless, McLean returned to shipping, introducing enormous "econoships" to carry cargo at the equator while smaller ships came and went from them, picking up and delivering containers. McLean died in 2001, relatively unknown considering the broad impact of his innovation.
Maersk Line in 1999 purchased Sea-Land Corp. - the predecessor of the spin off from RJ Reynolds who owned McLean's shipping co.
Robert Noyce and the Invention of the Semiconductor, Microchip, Circuits
Robert Norton Noyce (December 12, 1927 – June 3, 1990), nicknamed "the Mayor of Silicon Valley", was an American physicist and entrepreneur who co-founded Fairchild Semiconductor in 1957 and Intel Corporation in 1968. He is also credited with the realization of the first monolithic integrated circuit or microchip, which fueled the personal computer revolution and gave Silicon Valley its name.[nb 1]
Robert Noyce was one of the founders of Silicon Valley
He graduated Phi Beta Kappa with a BA in physics and mathematics from Grinnell College in 1949 and a Ph.D. in physics from Massachusetts Institute of Technology in 1953. He studied the first transistors, developed at Bell Laboratories, in a Grinnell College classroom.
After graduating from the Massachusetts Institute of Technology in 1953, he took his first job as a research engineer at the Philco Corporation in Philadelphia, Pennsylvania. He left in 1956 for the Shockley Semiconductor Laboratory in Mountain View, California.
Noyce and Gordon E. Moore (a chemist and physicist) founded Intel in 1968 when they left Fairchild Semiconductor. The relaxed culture that Noyce brought to Intel was a carryover from his style at Fairchild Semiconductor. He treated employees as family rewarding and encouraging team work. His follow-your-bliss management style set the tone for many Valley success stories.
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