McLean's - American Shipper

graduate whom McLean hired in 1957 as his company’s firstmanagement trainee.Johns, who was president of Sea-Land Service Inc. from1979 to 1986, is currently chairman of Hampshire ManagementGroup, based in Roselle Park, N.J.“In the early days, he certainly didn’t say, ‘let’s get thiscoastwise deal up and running so I can go to Europe.’ All thathappened eventually occurred step by step,” Johns said.At that time, McLean learned a lesson from Eric Rath, a Miami-basednaval architect and engineer, who had put togethera fleet of several LST landing craft that he had converted intotrailerships.In 1954, Rath’s company, Trailer Marine Transport, beganoperating its vessels between Jacksonville,Fla.; Miami; and San Juan, Puerto Rico.Instead of building up a trading routebetween those venues, Rath sought todevelop transatlantic operations, and wentbankrupt.Crowley Maritime Corp. later boughtRath’s company, replacing its LSTs withmulti-deck barges and making the businessprofitable. That routing continues in 2006as part of Crowley Liner Services.McLean knew that it wasn’t enough toprovide a container service to Puerto Rico. It was also necessaryto have sufficient goods coming back to the United States sothe ships would not return empty.To that end, McLean hired William Neuhauser away from WallStreet to lure major U.S. firms, such as Johnson & Johnson, toset up offshore manufacturing plants in Puerto Rico that wouldgenerate valuable return cargo.Prior to the 1950s, about all Puerto Rico could send north wassugar and cement. Neuhauser was a prime catalyst in changingthat situation, as more American companies saw the sense ofestablishing Puerto Rican operations.“Bill Neuhauser made the Puerto Rican service more profitablefor McLean,” said David Howard, founder of American Shipper.“He never received the credit he should have for doing that.”Neuhauser’s recruiting of U.S. companies was similar to thehistoric British, Dutch and Scandinavian traditions of setting uphuge trading companies that would generate cargoes for shipsen route to national colonies.Yet McLean departed from this venerable European approachby having no financial involvement in the U.S. firms that expandedto Puerto Rico — just a favorable opportunity to bidfor their plant-to-plant freight.East Coast, West Coast beginningsOn April 26, 1956 — a grim, rainy day — about 100Pan-Atlantic employees and McLean’s invited guests assembledat Shed 154 in Port Newark to watchTantlinger’s bizarre-appearing retractingspreader lift 58 reinforced half-truck-sizedcontainers onto the 524-foot-long Ideal X,a tanker with a cargo deck.The truck trailers, which had beenseparated from their wheels and undercarriages,were more generally called “trailers”instead of “containers” at that time. LaterMarvin Barloon that day, the Ideal X sailed for Houstontransportation economist and, indisputably, into history.Pan-Atlantic’s first ship filled with cellguides to hold containers, the Gateway City, went into regularservice in the fall of 1957.Even as the Gateway City departed, there was lingering nervousnessabout how well container cells would work at sea.One naval architect predicted that the flexing of the vessel’shull would crush the containers in their confined cell guides. Yetafter a voyage from Port Newark to Miami, the containers werefound to have moved no more than five-eights of an inch.In 1957, Marvin Barloon, a transportation economist, wrotean article for Harper’s magazine called “The Second TransportRevolution” that had wide influence through the transportationindustry. Barloon clearly spelled out economic variances betweenrailroads and truck lines. “In 1929, the intercity truck lines movedonly two ton-miles of freight for every 50 carried by the railroads.“A ship which wouldnormally require four orfive days to load is packedwith trailers and out to seain eight hours or less.”In 1954 Eric Rath, a Miami-based naval architect, began operating a fleet of LST landing craft that he convertedto trailerships. Trailer Marine Transport served between Jacksonville, Fla.; Miami; and San Juan, Puerto Rico.16 AMERICAN SHIPPER: APRIL 2006