Thinking More About Shipping Innovation
Since 1582, every one percent increase in population corresponded to a 197.4 percent increase in shipping crew productivity.
Yuval Noah Harari notes in the Financial Times that in 1582, the English merchant fleet had a total carrying capacity of 68,000 tons and required about 16,000 sailors. The container ship Ever Alot, christened in 2022, can carry some 236,228 tons while requiring a crew of only 22. One ship today carries 3.47 times more than the whole English fleet did 440 years ago.
This 252,550 percent increase in productivity grew at the same time global population increased by 1,279 percent from 580 million to over 8 billion. Every one percent increase in population corresponded to a 197.4 percent increase in shipping crew productivity.
Malcom McLean was perhaps the greatest innovator in shipping. In 1956, hand-loading cargo onto a ship in a U.S. port cost $5.86 per ton. By 2006, shipping containers reduced that price to just 16 cents per ton. Converting these nominal prices to time prices using blue-collar hourly compensation (wages and benefits) data from measuringworth.com indicates a 99.8 percent reduction in loading costs. For the time required to earn the money to pay to load one ton in 1956, you can get 440 tons loaded today. Loading has become 43,900 percent more abundant.
We don't want some atoms to move, like those used to construct a building. If they move, they lose their value. Other atoms can lose their value if they aren’t moving. Quickly being able to move them to higher-valued locations becomes very important. Containerization has added tremendous value to atoms because it is now much cheaper and faster to move them.
While we have the same number of atoms on our planet today as we did in 1582, our knowledge has grown tremendously. And it is knowledge that makes atoms valuable. As long as human beings are free to innovate by discovering and creating and sharing valuable new knowledge, our resources have no limit.