Bitcoin: The Shipping Container of Money
What the history of shipping containers can teach us about Bitcoin.
On April 26, 1956, fifty-eight metal shipping containers sailed aboard an old tanker ship from New Jersey to Houston while fifty-eight truck drivers waited patiently inside their trucks to take these metal boxes to their final destinations all throughout the United States.
This seemingly uneventful moment changed the world as we know it.
No one would typically consider a lifeless aluminum box held together with welds, bolts, and rivets as a disruptive technology. Like many innovations, the value of the object doesn’t come from what it is, but how it’s used.
The shipping container made shipping cheap. It lifted poorly paid and ill-treated workers out of poverty. It allowed entrepreneurs with domestic constraints to become international titans. It made it practical for companies like Honda and Toyota to create just-in-time manufacturing to sell their products to America. It created global world powers like China. And it allowed you and I to order goods from anywhere in the world to our doorstep in 2-3 days.
The shipping container created a new world. A world where a manufacturer in Mexico could source goods from China through the Panama Canal, distribute the final product to a warehouse in Kansas, to be sold by a fashion e-commerce entrepreneur in New York on Shopify to an end consumer in the UK.
Today’s interconnected global economy wouldn’t be possible without it.
Although the benefits were obvious, its inevitable adoption didn’t come without a fight against the old system.
Which brings me to my first key lesson.
The economic benefits of any innovation do not come from the innovation itself, but from the entrepreneurs who put that innovation to practical use.
The irony is the entrepreneur who sparked this particular global shipping revolution knew nothing about ships. Malcom McLean changed the world for precisely this reason. As Jeff Booth likes to say, breakthrough innovations, discoveries, and entrepreneurs that change our world, come from outside the current system and force us to use a new lens to understand it.
Malcom McLean made his fortune in the trucking industry through his company McLean Trucking. Ironically, he sold it in 1955, after it became one of the largest trucking companies in America by revenue and profit, to completely pursue the shipping container.
It was an idea he couldn’t shake, but he realized he had to create an entirely new company to build an entirely new industry. The greatest innovations are all born out of an exponential leap into the unknown.
Malcom McLean was an entrepreneur from the time he was a child. At an early age, he learned business skills by selling eggs out of a crate on the side of the road, for commission from his mother. He was from Maxton, North Carolina, a poor, rural township in with about thirty five hundred people total. Although not rich, he was afforded many opportunities to make his mark because he was related to half the town!
Malcom naturally learned frugality and thriftiness by growing up through the Great Depression. He graduated high school in 1931, stocking shelves at a local grocery, and then as a gas station manager.
Like every great entrepreneur, Mclean learned that he could earn more money by driving the truck to deliver the gas to the gas station than he could working in the station. In 1934, McLean Trucking was born.
The company had humble beginnings. He would haul vegetables, dirt, and even trash to make money. There’s a story that he was once so poor that he couldn’t afford to pay the toll at a bridge on a trip to New York, and left his truck wrench as collateral to pick up after selling the load at his destination.
By 1935 at 22, McLean owned 2 trucks, a tractor trailer and employed nine people. By 1940, his fleet grew to 30 and the business grossed $230,000 in revenue. In 1954, the company held $11.4 Million in assets and owned 617 trucks.
But just like in 1934 at that gas station, McLean had a critical insight, this time, one that would change the world. Transportation’s fundamental value to a customer was moving cargo, in the cheapest and most efficient way possible. The medium itself was irrelevant.
After the American economy boomed post world war 2, so too did traffic congestion up the east coast where McLean Trucking’s routes were. Trucks would expensively sit or be stuck in traffic on busy expressways as there were few developed highways or infrastructure to support the transportation needs of the growing American population.
This sparked his next great idea:
What if they could put their truck trailers on ships, so they could ferry goods up and down the coast, instead of having the trucks do the expensive hauling?
This would circumvent the worsening traffic jams and improve margins for trucks, ships, and customers completely.
For container shipping to become a reality, it required an entire ecosystem of infrastructure and dramatically new ways of doing business altogether.
However, it wasn’t until there was an ecosystem surrounding the container that it actually began to change the world. Like all disruptive change, the existing system was not going to lay down willingly to be disrupted. Major barriers to this obvious innovation stood in the way — The ICC (Insterstate Commerce Commission), port labor unions, and the shipping and railroad industry titans.
The benefits of a new innovation may be obvious, but governments and existing powerful entities may delay the inevitable by imposing regulation to stifle adoption and protect the incumbents and their electoral base.
Which brings me to my second key lesson.
Entrepreneurs must push the boundaries of the current system technologically, legally, and socially to change the new system!
The federal Motor Carrier Act of 1935 brought interstate trucking under the authority of the Interstate Commerce Commission, the ICC, which had been regulating and protecting railroad profits since 1887. If a trucker wanted to begin a new service, it needed to be approved by the commission. Once approved, they were only allowed to haul commodities that the ICC allowed them to haul, over ICC approved routes, at ICC approved rates.
Their rules were not economically sound or efficient. They were simply there to impose order and maintain “stability” as they would say in public documents.
All major changes required public hearings at which the major railroad companies would object, after lobbying politicians to gain favorable outcomes. This forced trucking companies to charge much more than railroad companies, and disincentivized competition.
The ICC also had regulatory authority over domestic shipping, which had been in decline since the 1930’s.
In an astonishing move to circumvent regulators who opposed his proposals of allowing truckers to move containers via ship, McLean sold his company in 1955 in the first LBO or Leveraged Buy-Out on record, and created McLean Industries.
With the proceeds from the sale of the company he spent his life building. He purchased the Waterman Steamship Corporation for $42 million at a distressed valuation and gained access to 37 vessels, $20 million in cash, $0 debt, and 16 ports which he would lease to McLean Trucking to move cargo.
Railroads protested the transaction, but the ICC could find no legal fault in the transaction and could not block it.
After the transaction was complete, McLean knew that his existing fleet would need to be re-outfitted to match the vision he needed. So, he worked with the government to design a loan program to allow him to purchase seven new ships that could carry 288 truck trailers and reduce cargo handling costs by 75% overnight.
But McLean thought that although this was a breakthrough, there had to be a bigger innovation. So he commissioned a study.
What if costs could be further reduced by using specialized containers versus truck trailers?
His inclination was right.
The port analysts calculated that, for example, sending beer from New York to Miami through a traditional coastal ship would cost 94% more than the same goods sent through a container. And just like that, he needed to scrap his plan for the government funded ships.
McLean knew what he had to do. He had to convince the top container expert in the country at Brown Industries to build a prototype of these specialized containers to fit on a traditional vessel.
After some testing of two initial containers, McLean put his foot on the gas and ordered 200 containers on a hunch that if this could work for two containers, it could work for the whole world. His hunch was right.
With his containers onboard his Sea-Land (a McLean Industries subsidiary) ships filled with Coke, his last hurdle was convincing the American Bureau of Shipping and the US Coast Guard that the containers were actually safe. After trips through heavy seas showed the containers were functional in nature, they convinced them, and got approval to begin shipping.
Then there was yet another hurdle! How were they going to load the goods and the containers onto ships? The traditional wenches wouldn’t work. They needed to build their own specialized cranes, with trained crane operators to lift and move the cargo containers, without the need for workers touching the containers at all.
This was revolutionary. This improved the lives of tens of thousands of men, who previously worked in dangerous conditions at sea ports around the world.
Between December of 1955 and April of 1956, McLean Industries would complete 40 voyages and build the capability to hold 62 containers per ship. Think of the difference — a single ship carried 62 containers and encountered no hills, no stop lights, no traffic jams, and required far fewer crew than 62 trucks! Faster, cheaper, more reliable, and safer.
By the late 1960’s, just ten years after it’s conception, the shipping container network became unstoppable — its advantages obvious to everyone, even to those whose businesses were disrupted by it.
Unions fought it’s adoption, railroad titans protested, unelected governmental bodies came out of the woodwork to propose rules, regulations, standards, and taxes to thwart it’s ascent. But in the end, the innovation was too good to ignore.
The containers were a major success for McLean Industries, who surpassed $94 million in revenue by 1964, it was still a small, niche business compared to the larger players.
Mass adoption of containers would not be fully realized until America was in a crisis. A crisis that challenged fundamental assumptions embedded in it’s democracy and economy — the Vietnam War.
Which leads me to my third and final key lesson.
Despite the benefits, industries rarely change voluntarily. Most innovations are birthed when circumstances force it.
Sea-Land was one of the few carriers able to complete international transatlantic deliveries. Their first transatlantic voyages were rumored to contain over 90% military freight.
In 1965, the Vietnam war was in full swing when Lyndon Johnson order 65,000 soldiers to go to Vietnam. Every month 17,000 new soldiers were landing in Vietnam and the need for supplying the war reached a peak.
There were two major problems, Saigon was Vietnam’s only deepwater port, and there was no way to track the offloading of cargo when supplies reached Saigon’s shores.
Containers were the only feasible option that could help the US military cheaply and efficiently deliver mass quantities of goods quickly.
However, containers were only considered as a viable option when a lack of rations, ammunitions, and medical supplies had a major impact to the troops on the ground. The port logjams, lack of labor, and trucking options created mass chaos that saw supplies go missing or not be delivered at all at a critical time.
In 1966 Malcom McLean finally convinced government officials to leverage containers versus their Navy-owned merchant ships. After just a year of containerization, operations began running smoothly and the US government began immediately saving hundreds of millions of dollars.
The US government’s attitudes towards containers changed from an adversarial one to an optimistic one once they completely adopted the innovation and moved out of their own way.
Why tell this story? What does this have to teach us about Bitcoin and its adoption over the next two decades?
Bitcoin’s benefits, to those who look closely, are obvious. Like the container, Bitcoin is a soulless, inanimate network, that allows the global economy to cheaply and efficiently move value.
One Bitcoin transaction acts like a shipping container for money. It can contain thousands of individuals user payments (items in a container) to facilitate a value exchange for goods and services across time.
For business owners, these benefits are significant. Bitcoin provides everyday business owners with the ability to reduce credit card fees, settlement delays, fraud, chargebacks, avoid inconvenient banking hours, and to reduce cash flow issues related to the timing of cash receivables and cash outflows to run their businesses.
Why, for example, is a typical payroll cycle every two weeks? Why are we not paid when we deliver a service to an employer?
Why is a company not paid immediately by a financial intermediary once they deliver goods or services to a customer who does pays immediately? No, I’m not talking about a notification of payment. I’m talking about actual money in their account.
Like the expensive, slow, and error-prone warehouses that offloaded goods from ships and trucks before containers, and then loaded them onto trucks before the innovation of the shipping container did away with them, today’s financial system is an expensive and innefficient middleman that can be removed when Bitcoin is widely adopted.
However, one of the key barriers to Bitcoin’s adoption is that there are currently too few entrepreneurs like Malcom McLean working to make this innovative technology practical for everyone.
We need a mighty group of entrepreneurs working in Bitcoin. That is why the money currently funding all these silly Silicon Valley startup pump and dumps in Defi, Cefi, Wefi tokenomics is so badly misallocated. It builds nothing of value for actual businesses.
Bitcoin needs entrepreneurs looking to take risks, and create new valuable innovations. We don’t need incomprehensible and useless techno-babble about crypto. We need to make doing business easier, more reliable, and cheaper. We need to take full advantage of the improvements Bitcoin can make possible.
If you’d like an introduction to any one of these firms please reach out to me personally — firstname.lastname@example.org
Two additional things to recognize is that the existing system will try to block Bitcoin’s adoption with unnecessary rules, regulations, and laws.
The current financial system has no incentive to see the rise of an open, decentralized, uncontrollable, payment network available for 8 billion people on the planet.
They will pull out every trick in their book, from regulation to propaganda and disinformation, to outright banning Bitcoin to stop its ascent. Over a long enough time frame, these pursuits will prove themselves to be unsustainable as businesses and entrepreneurs embrace this technology that makes things better for them.
It may not be until the US dollar begins a structural decline against an alternative monetary system like BRICS, backed by commodities, that the US government will fully see the value of Bitcoin as a strategic asset to be leveraged and not banned. Competition allows innovation to shine through.
Regardless of what happens in the long-term, we must do our part today, as individuals, as entrepreneurs, and as small businesses to begin adopting Bitcoin as a tool for local and global trade.
At Swan Bitcoin, we’ve created Swan Business Solutions as a one-stop shop for Business Owners to buy, store, and receive Bitcoin to begin transitioning to running on a Bitcoin Standard.
I’ll leave you with a quote from Jeff Booth’s incredible article titled, Finding Signal In A Noisy World,
One cannot perfectly predict the future. But by studying the past, we can discern patterns to give us hope for the challenging journey ahead. We’ve been here before.
On April 26, 1956, the world changed forever with the shipping container. On January 3, 2009, the world changed forever with Bitcoin.
The future is right in front of you if you’re willing to see it. Don’t miss it.
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