“The Truck Driver Who Reinvented Shipping” by Anthony Mayo and Nitin Nohria

Reference: Harvard Business School

Malcolm P. McLean, a truck driver, fundamentally transformed the centuries-old shipping industry, an industry that had long decided that it had no incentive to change. By developing the first safe, reliable, and cost effective approach to transporting containerized cargo, McLean made a contribution to maritime trade so phenomenal that he has been compared to the father of the steam engine, Robert Fulton.

As a youth growing up on a farm in a small town of Maxton, North Carolina, McLean learned early on about the value of hard work and determination: His father was a farmer who also worked as a mail carrier to supplement the family’s income. Even so, when young Malcolm graduated from high school in 1931, the country was in the midst of the Depression and further schooling was simply not an option. Pumping gas at a service station near his hometown, McLean saved enough money by 1934 to buy a second-hand truck for $120. This purchase set McLean on his lifelong career in the transportation industry.

McLean soon began hauling dirt, produce, and other odds and ends for the farming community in Maxton, where reliable transportation was hardly commonplace. Eventually, he purchased five additional trucks and hired a team of drivers, a move that enabled him to get off the road and look for new customers. For the next two years, his business thrived, but when poor economic conditions forced many of his newly won customers to withdraw their contracts, McLean scaled down his operation and got behind the wheel again.

During this setback in his life, when he almost lost his business, McLean came across the idea that changed his destiny. The year was 1937, and McLean was delivering cotton bales from Fayetteville, North Carolina, to Hoboken, New Jersey. Arriving in Hoboken, McLean was forced to wait hours to unload his truck trailer. He recalled: “I had to wait most of the day to deliver the bales, sitting there in my truck, watching stevedores load other cargo. It struck me that I was looking at a lot of wasted time and money. I watched them take each crate off the truck and slip it into a sling, which would then lift the crate into the hold of the ship.”1 It would be nineteen years before McLean converted his thought into a business proposition.

For the next decade and a half, Mclean concentrated on his trucking business, and by the early 1950s, with 1,776 trucks and thirty-seven transport terminals along the eastern seaboard, he had built his operation into the largest trucking fleet in the South and the fifth-largest in the country. As the trucking business matured, states adopted a new series of weight restrictions and levying fees. Truck trailers passing through multiple states could be fined for excessively heavy loads. It became a balancing act for truckers to haul as much weight as possible without triggering any fees. McLean knew that there must be a more efficient way to transport cargo, and his thoughts returned to the shipping vessels that ran along the U.S. coastline. He believed “that ships would be a cost effective way around shoreside weight restrictions . . . no tire, no chassis repairs, no drivers, no fuel costs . . . Just the trailer, free of its wheels. Free to be lifted unencumbered. And not just one trailer, or two of them, or five, or a dozen, but hundreds, on one ship.”2 In many ways, McLean’s vision was nothing new. As far back as 1929, Seatrain had carried railroad boxcars on its sea vessels to transport goods between New York and Cuba. In addition, it was not uncommon for ships to randomly carry large boxes on board, but no shipping business was dedicated to a systematic process of hauling boxed cargo.

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