I found this passage from the article interesting:
"This new economic geography allowed firms whose ambitions had been purely domestic to become international companies, exporting their products almost as effortlessly as selling them nearby. If they did, though, they soon discovered that cheaper shipping benefited manufacturers in Thailand or Italy just as much. Those who had no wish to go international, who sought only to serve their local clientele, learned that they had no choice: like it or not, they were competing globally because the global market was coming to them... In 1956, the world was full of small manufacturers selling locally; by the end of the twentieth century, purely local markets for goods of any sort were few and far between."
The author of the book mentioned a few times that some parties were not happy with the containerization of shipping and transportation. This development made markets that had previously been dominated by local companies, available to international companies. This passage shows that even though some companies may have been unhappy with this change, they were forced to accept it. If companies chose not to expand their trade internationally they were at a disadvantage to those who did. Not only would more goods be in the market, making it more competitive, but they would not be taking advantages of international markets where they could also sell their goods. I think it is interesting that as innovation advances a market, some people are not happy with this because it is not beneficial to them. It is also interesting that even though these people do not agree with the change, they are forced to engage in the advance to remain competitive.
Another passage I found interesting was the following:
"The importance of innovation is at the center of a second, and rapidly growing, body of research. Capital, labor, and land, that basic factors of production, have lost much of their fascination for those looking to understand why economies grow and prosper. The key question asked today is no longer how much capital and labor an economy can amass, but how innovation helps employ those resources more effectively to produce more goods and services. This line of research makes clear that new technology, by itself, has little economic benefit. As economist Nathan Rosenberg observed, 'innovations in their early stages are usually exceedingly ill-adapted to the wide range of more specialized uses to which they are eventually put." Resistance to new methods can impede their adaption... The economic benefits arise not from the innovation itself, but from the entrepreneurs who eventually discover ways to put innovations to practical use--and most critically...from the organizational changes through which businesses reshape themselves to take advantage of the new technology."
I liked this excerpt from the chapter because it emphasizes the importance of innovation. We are reaching a point where increases in capital, land and labor do not fluctuate significantly and I think innovation drives the improvement of markets. Innovation helps improve the way that these resources are used and this makes them more effective. The definition of economics is defined as the allocation of the world's scarce resources. Capital, land, and labor are these resources and innovation is a way that one can allocate these resources more effectively. I found it interesting that sometimes a market will not see the benefits of innovation until a while after it was created. I think this relates to those who did not want the containerization of transportation to take place because it would stifle their local market advantage. It is also interesting how though the innovation is available, it may not be put into effect until someone figures out a way to make it practical.
The author of this book believes that the development of the shipping container contributed greatly to globalization. He believes that the shipping container is often overlooked with trains, ships, airplanes and trucks often emphasized in the transportation industry. I think the author looks at the shipping container as the tool that made ships, trains and trucks able to be integral part of the transportation and shipping. I agree with this, because the shipping container allows for goods to be transferred from all of these different types of transportation without extensive labor and fairly cheaply. I think that the shipping container was a key component in making the cost of transportation of goods much lower. This decrease in the cost of transport allowed for increased globalization. I think that Levinson describes this process well in the following quote:
"When transport costs are high, manufacturers' main concern is to locate near their customers, even if this requires undesirably small plants of high operating costs. As transportation costs decline relative to other costs, manufacturers can relocate first domestically, and then internationally, to reduce other costs, which come to loom larger. Globalization, the diffusion of economic activity without regard fro national boundaries, is the logical end point of this process. As transport costs fall to extremely low levels, producers move from high-wage to low-wage countries, eventually causing wage levels in all countries to converge."
One can see from this quote that as transport costs decrease, globalization increases. I think the shipping container contributed greatly to the decrease in transport costs, thus affecting globalization.
With every change, there are winners and there are losers. With the development of the shipping container, many people benefited while others did not. There were many that lost out when the shipping container came around. These people included the enormous amount workers who made there living loading and unloading ships. Also, merchant mariners who shipped out to see the world now only got to stay a few hours in port while their ship was unloaded and loaded. Workers in trade unions also did not benefit; Before the container they could negotiate continuous improvement in water and benefits, but with the container, employers could threaten to export labor because it was cheaper elsewhere. This is a way in which employers were winners as they now had much more bargaining power over workers. The final group of people that found the switch to shipping containers disadvantageous was the customs inspectors and security officials. These officials could not check all the containers to make sure what was on the manifest was accurate, making it easy to smuggle things in and out of the country. While there were losers, this innovation in the transportation market also created many winners. Importers and exporters could transport things to other countries much more easily. Manufacturers were also able to decrease their inventories because items were shipped out much faster. Consumers were also a winner at this time. Consumers had many more choices. Due to the inexpensive imported consumer goods, the standard of living increased around the world as consumers could by cheaper things more specified to their needs.
Finally, I'd like to discuss cities and towns that gained and lost because of the shipping container. Maritime commerce cities did not benefit from this change. These cities were found unnecessary or unsuited for container trade and their population rapidly decreased. Winners included harbor towns that could become world ports if the invested in accommodating container trade. New ports were made in countries that didn't have ports before. Also small towns could sell land to manufacturers for cheaper than in cities, and without the high cost of transportation holding them back, manufacturers could now purchase this land. It is evident that the development of the shipping container brought about many changes in the transportation market. Some people found this change to their advantage and some didn't, but it has change the cost of transportation forever.
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