Virtually every business, from grocers to jewelers, depends on the shipment of materials and goods to operate. Innovations in shipping have increased profits to corporations and savings to consumers. Modern technology enables shippers to load, ship, and unload much larger quantities in a much shorter time than was previously possible, thus providing volume savings and labor cost reductions. It has also enabled the rise of new kinds of businesses, such as warehouse stores, that depend on large inventories.
Many shipping companies had been established in the United States by the mid-nineteenth century, when steamships plied inland waterways. On land, many regional and intercity horse-dependent delivery companies such as the fabled Pony Express briefly flourished. Most interstate cargo was shipped by rail, especially following the end of the U.S. Civil War. Shipping could be a very slow process, and refrigeration was unknown, placing limits on what could be shipped. Farmers and manufacturers were at the mercy of often monopolistic owners who imposed large tariffs. As the twentieth century progressed, trucks became a factor in shipping, although rail retained its dominance into the middle of the century.
By the 1930’s, airlines also had become a factor, often competing with the United States Post Office (later U.S. Postal Service) in the shipping of mail and small packages. Before delivery companies bought their own fleets of planes, they had contracted with commercial airlines to carry small freight items on passenger flights. For trade from the United States to most other countries, shipping by sea was the only available method until commercial aviation became feasible.
After World War II, the shipping industry grew rapidly. Inexpensive ships that had been built for the war effort were available for purchase, and world trade was expanding significantly. Numerous new shipping companies came into being. However, loading and unloading goods from all means of transportation remained a protracted process, driven by manual labor. Loading and unloading a single multihold ship, for instance, could take many days, with shifts of men working long hours.
This time-consuming, laborious process was completely transformed as a result of the development of
Containerization reduces the loading and unloading times of cargoes from several days to a matter of hours. Another advantage of the system is a reduction in theft from cargoes. It has also enabled the “big box” discount and warehouse chains to thrive. Target, Home Depot, and especially Wal-Mart are leading users of shipping containers. Refrigerated containers allow for the shipping of fresh produce from far-off locations. Special container ships were designed to take advantage of the system, and shipping costs were drastically reduced. At most ports, the use of containers accounts for almost 100 percent of cargo, except in the case of large items such as automobiles.
Ever larger ships became the norm, including huge oil tankers that were in excess of one-half million tons. These ships led to the construction of new ports and terminals to accommodate such behemoths. Ship-to-ship and ship-to-shore communication became more sophisticated with the emergence of satellites. The latter part of the twentieth century saw more innovation in shipping than any other historical period.
A tugboat sails past a cargo ship loading and unloading containers at the Port of Newark, New Jersey, in 2008.
Another of the leading shipping companies is
Among other major players in the express delivery field are DHL Worldwide Express (international only) and Airborne Freight Corporation. Although the leading express delivery companies account for a large share of their niche market, bulk shipping is still done via railroad, maritime vessel, and truck. Many railroad companies even have reduced or eliminated their passenger traffic to devote their resources solely to the shipment of cargo. The United States Postal Service also continues to be a major factor in the delivery of packages.
Brannigan, Martha. “Air-Freight Firms Gain Unexpectedly from an Expired Federal Excise Tax.” The Wall Street Journal, January 3, 1996, p. A4. Describes a loophole that was created by the expiration of a tax, resulting in an increase to the profitability of air freight companies. Frock, Roger. Changing How the World Does Business: FedEx’s Incredible Journey to Success–The Inside Story. San Francisco: Berrett-Koehler, 2006. Well-written, but subjective, history of the founding of FedEx by Frederick Smith and of the successes and reverses it endured before becoming a mega-company. The author is a former general manager of FedEx. Niemann, Greg. Big Brown: The Untold Story of UPS. San Francisco: Jossey-Bass, 2007. Insightful account of the history of UPS from its founding in 1907 by Jim Casey to the current time. Sigafoos, Robert A. Absolutely Positively Overnight: The Unofficial Corporate History of Federal Express. 2d ed. Memphis, Tenn.: St. Lukes Press, 1988. Relatively objective history of FedEx that was apparently not well-received by the company as a result of its sometimes critical slant. Trimble, Vance H. Overnight Success: Federal Express and Frederick Smith, Its Renegade Creator. New York: Crown, 1993. Somewhat negative portrayal of the growth of FedEx that presents a counterbalance to the generally more positive accounts that have been published.
Air transportation industry
U.S. Postal Service
Transatlantic steamer service