You've got to get the through put out of that berth. So it's got to be scheduled in.

Question. How many ships can be accommodated at each berth?

Answer. One. Can I shoot a question back? How do you imagine that one could use more than one ship at a time on a terminal? A pier? Well, I would call that four berths, wouldn't I?

Comment. When you were saying "berth," I was wondering whether you meant a pier or a dock.

Mr. EDWARDS. No. It's a length of quay wall-put it that way. I've got some plans here which I can leave with you, if you like, showing the layout; and I've also brought a little brochure that I've been handling out to people that I've spoken to. If anyone would like them, they'll be here. You can have one. The straight quay wall, that I've been talking about, is about 2,700 feet long, and we tentatively called that three berths and any three ships, of course, can run alongside that at any one time.

Mr. SCHMELTZER. How do you keep track of the containers in the port area and control the movement through the pier and onto the ship?

Answer. They're not computerized at the moment but they almost certainly will be. We've got a third-generation IBM computer, be pleased to know. We are quite well up in the computer field and unquestionably the control of them will be computerized.

Question. Is the container evolution moving too quickly and is it going to cost too much in the way of new ships, new container equipment, and so forth?

Answer. I think that in anything like this we've got to face up to the fact that a number of people are going to burn their fingers. I think they're rushing in, but how does one stop it? When I was in the aviation world, everybody started buying jet aircraft long before the piston aircraft was ready to go out. But they've made money on it in the end. The public liked the jet. They liked them to ride in and they started using them more and more. You'd have an awful job to sell a piston engine aircraft to the public now. But a lot of people took a lot of hard knocks in that transition. I think this life is made up these days of keeping up with the Joneses. It's got to be.

Mr. SCHMELTZER. Before the next question, I should like to say that part of Mr. Edwards' remarks appeared to be based on the McKinsey Report that was done for the British Harbour and Dock Board. We will put a copy of that in our library and anybody who wants to borrow it on a 3- or 4-day basis can do so. It's rather a remarkable report. It's utopian; there's no question about it. It talks about 25 ships serving the whole North Atlantic. You can read it and see for yourself what a management concern predicts for the North Atlantic routes in a number of years. I was right, wasn't I, Mr. Edwards?

Mr. EDWARDS. Yes, this is true. It was done. Actually the correct name of the organization is the British Transport Docks Board and that is a nationalized organization. It's owned by the state and they run a number of ports in the country. This inquiry was commissioned by them and it is unquestionably a statistical study which takes, in my

view, a very little account of a lot of management difficulties that are always with us. It makes a utopian sort of picture. Enormous quantities of cargo are, in fact, satisfactorily containerized. Never a ship gets out of place. You never get a storm on the North Atlantic and this sort of thing. It does sort of give an ultimate goal result which, in my view as a practical man, having to try and sell a port and make a port work, I think is too utopian for anything and I wouldn't base my port judgment on the result of that report. But it is a theoretical study, in a way, of things that could be achieved if everything worked right-right at the right moment.

Mr. SCHMETZER. Do you think it has value?

Answer. It has value in that it makes people think. It makes people sit up in their chair and say, "Well, good heavens, if this happens, what is going to happen?" But if this sort of thing was really thought of as being accurate by the workingmen in our docks, there would be another revolution of another kind, of course. The number of men to be employed in operating 50 ships or 75 ships from America to Europe wouldn't exactly please your people, I'm sure; and I'm quite sure it wouldn't please our people in Europe.

Mr. SCHMELTZER. Will containers on wheels be replaced entirely by lift-on/lift-off containers without wheels loaded into intercells? Is there any preference in international transportation for the trailer on wheels?

Answer. I don't know. I don't really feel qualified to compete with some eminent firms who are spending fortunes in trying to decide the answer to this one. If I venture a personal view on it, I think that the individual container on its own set of wheels will disappear in time because I can't help feeling that the wheels are superfluous and wasteful of space. It precludes every reasonable stacking. It precludes the idea of an automatic stack of computerized controlled containers. You can't, or I wouldn't think you could, do it on wheels. I don't know. I think that eventually the wheeled ones will go.

Mr. SCHMELTZER. Will they go in the short trades? The cross-channel trades? Isn't the disappearance of the onwheels a function of the length of the trade?

Answer. I think it is very largely. One is a function of the other. The speed on the short distance is a loss of cargo space and that isn't so much of importance. I think they will stay longer in the short seas than in the long deep-sea routes.

Mr. SCHMELTZER. What is the attitude of the trucking and railroad industry to containerization in Europe?

Answer. Well, I can't really speak about Europe, but I will say that in the United Kingdom our railways are nationalized and the present leaders of the railway, I think, see that the best future that the railways have got lies in the development of liner trains for container services. There is a very considerable development of container services for inland use at the moment and they are working very hard on connecting this onto the sea routes. I think that there is no question that many containers will go on rail and will be welcome. So far as the trucking people are concerned, this is another kettle of fish because there are so many individual trucking companies in the United King

dom and, of course, the container operation may sound the death knell to the local pickup carriers. The little man is going to have a pretty rough time. So I will say I think there will be opposition to a development on the road. They will come, I'm sure of that. There will be difficulties that way.

Mr. SCHMELTZER. Is there a need for dialogue in the nature of conventions between ports throughout the world, between transport organizations throughout the world, to clear away the differences in how these container systems will work?

Answer. Well, this I think is ideal if it can be brought about. It would be something we all ought to go for. It's a very difficult thing to do, is it not? You get all sorts of interests involved. Sometimes if you go for that sort of thing too much you can delay things, because somebody will sit out on the sidelines and not go along with it and throw a spanner in; and if you've really got into this sort of situation, it can hold things up as people will have a go on their own. I think it's highly desirable if we got that utopian society, which I'm afraid we haven't got yet.

Question. If there is no price incentive or rate incentive to shippers, what are the incentives and will they be sufficient? Is it likely that "freight, all kinds" rates will come?

Answer. Well, in answer to the first one, Dr. Mater, I don't think that what I said is what you interpreted it to be. What I said was if containers are really going to develop, then the shipowner, the containership operator, has got to offer some freight inducements. I said that at the moment I was not aware of the fact that they were doing so. They were saying that they would hold the situation at the moment, but they were not dangling anything in the way of a carrot at the moment by saying they will bring the rates down. If they're really going to succeed in the container era, not only are they going to hold rates; I think they've got to bring them down. I think, too, that in the long term, there are bound to be "FAK" rates.

Mr. SCHMELTZER. Mr. Edwards, that's music to my ears and I suppose Dr. Mater's ears. Any other questions?

Question. Is the equipment, the tractor-the motor power equipment-in England adaptable with the tractor equipment in the United States?

Answer. I really can't answer this because in the Port of Liverpool we haven't got any of these wheeled containers in operation in the port. They're all lift-on lift-off at the moment. I wouldn't think there would be any difficulty at all in this respect in getting them to join up.

Mr. SCHMELTZER. I think Mr. DeCerbo is talking about the truckthe drayage unit that pulls the containers away.

Mr. EDWARDS. What do you call them-the towmaster, tugmaster, or something?

Mr. DECERBO. We call them tractors.

Mr. EDWARDS. You call them tractors. No, I don't think there are going to be any difficulties in this. Insofar as the things we are using, we are proposing to use, for moving them about the straddle carriers those are, in fact, American design anyhow. They're Clarks that we're using.

Mr. DECERBO. No, I'm talking about moving the container 10, 15, maybe 30 miles away from the port to the highway.

Mr. EDWARDS. You mean if you've got a prime mover attached to a wheeled container? I can't say that there is going to be any difficulty about this. The link gear will have to fit. There's no reason why we shouldn't use American equipment, if necessary.

Mr. SCHMELTZER. DeCerbo is a refugee from the trucking industry. Last question.

I believe that most of the intermodal containers being built are being built to international standards. Is this true?

Answer. Well, I hope this turns out to be right.

Mr. SCHMELTZER. Thank you very much for a very enlightening discussion.

SEMINARS ON THE CONTAINER REVOLUTION

OCTOBER 30, 1967

IV. A FOREIGN FLAG CONSORTIUM LOOKS AT
THE CONTAINER REVOLUTION

(Mr. Otto Porton, North American General Manager, Atlantic Container Line, Ltd.)

When Ed Schmeltzer asked me to talk to you on the subject "A Foreign Flag Consortium Looks at the Container Revolution,” I took a hard look at that sentence and in particular at the word "consortium." The American College Dictionary describes consortium as "a combination of financial institutions, capitalists, etc., for carrying into effect some financial operation requiring large resources of capital." If one thing is certain about what we now call the container revolution, it is that it requires large resources of capital. Those who foresaw this container revolution were therefore faced with the problem of raising this huge capital. With the North Atlantic trade having been what it was during the last 5 years, raising this capital requirement was not an easy task as most of the lines found their reserves very well depleted. For them it therefore meant that if they wanted to go the route alone, they had to go into debt to a substantial extent. Many of the lines moreover found themselves in the position the airlines faced when the first jets came on the market. Many of the airlines had just heavily invested in the improved DC-7 models and were suddenly confronted with the necessity to switch over from propellerdriven planes to jets. Likewise, shipowners with newly built conventional vessels found themselves in a situation where these new vessels were no longer suitable to deal with the demands for container space. So new ships had to be built, ships that were new in design, where no mass production techniques could be applied and which had all the initial costs and headaches-of prototypes. The ships alone, however, were not enough any more in the new concept. Having noticed no great rush on the part of the shippers or forwarders to invest any money in containers and rolling stock, the lines had to make further substantial capital outlays for the supporting equipment. Although figures vary from company to company, it can be said that the capital investment in containers and rolling stock to support four vessels of the Atlantic Container Line type is about equal to the cost of nearly three ships.

Building new vessels and buying equipment, however, was only part of the problem. It became rapidly apparent that the present terminals used in the various ports were unsuitable for a modern container operation. The main reason was that they did not afford sufficient upland space for the storing of containers and rolling stock. Addi