volume trades will be to or from the United States because the United States accounts for 13 to 15 percent of total world trade.

The prospective trade growth will also affect vessels, as the later section in this chapter shows it has in years past. Increase in volume alone will require either more ships of current size configuration or a constant number of progressively larger ships, or some combination.

SUMMARY

World trade has grown rapidly since World War II in both value and tonnage. Barring worldwide depression or serious international exchange difficulties, this growth is expected to continue. These trends and their maritime impacts provide the context for this study of nuclear-powered vessels.

B. EMERGENCE OF INTEGRATED TRANSPORTATION SYSTEMS

The field of transportation is going through changes similar to the emergence of mass production techniques in manufacturing. The basic economic forces are the same in both fields.

From the viewpoint of the manufacturer, these techniques improve the profit picture by reducing the total unit cost. The increased investment in highly complex equipment is justified by intense utilization at high volume of both men and machines.

Rational design of such equipment leads to specialization. The assembly line and the unit train are both designed to handle one product at high volume. To maximize utilization, the support equipment is also specialized. Cargo handling gear, terminals and storage areas, and personnel are integrated into a single system which is controlled by management to produce the product or service at a lower more competitive cost.

The shipper must consider not only the charges for transport, but also his own related costs. Important among the costs is the value of time in transit, and it has led to an emphasis on speed and fast intermode cargo transfer. Inventory is a capital investment. Whether in a warehouse or in transit, the shipper bears interest on its value as long as the inventory remains in his ownership. In the case of production equipment such as computers and machine tools potential earning time is also important. Proper selection of means of transportation must consider the total time in transit as a relevant cost item. In the case of higher valued cargo and production equipment, transit time is an item as significant as packing charges and insurance.

As shippers have become more sophisticated in their calculations of total distribution costs, they exert further market pressure which leads to integrated systems in transportation. Although ships are an important component of such systems, equally important in the reduction of transportation cost and transit time are innovations in cargo handling, port configurations, and the rolling stock and facilities of inland transportation.

As a result of the economic forces discussed above, we would expect increased use of specialized transport equipment and the appearance

complex equipment aimed at high-volume production. Because the us of this report is the nuclear merchant fleet, the discussion foling relates to these changes in the ship itself. Equally as import, however, to the continued development of the merchant marine changes occurring in inland transportation and the coordination. specialized integrated transportation systems.

TRENDS IN GENERAL CARGO HANDLING AND CONTAINERIZATION mprovements in cargo handling designed to move general cargo o and out of ships more rapidly and economically have taken two c directions: (1) Substitution of portable preloaded containers, ters, pallets, and so forth, handled by shipboard or dockside nes for conventional break bulk stowage with boom and winch gear, 1 (2) capital investment in ships' cargo gear and stevedoring equipat to improve total cargo-handling productivity.

DEVELOPMENT OF CONTAINERIZATION

Proposals for various types of containerization of ocean freight date to sailing ship days while proposals for piggybacking of road cles on U.S. railroads go back to the early 1900's.

apid loading and unloading of ships by means of prestowed coners improves the shipping system productivity in at least three

S:

It reduces the handling costs and congestion, pilferage, and damby moving the handling of individual pieces away from the pier and reducing the number of times individual pieces away must andled.

It increases the productivity of the longshore gang at the ship 15 tons per gang-hour to 300 to 600 tons per gang-hour.

It reduces port costs by cutting down on the unproductive time ip has to spend in port and will ultimately cut down on pier and rf costs by permitting a much larger volume of goods to be lled per berth space provided.

long as transportation equipment remained relatively expensive pared to shipping, draying, and stevedoring labor, it was unecoic to use expensive containers in or on railroad cars and steamto save the labor costs. The failure to adopt unitized handling iques on either the oceans or the railroads until quite recently be attributed in part to the relative costs of labor and transportaequipment. Since the end of World War II, the relative costs of rand equipment have changed enough to make containerization piggybacking concepts increasingly attractive under cost factor itions in the United States and other developed nations.

e development of container traffic on ocean vessels and piggyback er and container traffic on railroads has been done almost entirely private capital. There was no significant Government help until authorization of subsidy to American Export Isbrandtsen Lines he conversion of two former ore carriers to full containerships for dized operation from the east coast of the United States to Europe.

The only readily available figures on the trends in the movement of container type traffic are those for the railroads' piggyback traffic (table 3):

1 Each car averaged about 1.6 trailers in 1964 and 1965.

The Sea-Land Co. has operated domestically in the coastal, intercoastal and noncontiguous trade from 1957 to 1966. On April 23, 1966, the company started service with three ships to northern European ports. The Sea-Land container pool has grown from about 4,000 in 1958 to a planned level of about 20,000 with the beginning of European service.

Matson Navigation Co. followed with containers to Hawaii in 1958. Break bulk operations had required frequent upward adjustment of rates. Some reductions in freight rates were made after containers were introduced. Although Sea-Land and Matson had the only combinations of large shore or ship based cranes with specially designed shipboard cells for stacking containers by early 1966, United States Lines, Grace Line, States Marine Line, Moore-McCormack, American President Lines and Alaska Steamship Lines also carried containers. These lines did not have fully developed systems as of the beginning of 1966.

The rapid growth of trailer-on-flatcar domestic rail traffic and the success of Matson and Sea-Land in noncontiguous trades are the best indicators that container traffic will eventually be widespread in world ocean trade.

The movement to unitized freight handling on an intermodal basis (railroad piggybacking and container transport of all kinds) has been underway domestically since the early 1950's. The movement now appears to be expanding rapidly into the foreign trade as well. It is reasonable to expect the growth in foreign trade to equal that achieved in the domestic trade because the savings will be as great if not greater than in the domestic trades.

Besides the U.S. firms already cited, at least two combines of European lines have already announced plans to enter container ships in the North Atlantic. Matson Navigation Co. and Japanese shipping firms are exploring the possibilities of full container ship services between the United States and the Far East and American Export Isbrandtsen Lines has filed an application for three high-speed container ships to link the U.S. east coast and Japan.

AMOUNT OF CONTAINERIZABLE GENERAL CARGO

All liner cargo except pieces longer than 35 or 40 feet (depending container size) and wider or higher than approximately 8 feet can handled in box containers. Lighter aboard ship (Lash) systems uld probably accommodate lengths to 50 feet, widths to 20 feet, 1 depths to 10 or 11 feet. Estimates of the percentage of total genl cargo which can be accommodated in containers varies with the son making the estimate and the trade route considered, but usually ges from 70 to 95 percent. The percentages are high enough that it be assumed that all liner type cargo may be carried on container ps for long-term forecasting purposes, i.e., specialized containers h as double height, double width, half height, half width, etc., may developed to handle most of current outsize cargo, and other means prepackaging can be used.

IMPROVEMENT IN SHIPS CARGO GEAR

The post-World War II ships built for the U.S.-flag fleet have inporated considerable improvements in standard cargo handling r and hatch cover design when compared to the war-built fleet. fost ships have 10 and 15 ton booms throughout, heavy duty ches, mechanically articulated boom positioning, power operated oner guys, and power topping under load. Hydraulically operd hatch covers are installed at all levels and in some cases also a vy duty, mechanically articulated, 50 to 60 ton boom serving two hes.

These improvements do two things when compared to the wart ship capabilities:

They reduce the time to rig out and stow cargo handling gear. They provide a faster cycle time from hold to dock with the more -nsive rigged gear.1

hese improvements have permitted the new U.S.-flag ships to w large enough cargo handling gains over their predecessor types ake the added capital expenditures worthwhile. The introduction ontainer ships promises to be a similar entirely new technology for in transportation.

STEVEDORING INNOVATIONS

hanization and modernization agreement for the west coast he International Longshoremen's and Warehousemen's Union WC) and the Pacific Maritime Administration entered into a anization and modernization agreement (M. & M.) about 512 years The longshore employers set up two funds to provide for early ement and unemployment pay in return for the right to freely duce laborsaving methods and equipment.

he introduction of the M. & M. agreement on the west coast re-d in a 40-percent increase in productivity per man hour during 511⁄2 years. This dramatic increase was obtained even though only son Navigation has gone to large-scale containerization.1

ilon, Ebel, and Goobeck, "Ship Design for Improved Cargo Handling," SNAME, 1962,

The M. & M. agreement is now up for renewal. The ILWU is not asking for renewal of the unemployment guarantee because there have been no technological layoffs. The union is instead asking for distribution of the existing $12 million fund built up but never used under th old agreement. The union is in fact insisting that the employers provide effort-saving machinery wherever possible. The union is threatening to increase gang sizes in holds not provided with machinery ir order to back up its demands for more mechanization.1

East coast agreement

The settlement between the International Longshoremen's Association and the east and gulf coast employers in the spring of 1965 made a small beginning toward regularizing stevedore employment and increasing productivity on the east and gulf coasts. The agreement provided for some very modest annual wage guarantees for unior members in three ports and for some reduction in gang sizes and flexibility in scheduling and assigning for the employers.

D. TRENDS IN SHIP SIZE, TYPE, AND SPEED

CARGO SHIPS

The trend toward the gradually diminishing importance of the allpurpose cargo vessel and the emergency of the large specialized carrier is illustrated by the trend in ship design since World War II in the United States. Table 4 shows the typical size and power requirements of the ships in the subsidized fleet starting with World War II cargo ships through the most recent ships being placed under contract and vessels proposed for the near future. The table indicates the trend toward high speed, large size, and high power requirements.

TABLE 4.-GENERAL CARGO SHIP TREND IN SIZE AND SPEED

It is a well known naval architecture axiom that increased speed is most economically achieved with longer ships. When larger (and longer) ships become economically feasible because arger volumes of trade are available, they can be designed for higher speeds more readily than the smaller ships they replace.

Cargo ships which best fit these characteristics are high-speed, fast turnaround ships carrying containers, barges or some other type of prepackaged freight to facilitate rapid loading and unloading. The container or barge carrying ship concepts offer several advantages over the conventional break bulk operations. These advantages result in

1 The Wall Street Journal, May 2, 1966, p. 2.