#101 1968 · Sea-Land Service · Container shippingpair-two-problems
Sea-Land's ships came back from Vietnam empty, so it filled them with Japanese TVs and helped launch trans-Pacific container trade
the problem
Container ships returning from Vietnam sailed home empty
background
In 1967 the US military hired Malcom McLean's Sea-Land Service to run a container service supplying the Vietnam War, paying for the full round trip regardless of what came back. The Vietnam contracts were hugely profitable on their own — 40% of Sea-Land's revenue in 1968/69, and $450 million in Defense Department business between 1967 and 1973 — but the eastbound leg of every voyage was wasted: six ships sailing home from Vietnam to the US West Coast with empty containers, the return trip already paid for and carrying nothing.
Standard practice was to treat this as a sunk cost and move on. Container shipping to Japan barely existed yet, and building a new trade lane from scratch — terminals, agents, customers, trucking — was normally a multi-year, capital-heavy undertaking that no one would attempt just to fill a few empty hulls.
the move
According to a former executive, McLean asked his team a single question: 'Anybody know anybody at Mitsui?' In March 1968 Sea-Land hired Mitsui group companies to build a terminal in Yokohama, serve as local agent, and handle domestic trucking, then began weekly sailings carrying Japanese televisions and stereos back to the US West Coast — cargo that was almost pure profit, since the ships' costs were already covered by the Vietnam contracts.
the payoff
By late 1968 the new lane was crowded rather than empty: seven competing carriers were chasing fewer than 7,000 tons of eastbound freight a month out of Japan. Sea-Land extended container service to Hong Kong and Taiwan in 1969 and to Singapore, Thailand and the Philippines by 1971 — commercial infrastructure built to soak up idle military capacity, in place just as containerized trade with Asia was about to take off. Economists at the time did not foresee how far falling shipping costs would drive the trade growth that followed.
what came after
The Yokohama route is cited in histories of container shipping (including Marc Levinson's *The Box*) as the improvised opening of the trans-Pacific container trade — a route born from an accounting quirk (a paid-for empty leg) rather than a deliberate bet on Japan's export rise, which nonetheless positioned Sea-Land as first mover on what became one of the world's busiest container corridors.
filed under
references
- [1]Forbes Global — The Box That Changed Asia and the WorldForbes, 2006forbes.com
- [2]Wikipedia — Malcom McLeanWikipedia, 2026en.wikipedia.org