Technology matters for trade freight transport

On February 14th, 1889, the first trainload of oranges pulled out of Los Angeles heading for the East. The first transcontinental railroad had been completed 20 years earlier, when the Union Pacific and the Central Pacific railroads were ceremonially linked by the golden "last spike." The new opportunities it brought for freight transport were immense. In the year of its completion the population of Los Angeles was only about 1,600, but given rail transportation it could grow and prosper. Its climate, with irrigation, was ideal for valuable fruit such as oranges.

Even before the transcontinental railroad's completion, when the line had reached Abilene, ranchers drove cattle that sold for $4 in Texas along the Chisholm trail to Abilene and thence by rail to Kansas and the Midwest, where they could fetch $40. An estimated 5,000,000 head of cattle passed along that route. The availability of low-cost and rapid transport has had a huge impact on the wealth-creating properties of trade, both within countries and internationally.

In Britain the railways facilitated the transport of millions of tons of coal from the pits of the Northeast in places like Newcastle, to the factories of its Industrial Revolution, and enabled the manufactures of those factories to be transported both to their domestic markets and to the ports for export to their international markets.

Internationally, the invention in the late 1800s of the double- and triple-compression steam engines, combined with the screw propeller to replace paddle wheels, led to the development of fast, efficient freighters to convey the grains of the American Midwest to hungry mouths in Britain and Europe. The free trade enabled by Britain's 1845 repeal of the Corn Laws needed the technology of better transport to make its impact in lowering food prices.

More recently Malcolm Mclean revolutionized freight transport in 1956 with his invention of the shipping container. Given its ease of loading and unloading onto ships, and its ability to travel on trucks and rail freight carriages as well, it dramatically lowered the cost of transport, and greatly expanded international trade. It gave landlocked countries access to international trade by enabling them to transport containers by land to ports beyond their borders. The invention of the container played a major role in the globalization of trade in the second half of the 20th Century.

The lesson today is that even as we liberalize trade by lowering barriers and tariffs through free trade agreements, we should also be making it easier for new transport technologies to facilitate international and domestic freight transport and lower its costs. The imminent advent of driverless trucks and ships, and of cargo-carrying drones, portend the continuation of evolving transport technologies that will decrease transit times and lower costs. That first trainload of oranges 130 years ago was but a landmark on a continuing journey.