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Practical Use of New Ideas Will Reduce Costs By H. E. Stocker* business is better known as modern industrial management, not scientific management. The ad- vocates of scientific management are often slurringly referred to as “‘effi- ciency experts’ and frequently this criticism is entirely justified be- cause they miss the main point. The scientific method applied to business is simply a well proven tool for the finding of facts and not a doctrine nor a panacea. It has been demonstrated in ship operations that the scientific method produces savings and profits over and above good but ordinary management methods. In one case the long time ships were in port caused an executive to investigate the schedule because he knew that the first principle of eco- nomical transportation is that time at terminals should be reduced to the minimum. A thorough analytical in- vestigation confirmed his belief that the number of ships needed to main- tain the schedule could be reduced by reducing time in part and a 25 per cent saving in operating costs resulted. Understanding of transportation principles and the scientific method of analysis were responsible for this result. The Black Diamond line increased the speed of its ships 40 per cent ana at the same time obtained a lower fuel consumption by scientific analysis and experimentation guided by the progressive point of view which is the essence of all science. Duplicating these performances in other s*camship lines and backing up such operating achievements with similarly effective management of eargo handling and traffic will put many 2 line in a thoroughly sound business condition and assist our foreign trade. Te scientific method applied to Reception to New Ideas The scientific point of view requires that one be always on the alert for new ideas to cut costs and improve revenues, This may be illustrated by the use of skid platforms for ship- ping firebrick. Formerly the brick was shipped loose, much of it was broken and chipped in transit. A great deal of waste resulted from the lack of proper packing by the fre- Abstract of address by H. E. Stocker before the Foreign Trade Club of New York University, New York City, on May 2, 1934. 30 peated rehandlings. Skid platforms were in use in manufacturing plants for handling and shipping a large variety of materials and had proved an effective means of reducing handling costs and breakage. It therefore seemed logical, to solve the problem, for the steamship company to provide skids at the port and unload the brick from the car to the skids, The bricks on the skids were held in place by steel strapping and then handled through to con- signee in units of 5000 pounds in- stead of 9 pounds, the weight of one brick. The results were a 40 per cent re- duction in stevedoring costs, almost complete elimination of chipping and breakage and an increase of 400 per cent in the amount of brick moved by the steamship company because of better handling than by competitors. That is an excellent example of ideal transportation service. A con- structive idea adopted from another industry and put to use for the bene- fit o¢ the shipper, consignee and, the transportation company. The speed with which new ideas are accepted is itself very important. In packing and refrigeration revo- lutionary developments are occuring and undoubtedly will continue to oceur because of the active research work which is being done to find better ways to pack commodities and better ways to transport perishables. Those will profit the most who are the quickest to learn about and adopt these new developments. Development of packing which is adequate and yet economical in transportation charges is an import- ant factor in increasing the market- ing of merchandise. The transporta- tion charges on the package itseif should be kept to as low as possible consistant with its proper function. Take the case of a shipment of candy. The shipper formerly used 200 pounds of boxes to ship a 1000 pound order. Since the freight rate was 44 cents per 100 pounds, he paid 20 per cent of the total freight charges for tre nsporting the packing. Using small steel containers supplied by the rail- road without extra charge, he was able to reduce his boxing costs and save almost 20 per cent in freight charges because the container gave adequate protection against damage. The ideal in packing is the com- plete elimination of packing, Para- doxical as that sounds that is exact- ly what has been achieved in ship- MARINE REvieEw—August, 1934 ping automobiles. They are handled and stowed for export, intercoastal and coastwise shipment on their own wheels without packing. Even when shipments move in railroad cars to the port, the dunnage problem is taken care of by the new railroad ears fitted with special loaders. The best way of lowering trans- portation costs is to develop and ap- ply methods which cut the transpor- tation companies costs and permits them in turn to share this saving by reducing their charges not only with- out loss but with additional profit. Progress of Transportation The extension of foreign markets does not alone concern packing, re- frigeration, rates, tariffs, financing, insurance and a merchant marine. It also concerns the progress of our whole national transportation sys- tem for a great portion of our for- eign trade moves to and from in- terior points. In the past transporta- tion has been managed and legislat- ed upon in a very disjointed manner. We are now considering transporta- tion in a national and international sense, including all forms of trans- portation and considering the rela- tion of the various parts to the whole and to the ultimate objective of ob- taining the most effective transpor- tation system for our economic life. Never before has_~ transportation been so considered and never beforé has there been as great interest and as great an understanding of the need for a well balanced up to date transportation system. Transportation has progressed in every particular but the rate of prog- ress has been very uneven in the va- rious divisions of transportation Alert men and women interested in foreign trade and alert transporta- tion men will gain greatly by the ac- celeration of the transportation revo- lution in all divisions of transporta- tion. Replacing obsolete methods and equipment with the new develop- ments in technical and managerial phases of transportation will be of inestimable value to our foreign trade, With the sailing from New York of the S. S. CARRILLO on July 17, the United Fruit Co. began a series of 12- day cruises to the tropics. These cruises are limited to 40 passengers, thus insuring each passenger personal attention on the trip. The 8. S. CARRILLO will be joined in these cruises by her sistership, the S. 8S. Tivives. Both 12-day and 20-day cruises are available to passengers. In the item on the appointment of Capt. Alf Adler as commander of the S. S. SAntTA RoSA of the Grace line, which appeared in the July issue of MARINE Review, his age was erroneous- ly given as 31. It should be 36.