In today’s global business arena, a company’s long-term survival often depends on its ability to innovate, to progress to the next level, to shape the future of an industry by finding better ways to serve customers.

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Not surprisingly, APL’s history of innovation is as multifaceted as it is long, thanks to the strong vision of leaders like Ralph K. Davies and W. Bruce Seaton. Just as the spirit of exploration had been the guiding force behind William Henry Aspinwall and Captain Robert Dollar decades before, the desire to innovate was central to the work of Davies and Seaton — and to the emergence of the company we know as APL.

Origin of an Icon

Although the origin of the APL name can be traced to the early 1920s, the company would not be known as American President Lines until an unusual series of events prompted subsequent changes of ownership.

The President Harrison, inaugurated Dollar Line’s round-the-world service in 1924. Click image for larger version.

The tradition of naming ships after U.S. presidents began in 1923, when Captain Robert Dollar purchased seven “president” ships from the U.S. government. Dollar used these vessels, along with the existing fleet of Dollar Line, to pioneer round-the-world service in 1924.

At the same time, the Pacific Mail Steamship Company could count more than 46 steamers in its extensive fleet, but lacked the strong, decisive management of earlier decades. In 1925, Dollar Line acquired Pacific Mail and dominated the marine transportation industry until the Great Depression.

The President Coolidge, an art deco masterpiece

Change of Fortune

A harbinger of the enormous changes to come, the two luxurious ocean liners Dollar Line ordered in 1929 — the Presidents Coolidge and Hoover — carried less than half the number of passengers they could accommodate on their maiden voyages in 1931.

Robert Dollar, then in his late 80s, had begun to rely on his son, Robert Stanley, to manage the company. To the casual observer, the decades-old family business appeared to be running smoothly. But increased government regulation of the shipping industry, rising labor costs, and damaging labor strikes soon put an enormous financial strain on even the most profitable of shipping companies. Dollar Line, in particular, was hit hard.

R. Stanley Dollar

By 1938, the Dollar Line fleet was worth $11 million, but the company’s liability was $17 million, and interest on the debt was accumulating at a rate of $80,000 per month. The newly formed U.S. Maritime Commission, headed by the ambitious Joseph P. Kennedy, judged Dollar Line to be unsound. Despite a characteristically tenacious effort on the part of R. Stanley Dollar, the government assumed control of Dollar Line and renamed the company American President Lines, Ltd.

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By the end of World War II, APL’s assets were $40 million — and the company had attracted the interest of Ralph K. Davies. Davies’ success in the volatile California oil business of the 1920s had earned him a reputation as a shrewd businessman. In 1952, he and his investors purchased American President Lines for $18 million.

Ralph K. Davies

Revolution in Transportation

Described as “an uncommon man, a perfectionist who demanded more from himself than from others,” Davies announced the purchase at a press conference with a statement signaling a new era for APL:

“I have long hoped to see this line back in responsible private hands. Its trade and passenger routes are world-encircling and its potentialities for development and expansion enormous. As a Californian, I am particularly aware of the significance of this vitally important company as a West Coast enterprise. It is our plan to strengthen and go forward with APL’s present progressive management. The company has uncommonly fine personnel. We look with high hope and confidence to the line’s future.”

Davies’ plans for APL included expansion, modernization, and a revolutionary concept for a very tradition-bound industry — containerization.

One of the first containers to be used for international trade.

To assess the world’s readiness for containerization, Davies sent a fact-finding team to 26 major ports in 1958. The report was positive, and Davies began to integrate the container into APL’s operations. By the time of his death in 1971, 58 percent of the shipments handled by the company were containerized. In 1973, APL took delivery of four fully containerized vessels.

Six years after Davies’ death, W. Bruce Seaton took charge of APL and expanded on the work done during the Davies years. Historian and author John Niven described Seaton as a man “ known for his expertise in international finance and keen insight into organizational behavior and function.” APL’s new leader took decisive action that resulted in significant innovations.

Modern containers are discharged, then transferred to stacktrains.

Creating an Intermodal Network

“Seaton recognized that if APL were to utilize the new container technology fully, it must extend control from the ocean shipment link in the transportation process to the domestic or landbridge link within North America,” according to Niven. This meant creating a seamless connection between the three modes of surface transportation — ship, train, and truck — so that shipments could move with greater speed and reliability than ever before.

Known as intermodalism, this expansion on the concept of containerization would not only bring the transportation industry into the present, but would also greatly facilitate future growth.

To achieve this seamless transportation network, Seaton relied on his ability to bring together people from what had traditionally been regarded as separate industries to work on a common goal. He aggressively recruited rail and truck transportation experts to work with international shipping specialists at APL. The result was the “stacktrain,” an innovation that doubled train capacity by stacking containers, two high, on specially designed railcars.

In addition to stacktrain technology, APL also introduced 45-, 48-, and 53-foot containers to the transportation industry.

With the advent of the stacktrain in 1984, APL introduced the concept of containerization to the U.S. domestic transportation industry. This paved the way for the precise integration of domestic and international shipments and solidified APL’s reputation as a market leader in brain power.

The Legacy Continues

The momentum of the Seaton years has continued at APL with significant innovations in naval architecture and terminal operations. To learn more about the company’s recent history — including how APL has used information technology to enable customers to work smarter — please continue to Prosper.