Consider how your blender got to your kitchen counter. Steve Rubin does it all the time, but then he is the president of Seacastle Chassis. His entire job is to know the transportation industry from top to bottom.
When a store, say Wal-Mart, needs blenders, it has its buyers place orders at a manufacturing plant overseas. Wal-Mart then calls a shipping company with an order to move a certain number of units in a certain number of containers that eventually will go by ship to the United States. Once here, the containers will likely be loaded onto rail cars and from there onto trucks that will take them to (and eventually from) a distribution center. From there, goods are trucked to the store and the blenders put on the shelf.
Containers are moved in massive numbers. Seacastle comes in wherever one of them leaves a ship or a train and needs to be put on a truck. Or, more accurately, on a chassis — which is, as Rubin unsentimentally puts it, a steel frame with eight rubber tires. When you see a semi tractor trailer rolling down the road, you are seeing a shipping container that’s been mounted to one of those steel frames.
And it’s a good bet that Seacastle is behind the chassis that carries it. The company, which is the result of a near-$1 billion merger with Interpool in 2007 (see main story, page 36), is the largest lessor of chassis in the world. The company was born from a deal between container ship lessor Seacastle Holdings, Interpool, and Carlise Leasing International, which leased refrigerated containers.
Marty Tuchman, who ran Interpool, concurrently ran Trac Lease, which was Interpool’s chassis leasing arm. Seacastle, says Rubin, is a rebranding of Trac Lease under Seacastle Inc., based in San Francisco. Seacastle Inc. is one of the world’s largest lessors of intermodal equipment, leasing containers and container ships, in addition to the chassis.
Rubin, a New Jersey native, was named president of Seacastle Chassis after the merger. Rubin grew up in Randolph, near Morristown, the son of a father who worked for the Department of Defense and a mother who worked for the state DOT. He graduated from Penn in 1984 with a dual bachelor’s in history and economics. He later earned his MBA from New York University and began his career overseas.
Rubin taught English in Japan, which at the time was being viewed a lot like China is now, as the world’s next dominant economic power. “In the late 80s people thought Japan would take over the world,” Rubin says. Japanese investors had bought acres of top-echelon commercial real estate on the west coast, particularly in Seattle, and had bought Rockefeller Center in Manhattan. Always with a head for international business, Rubin wanted to understand the Japanese culture and be part of its economic renaissance.
Rubin got his MBA and landed an accounting job with KPGM in New York. He then moved onto “K” Line North America, a national trucking company, and his tenure eventually took him to Virginia. He served as vice president of liner operations. At a Wall Street Transportation Conference Rubin met a man from Fortress, the investment group that facilitated the deal with Carlisle and Interpool, and that led to him being named president of Seacastle Chassis.
After a long career in operations Rubin still talks about transportation and shipping with the enthusiasm of an excited college student. His line of work is at the very heart of the American economy and is, in fact, an excellent barometer of economic health. When fewer people buy those blenders, Wal-Mart has less reason to reorder, and the effects wash across a complex network of suppliers, shippers, sellers, and buyers.
Even so, Rubin avers that shipping itself is not in any danger as an industry. More than 10 million cargo containers are imported to the United States every year, and when those containers come off the ships, they eventually go onto trucks. And the efficiency of interchange, made possible by a universal lock-and-socket system developed in part by Marty Tuchman when he was at REA in the 1960s, allows goods to move from one mode of transportation to another.
This efficiency has allowed a seismic shift in retail in the last 40 years. Before intermodal transportation cargo was loaded directly into the hold of a ship. This, says Rubin, required 40, maybe 50 workers to unload merchandise over the course of several days. Goods had to be removed, stored outside in yards, or in not-so-secure areas, and loaded in pieces onto trains or trucks. Consequently, retailers often had to place their Christmas orders in February, just so goods could get here, get unpacked, and get to the stores before the shopping season.
Today retailers can order goods and have them in stores within 60 days, meaning fewer trends and fads get to run their course before it’s time to buy presents. Consequently, there are fewer returns and fewer wasted hours.
Rubin holds back nothing when it comes to claiming his industry’s role in assisting the economy. In a consumer-driven society, he says, people need to buy and sell. And Seacastle makes getting those items moving through the supply chain an efficient process.
That said, Rubin also is painfully aware of the fourth quarter of 2006 that ended a banner year for container shipping. Since then the consumer market has ebbed. Things were at least bearable until September — the fourth quarter of 2008 — when Wall Street collapsed and retail choked on the same dust as big financial. People stopped spending just as banks stopped lending, and the trickle effects of what is referred to in Economics 101 as the “paradox of thrift” eventually turned into a mess. People hold onto their money and stores hold onto inventory they can’t move. Over time, as we have seen, the economy grinds down and takes as many victims with it as it can.
The situation bothers Rubin, but he remains optimistic. Even the Great Depression ended, he says.
Seacastle Chassis, 211 College Road East, 08540. 609-452-8900. Home page: www.seacastleinc.com .