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Abstract
The article analyses the emergence of chemical shipping as a specialised shipping segment. In the 1950s and 1960s seaborne transport of chemicals was characterised by rapid technological development, based on the introduction of parcel tankers, which could carry chemicals in bulk. By the early 1970s two Norwegian companies had built up substantial market shares, but were challenged by financially stronger British companies. The article traces the background of the main companies involved in chemical shipping in the 1970s, by which stage market concentration was evident. We look at their entry into the market and their strategies. First mover advantages, determination to remain market leaders, fleet structure and timing go a long way to explaining why by the mid-1980s the Norwegians had managed to fend off the British challenge.
Acknowledgements
The authors would like to thank two anonymous referees for constructive comments on a previous draft of this article.
Notes
1. For an early introduction to chemical tankers in general and their cargoes, see Corkhill, 1976; for tankers generally, Newton, Citation2002; Ratcliffe, 1985. Two recent contributions dealing directly with one of the major chemical tanker companies are Tenold, Citation2006a; Thowsen & Tenold, Citation2006.
2. Similarly, in one of the books on the evolution of the petrochemical industry, the one-and-a-half pages devoted to transports of chemicals deal almost exclusively with pipelines (Chapman, Citation1991, pp. 138–139).
3. In this article we largely disregard the oil majors, only two of which, Shell and Standard Oil of New Jersey (later Exxon) had substantial chemical interests. For Shell in the USA, see Beaton, 1957, and for Standard, see Larson, Knowlton, & Popple, 1971.
4. The latter had established the Shell Chemical Corporation in the USA in 1929 (see Beaton, 1957, Chapter IX).
5. It is difficult to precisely define the parcel tanker fleet, as borderline vessels, for instance petroleum products tankers, could carry some benign chemical cargoes. Moreover, small chemical carriers, dedicated to single products, continued to be important for the transport of heavy chemicals.
6. Although Japan played an increasingly important role both as producer of and market for chemicals, only six Japanese parcel tankers existed before 1981.
7. Only two general cargo vessels were purchased, but both had been sold by 1968. A comparison of the various vessel types shows that the return from chemical tankers was considerably higher than the return from the general cargo carriers (see Tenold, Citation2006a).
8. Odfjell Archives (hereafter OA), held at Odfjell ASA, Bergen, Box/Representantskapsprotokoll, November 14, 1968.
9. Stolt-Nielsen purchased its first terminal, Zeetank, in Zeebrugge, Belgium in the early 1970s (Stolten (Stolt-Nielsen Company Magazine), No. 4 (1972)).
10. OA, Bergen, Box/Styremøter, Agreement of February 19, 1970.
11. The major secondary sources for much of our information on Athel-Anco are Meneight, 1977; Corkhill, 1976; Riert, Citation1999, and as such we are indebted to these authors.
12. Hugill states that 19 out of 24 vessels were lost and 205 men killed.
13. United had acquired a controlling interest in Tankers Ltd (originally formed in 1920 as a subsidiary of the Scottish and American Oil and Transport Company), in December 1941. By October 1950, Tankers Ltd owned four motor tankers and three tank steamers aggregating 84,321 dwt and averaging around 18 years of age (‘Annual Summary’, 1951).
14. In the interim, the sugar giant Tate & Lyle had turned to the Athel Line to part own, plan, construct and manage for a period of 10 years a fleet of six dry cargo ships for the carriage of sugar and associated cargoes in bulk. The partnership was to be known as the Sugar Line (Meneight, 1977, pp. 121, 157; Hugill, 1978, p. 186; for an alternative to Hugill, see Chalmin, 1983).
15. By this stage the Athel Line had also invested in building two 59,000-dwt oil tankers. Although consideration was given to selling them, during the Arab–Israeli conflagration in 1967 and the second closure of the Suez Canal, both vessels earned in the region of £1 million per annum until the competition caught up (Hugill, 1978, p. 267).
16. National Maritime Museum, Greenwich (hereafter NMM) Peninsular and Oriental Papers, PO17/39 Planning and Finance, Chemical Tanker Project, 1965–69.
17. NMM, PO17/39 Planning and Finance, Chemical Tanker Project, 1965–1969.
18. NMM PO39/19 Chemical Tankers Potential Opposition. 1968 figures quoted from US Chemical Marketing Research Association.
19. This period of British government intervention in domestic shipbuilding is analysed in Hogwood, Citation1979; Johnman & Murphy, Citation2002.
20. Peninsular and Oriental Dead Company Files, held at P&O Headquarters, Pall Mall, London (hereafter P&O HQ), PO/INF/072.
21. P&O HQ, PO/INF/072.
22. In 1975, Panocean entered into a joint venture with the Malaysian International Shipping Corporation based on the Malaysian palm oil trade (Fairplay, September 1975).
23. The fleet included two vessels owned and managed by the French Worms Group and contained through a pooling arrangement for revenue only.
24. This overexposure was of course limited in the British case, as Panocean-Anco was in effect a subsidiary of larger conglomerates. Moreover, both Odfjell and Stolt-Nielsen entered the booming Norwegian offshore sector. However, this was accomplished through separate companies.
25. Lloyd's Shipping Economist, 1(4), 1979 estimated that any fleet of fewer than 12–14 vessels would be unlikely to provide the necessary worldwide service.
26. refers to the fleet operated by Odfjell, and includes pool and chartered tonnage.
27. OA, Bergen, Box/Mag/O1, 1974.
28. The organisation of the Odfjell group is presented in Thowsen & Tenold, Citation2006, Chapter 13.
29. OA, Bergen, Box/Odfjells rederi avsl.-78, Liquidity analysis of June 1, 1977.
30. P&O HQ, PO/INF/349 Memo to Executive Committee, February 5, 1981.
31. P&O HQ, PO/INF/348 Memo from Bulk Shipping Division to Capital Investment Committee, January 30, 1979.
32. Panocean, Report and Accounts to December 31, 1980.
33. P&O HQ, PO/INF/349 Memo to Executive Committee, February 5, 1981.
34. P&O, Annual Report and Accounts 1981, p. 26.
35. Panocean-Anco Ltd, Directors Report and Accounts to December 31, 1981.
36. P&O HQ, P&O/INF/348 Memo to Executive Committee, October 15, 1982.
37. P&O HQ, P&O/INF/348 Memo to Executive Committee, October 15. 1982.
38. Ibid.
39. P&O, Annual Report and Accounts 1983, p. 27; 1984, p. 26; Ocean Transport & Trading plc, Annual Report & Accounts, 1984, p. 19.