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Abstract
One of the most important developments in the post-war shipping industry has been the introduction of specialised ship types that have gained market shares in the transport of a large number of cargoes. The share of specialised tonnage in the Norwegian fleet increased from less than 1% in 1960 to more than 30% by 1987. This trend towards increased specialisation did not occur to the same extent in all maritime centres. In an international perspective, Norwegian owners held a large share of the new specialised ships. This can partly be explained within the framework of the Vernon product life cycle. However, even within Norway there were substantial differences in the degree of investment in specialised tonnage. Specifically, a disproportionate share of the specialised Norwegian ships was owned by shipping companies in the city of Bergen. In 1977 Bergen companies owned around 13% of the aggregate Norwegian fleet, but more than 40% of the specialised tonnage. The Bergen presence was particularly strong in two segments; chemical tankers and open hatch bulk shipping. Through closer studies of the companies involved it becomes evident that three factors – co-operation between individual companies, vertical integration and technological innovation – can explain Bergen's strong position within specialised shipping.
Acknowledgements
I would like to thank participants in the session ‘Maritime Business’ at the EBHA-conference in Bergen, as well as Jan Tore Klovland, Peter Lorange, Hugh Murphy, Lars S⊘rgard, Siri Pettersen Strandenes and Lars Fredrik Øksendal for comments and fruitful discussion. Any remaining errors are my own. The research upon which this article has been based is part of the Nortraship-programme, the Research Council of Norway's project number is 186767.
Notes
1. The 1987 data includes most Norwegian-owned ships registered abroad. Due to the strict Norwegian flag regime before 1980, there is hardly any difference between the Norwegian-flagged and Norwegian-owned fleet in the first two data sets.
2. Indeed, it could be argued that the giant crude oil tankers are among the most specialised ships of all, as they can carry only one cargo and access a very limited number of ports.
3. This would include the five segments presented by Stopford (Citation2009, p. 29). The following ship types are characterised as specialised vessels; liquefied gas carriers, passenger/cruise ships, chemical tankers, car and vehicle carriers, supply ships, specialised service vessels, open hatch bulk carriers and LASH (Lighter Aboard Ship), container and Ro-Ro (roll on-roll off) vessels. The non-specialised ships include four types of vessels; conventional bulk carriers, general cargo ships, combination carriers and oil tankers.
4. See Lorange (Citation2005) for a categorisation of the various shipping segments.
5. Vernon (Citation1966), dealing with manufacturing production, international trade and international investment, distinguishes between three phases; a new product, maturation and standardisation. Within shipping, it is difficult to clearly model the trade and investment effects at the international level, and the transition between the latter two phases is vague.
6. The term TMNs may somewhat imprecisely be said to refer to the OECD countries. Open register ships still fly the TMN flag, but special provisions apply.
7. This corresponds with Vernon (Citation1966, pp. 193–194), which deals specifically with innovations that substitute capital for labour.
8. Yet as a result of increased efficiency due to technological innovation, the price may be lower than previous alternatives using the older technology. As long as the new technology is not universally available, it may therefore be correct to use the term ‘high profits’ rather than ‘high prices’.
9. The choice of the years analysed is based on the fact that although the proportion of specialised ships grew rapidly in the 1960s, they had only limited influence on the Norwegian fleet until the mid 1970s. The end point – 1987 – has been chosen due to changes in the Norwegian regulatory regime, specifically the introduction of the Norwegian International Ship Register, that renders comparisons with previous years difficult.
10. All tables and figures in this article are, unless otherwise stated, based on three purpose-built data sets consisting of all Norwegian ships above 5,000 grt. The data sets have been based on Det norske Veritas (Citation1960, Citation1977, Citation1987), but supplemented by other sources when necessary. As a result of the restrictive Norwegian practices with regard to registration abroad, there is hardly any variation between the Norwegian-flagged and Norwegian-owned fleet in the first two data sets. However, due to liberalisation of the flag policy, it has been necessary to include Norwegian-owned ships registered abroad in the 1987 data set.
11. Nevertheless, the importance of this effect was likely to diminish in time; see Thanopoulou (Citation1995).
12. The ‘specialisation ratio’ refers to the specialised ships’ share of a company's tonnage. When looking at more than one company, the average of individual ‘specialisation ratios’ gives misleading results, as differences in the size of companies are ignored. In such instances, the ‘specialisation ratio’ refers to the specialised fleets as a proportion of all tonnage owned by companies that had invested in such ships.
13. It is worth noting that there were ten specialised companies in Bergen both in 1977 and in 1987. However, the number of companies that had not invested in specialised tonnage declined from 13 to four.
14. The reason for the deviation between these figures and those calculated on the basis of the proportion of specialised companies and their ‘specialisation ratio’, is the higher propensity of large companies to invest in specialised tonnage.
15. There are two reasons that Porter's ‘cluster’ approach has not been explicitly used in this article. The first is that the shipping companies’ role at the ‘core’ of the Norwegian maritime cluster is disputed; see Midelfart Knarvik & Steen (Citation1999). The second reason is that the notion of a ‘maritime cluster’ in Norway has been at the centre of a heavily politicised debate within Norway (Fougner, Citation2006).
16. The most obvious example of this is chemical tankers trading in the oil products market when demand for chemical transport is low, and oil products tankers carrying some ‘benign’ chemical cargoes when demand is high.
17. This illustrates one of the problems of having a lower limit of 5000 grt for the ships included in the database. To the extent that new technologies are first introduced on smaller ships, this specialisation is not recorded until the ships reach a certain threshold size.
18. Chemical tankers are classified according to the different chemicals they can transport. The sophisticated end of the market comprises ships that can accept even the most hazardous chemicals. The other end of the spectrum consists of relatively simple chemical tankers, often with coated tanks, that can only accept a limited number of more ‘benign’ chemicals.
19. By 1977 Westfal-Larsen contributed approximately 40% of the tonnage in the pool. However, the focus on Odfjell is warranted by the fact that this company had been the original pioneer, owned the onshore facilities and was responsible for the commercial operation of all ships employed in the pool.
20. The other major owners took similar steps, while smaller new chemical tanker operators did not have the capacity to offer onshore storage as part of the transport assignment.
21. Over the same period, the share of the world fleet registered in Norway declined from 7% to 1.6%.
22. Despite the exit of the original participants, the Team Tankers pool continued with other participants.
23. The open hatch bulk carriers do not figure as a separate type of ship in macro statistics such as for instance those presented by Lloyd's and Veritas, but are lumped in with other types of bulk carriers. In order to identify open hatch bulk carriers in the database, information on the breadth of the hatch covers and the crane equipment, which distinguish them from conventional bulk ships, has been used.
24. The term ‘neo-bulk’ refers to commodities that require specialised shipping and port handling. They differ from break-bulk cargoes, which are less uniform and more difficult to load and unload, and bulk cargoes, which are homogeneous cargoes such as coal or ore that are shipped in loose condition.
25. Star Shipping's reduced share of the Norwegian-owned open hatch bulk fleet was to some extent neutralised by the company's operation of foreign-registered ships on long-term contracts.
26. As the Gearbulk case shows, there were also partnerships with interests that were clearly not locally based. However, the local participants were by far the most important, and there is little doubt that geographical proximity and already existing relations between the companies facilitated the cooperation.
27. Calculations based on Lloyd's (Citation1977, Tables 1 and 2, and 1987, Tables 1 and 2). The rightmost column refers to Norwegian-owned ships, rather than vessels registered in Norway.
28. For the sake of argument; if there were several small foreign competitors in 1977, but only one foreign competitor in 1987, the international indices could move in the opposite direction from that seen in . However, given our knowledge of what happened in other countries – even without numerical evidence – it is clear that this was not the case.