THE HANDBOOK OF MARITIME ECONOMICS

AND BUSINESS

SECOND EDITION
 Related Titles

From The Grammenos Library

Future Challenges in the Port and Shipping Sector

By Hilde Meersman, Eddy Van de Voorde and Thierry Vaneslslander
(2009)

Maritime Safety, Security and Piracy

By Wayne K. Talley
(2008)

Commodity Trade and Finance

By Michael N. Tamvakis
(2007)
 THE HANDBOOK
OF MARITIME ECONOMICS
AND BUSINESS

SECOND EDITION

EDITED BY

COSTAS TH. GRAMMENOS

LONDON
2010
 Lloyd’s List
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69-77 Paul Street
London EC2A 4LQ

An Informa business

Lloyd’s and the Lloyd’s crest are the registered trade mark of the society incorporated
by the Lloyd’s Act 1871 by the name of Lloyd’s.

© Costas Th. Grammenos and contributors, 2002, 2010

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN 978 1 84311 880 0

All rights reserved. No part of this publication may be reproduced,

stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording or
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Lloyd’s List can accept any responsibility for any
errors or omissions or for any consequences
resulting therefrom.

Text set in 9/11pt Plantin

by Exeter Premedia Services.
Printed in Great Britain by
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 This second edition of the Handbook of Maritime Economics and Business is

Dedicated to:
Professor Ernst G Frankel, of Massachusetts Institute of Technology
Professor Richard O Goss, of University of Cardiff
Professor Arnljot Stromme Svendsen, of the Norwegian School of Economics
and Business Administration

And in memory of:

Professor Zenon S Zannetos, of Massachusetts Institute of Technology
Professor Vassilis Metaxas, of University of Piraeus

All these Professors have shown in their published texts a pioneering insight
on various aspects of the maritime industry and thus command our respect
and warm thanks.

Professor Costas Th. Grammenos

London, June 2010
 About the Editor
Costas Th. Grammenos, CBE, BA (Athens), MSc (Bangor), DSc (City), FCIB, Hon
FIMarEST, FRSA is Professor of Shipping, Trade and Finance; Pro Vice-Chancellor
of City University London and Deputy Dean of its Cass Business School, where he
founded the Centre for Shipping, Trade and Finance in 1983 (renamed The Costas
Grammenos International Centre for Shipping, Trade and Finance in April 2007).
The Centre carries out research through members of its staff and PhD students and
cultivates international dialogue by formal and informal meetings. He designed two
world-class Masters of Science: Shipping, Trade and Finance introduced in 1984; and
Logistics, Trade and Finance commenced in 1997 (since 2008 known as MSc Supply
Chain, Trade & Finance); while the MSc in Energy, Trade and Finance was introduced
in 2003.
In 1977 he established credit analysis and policy in bank shipping finance which has
been applied by many international banks; and, in 1978, published his monograph Bank
Finance for Ship Purchase (University of Wales Press), which formed the key principles
in shipping finance. In addition, since mid-1980s, he concentrated on and promoted
the utilisation of international capital markets for raising funds for shipping companies
through his lectures, teaching at University, conferences and since early 1990s through
his published research. In 2006 he was appointed by the Greek government as President
of the Managing Board of the International Hellenic University in Thessaloniki, Greece,
with the mandate to establish and operate it. His research interests are in Bank Shipping
Finance, and Capital Markets.
In 1999 Costas Grammenos was awarded by City University London the highest
academic accolade, the Doctor of Science degree (DSc) for creating, through his
published research, shipping finance as a new academic discipline.
He is a member of the Board of Directors of the Alexander S Onassis Public Benefit
Foundation; a Founding Trustee of the Institute of Marine Engineers Memorial Fund;
and a Non-executive member of the Board, Marfin Investment Group (MIG).
He is Fellow of the Chartered Institute of Bankers; Honorary Fellow, Institute
of Marine Engineers, Science and Technology; Fellow of Royal Society of Arts and
Member of the Baltic Exchange; Member of the American Bureau of Shipping;
Liveryman of the Worshipful Company of Shipwrights; Freeman of the City of London;
Founder and Chairman of the City of London Biennial Meetings; Visiting Professor at
the University of Antwerp; and he was President of IAME (1997–2002).
He was 1998 Seatrade Personality of the Year; in 2008 he was awarded the prize of
Distinguished Personality for his outstanding contribution to the shipping industry by
the Association of Banking and Financial Executives of Hellenic Shipping; and in 2009
was awarded the ‘Achievement in Education’ at the Lloyd’s List Shipping Awards; he was
made OBE (Officer of the British Empire) in 1994 for his contribution to international
shipping and finance and appointed CBE (Commander of the British Empire) in 2008
for services to teaching and research.
 PREFACE TO THE SECOND EDITION

In the seven years that have passed since 2002, when the first edition of this Handbook
was published, each one of us would have noticed major events or conditions that have
strongly impacted the shipping markets and produced results that we would include in
our lectures – often we categorise these as extraordinary.
I have in mind the explosive rate of growth in China; the almost unstoppable increase
in seaborne trade and in investments in new vessels; in the expansion in number and
size of Chinese shipyards; in the continuation of bank finance as the strong source of
funds for shipping companies; in the mergers or acquisitions of shipping companies
and, generally, in the increase of their size; and in the emergence of capital markets as a
serious means of raising funds for a sizeable number of shipping companies.
All this activity was abruptly shaken in 2007 when the world recession shyly emerged
and the subprime crisis of US residential mortgages, and the toxic products based on
them, hit the international financial system and froze the liquidity in it.
It seems we have not seen the end of the mega drama that we have witnessed in these
seven years.
Our Handbook has been directly or indirectly influenced by events of the first decade
of the 21st century which have been embodied in our data analysis. The structure of
this volume remains the same as the edition published in 2002. However, in addition
to the rewriting or updating of the chapters, some new topics have been included in the
volume, such as the historical analysis of freight rates fluctuations in chapter 10; meas-
ures for global control of air pollution from ships in chapter 16; measures for business
performance in shipping in chapter 22; while capital markets as a source in shipping
finance and a holistic survey in strategy literature relevant to shipping are discussed in
chapters 28 and 29 respectively.
The first edition established the Handbook as an authoritative source of academic
research that is useful for university students and researchers and, at the same time, it
satisfies the curiosity of the well-informed practitioner and widens its knowledge horizon.
It is a pleasure to know that the Handbook is now called “The Maritime Bible” in more
than 30 countries.
I want to thank all my colleagues for their enthusiasm to participate in the 2002 and
2010 editions and to thank them profoundly for the high quality of their contributions.
Finally, I want to thank my Personal Assistant, Chrysoula Zevgolatakou, for controlling
the logistics of incoming and outgoing chapters and the Informa editorial and printing
staff, in particular Liz Lewis and Leigh Stutter, for their cooperation and patience in
meeting tight deadlines.
Needless to report that as contributors we again gave up our royalties in favour of
the International Association of Maritime Economies (IAME) and continue to be loyal
members.

Professor Costas Th. Grammenos

London, June 2010

vii
Page Intentionally Left Blank
 PREFACE TO THE FIRST EDITION

In the late 1960s, when I started focusing on shipping finance, there were only a
limited number of publications on Maritime Economics which mainly analysed the
broader theoretical topics. Now, after almost thirty-five years, this unique volume
is published, covering for the first time a wide variety of maritime issues and sec-
tors, written by fifty-one members of the International Association of Maritime
Economists (IAME). Over forty of the contributors are well-known academics,
with the remaining younger ones already showing recognisable academic presence,
all teaching and conducting research at thirty universities, in seventeen countries.
IAME was established in 1992 with an aim to promote the development of maritime
economics as a distinct discipline, to encourage rational and reasoned discussion within
it, and to facilitate the international exchange of ideas and research. Throughout this
decade, IAME has worked towards these aims most successfully, and here one should
mention the organisation of international conferences, on an annual basis; this year (on
its tenth anniversary), members will meet in Panama.
The Handbook of Maritime Economics and Business contains thirty-nine refereed
chapters which are, primarily, based on research carried out over a number of years,
covering eleven broad areas of Maritime Economics, viz: Maritime Economics
and Globalisation; International Seaborne Trade; Economics of Shipping Markets
and Cycles; Economics of Shipping Sectors; Issues in Liner Shipping; Maritime
Safety and Labour Markets; National and International Shipping Policies; Aspects
of Shipping Management and Operations; Shipping Investment and Finance; Port
Economics and Management; and Aspects of International Logistics.
As I was studying these chapters, not only did I recall the questions that arose
when I was collecting data for my study in Bank Shipping Finance, all those years
ago, when so many answers were not readily available in published paper form or any
other publication, I also found myself smiling many times, with great satisfaction, as
I measured the width and depth of research presented here, in the wider spectrum
of Maritime Economics. Indeed, The Handbook of Maritime Economics and Business is
unique as it demonstrates the immeasurable progress, since the 1960s, in this area of
research and teaching.
Because of its high quality output and its relevance to real life business, it will
serve as a very valuable instrument for the stakeholders of the broader maritime
world, including: university undergraduate and postgraduate students; shipowners;
shipbrokers; shipmanagers and operators; bankers; underwriters; lawyers; shipping
consultants; international logistics companies; port authorities; governmental maritime
agencies; and official international organisations.
Over the last six months, I have worked closely with all the contributors and I thank
them de profundis for the spontaneous acceptance of my invitation and the prompt
delivery of what they promised. I am also grateful to them for agreeing, like myself,
to waive their royalties in favour of IAME. My sincere thanks go to David Gilbertson,

ix
x Preface to the First Edition

Chief Executive of Informa Group, who from the early days has strongly supported the
idea of this volume; also to the LLP editorial and printing staff, in particular Vanessa
Larkin and Tony Lansbury, for their cooperation and patience in meeting the tight
deadlines. Finally, I thank very warmly two members of my staff: Dr Amir Alizadeh,
also a contributor to this volume, and my Personal Assistant, Mrs Gladys Parish, for
their enthusiasm and valuable assistance in the preparation of this Handbook.

Professor Costas Th. Grammenos

London, September 2002
 TABLE OF CONTENTS

Preface to the Second Edition vii

Preface to the First Edition ix
List of Contributors xv

Part One: Shipping Economics and Maritime Nexus 1

Chapter 1 Maritime Business During the Twentieth Century: 3
Continuity and Change
GELINA HARLAFTIS & IOANNIS THEOTOKAS

Chapter 2 Globalisation – The Maritime Nexus 35

JAN HOFFMANN & SHASHI KUMAR

Part Two: International Seaborne Trade 65

Chapter 3 Patterns of International Ocean Trade 67
DOUGLAS K. FLEMING

Chapter 4 International Trade in Manufactured Goods 99

MARY R. BROOKS

Chapter 5 Energy Economics and Trade 117

MICHAEL TAMVAKIS

Chapter 6 Modal Split Functions for Simulating Decisions 173

on Shifting Cargo from Road to Sea
MANFRED ZACHCIAL

Part Three: Economics of Shipping Markets and Shipping Cycles 179

Chapter 7 The Economic of Shipping Freight Markets 181
PATRICK M. ALDERTON & MERV ROWLINSON

Chapter 8 Economics of the Markets for Ships 217

SIRI PETTERSEN STRANDENES

Chapter 9 Shipping Market Cycles 235

MARTIN STOPFORD

Chapter 10 Recreating the Profit and Loss Account of Voyages 259

of the Distant Past
ANDREAS VERGOTTIS, WILLIAM HOMAN-RUSSELL,
GORDON HUI & MICHALIS VOUTSINAS

Part Four: Economics of Shipping Sectors 317

Chapter 11 An Overview of the Dry Bulk Shipping Industry 319
AMIR H. ALIZADEH & NIKOS K. NOMIKOS

xi
xii Table of Contents

Chapter 12 The Tanker Market: Current Structure and Economic Analysis 355
DAVID GLEN & STEVE CHRISTY

Chapter 13 Economics of Short Sea Shipping 391

ENRICO MUSSO, ANA CRISTINA PAIXÃO CASACA &
ANA RITA LYNCE

Part Five: Issues in Liner Shipping 431

Chapter 14 Competition and Cooperation in Liner Shipping 433
WILLIAM SJOSTROM

Chapter 15 The Response of Liner Shipping Companies to the Evolution 457

of Global Supply Chain Management
TREVOR D. HEAVER

Part Six: Pollution and Vessel Safety 479

Chapter 16 Using Economic Measures for Global Control 481
of Air Pollution from Ships
SHUO MA

Chapter 17 Vessel Safety and Accident Analysis 519

WAYNE K. TALLEY

Part Seven: National and International Shipping Policies 537

Chapter 18 Shipping Policy and Globalisation; Jurisdictions, 539
Governance and Failure
MICHAEL ROE

Chapter 19 Government Policies and the Shipbuilding Industry 557

JOON SOO JON

Part Eight: Aspects of Shipping Management and Operations 577

Chapter 20 The Impact of Choice of Flag on Ship Management 579
KYRIAKI MITROUSSI & PETER MARLOW

Chapter 21 Fleet Operations Optimisation and 603

Fleet Deployment – An Update
ANASTASSIOS N. PERAKIS

Chapter 22 Measuring Business Performance in Shipping 625

PHOTIS M. PANAYIDES, STEPHEN X. H. GONG &
NEOPHYTOS LAMBERTIDES

Part Nine: Shipping Investment, Finance and Strategy 657

Chapter 23 Investing in Twenty-First Century Shipping: An Essay 659
on Perennial Constraints, Risks and Great Expectations
HELEN THANOPOULOU
 Table of Contents xiii

Chapter 24 Valuing Maritime Investments with Real Options: 683

The Right Course to Chart
HELEN BENDALL

Chapter 25 Business Risk Measurement and Management in the Cargo 709

Carrying Sector of the Shipping Industry – An Update
MANOLIS G. KAVUSSANOS

Chapter 26 Managing Freight Rate Risk using Freight Derivatives: 745

An Overview of the Empirical Evidence
AMIR H. ALIZADEH & NIKOS K. NOMIKOS

Chapter 27 Revisiting Credit Risk, Analysis and Policy in Bank 777

Shipping Finance
COSTAS TH. GRAMMENOS

Chapter 28 Shipping Finance and International Capital Markets 811

THEODORE C. SYRIOPOULOS

Chapter 29 Framing a Canvas for Shipping Strategy 851

KURT J. VERMEULEN

Part Ten: Port Economics and Management 889

Chapter 30 Port Management, Operation and Competition: 891
A Focus on North Europe
HILDE MEERSMAN & EDDY VAN DE VOORDE

Chapter 31 Revisiting the Productivity and Efficiency of Ports 907

and Terminals: Methods and Applications
KEVIN CULLINANE

Chapter 32 Organisational Change and Effectiveness in Seaports 947

from a Systems Viewpoint
CIMEN KARATAS CETIN & A. GÜLDEM CERIT

Chapter 33 The Economics of Motorways of the Sea: Re-defining 985

Maritime Transport Infrastructure
ALFRED J. BAIRD

Part Eleven: Aspects of International Logistics 995

Chapter 34 International Logistics Strategy and Modal Choice 997
KUNIO MIYASHITA

Chapter 35 IT in Logistics and Maritime Business 1017

ULLA TAPANINEN, LAURI OJALA & DAVID MENACHOF

Index 1033
Page Intentionally Left Blank
 LIST OF CONTRIBUTORS

PROFESSOR PATRICK M. ALDERTON

Born in 1931 and educated for the usual period, though left the sixth form to run away to
sea in 1948 in BTC (later known as BP Tankers). Later in 1959, after trying most types
of ships, he obtained his Extra Masters Certificate and lectured in one of the two naviga-
tion schools in London that in the late 1960s were amalgamated into the City of London
Polytechnic. In the 1970s he moved to the Transport Department of the CLP and worked
on his MPhil which he obtained in 1973. In 1989 he joined the World Maritime University
as Professor of Ports and Shipping where he remained until he retired in 1995. Since
then he has been a visiting professor at the London Metropolitan University. Publications
include Sea Transport – Operations & Economics (6th edn) and Port Management and
Operations (3rd edn), plus over 100 papers, articles and chapters in various books.

DR AMIR H. ALIZADEH
Amir Alizadeh is a Reader in “Shipping Economics and Finance” at Cass Business
School, City University London, and a visiting professor at Copenhagen Business
School and University of Geneva. He has first degree in Nautical Studies from Iran
and worked as a ship officer for a short time. He then joined Cass Business School
where he finished his MSc in Shipping, Trade and Finance and a PhD in Finance. He
teaches different topics including Quantitative Methods, Oil & Energy Transportation
and Logistics, Shipping Investment and Finance, Econometric Modelling, Energy and
Weather Derivatives, and Shipping Risk Management. His research interest includes,
modelling freight markets and markets for ships, derivatives and risk management in
financial and commodity markets, and econometrics and forecasting. He has published
in several academic journals in the area of transportation, finance and economics. Apart
from academic research, he has been in close contact with the industry both as an
advisor and as a consultant. He is involved in running the Baltic Exchange courses in
“Freight Derivatives & Shipping Risk Management” and “Advanced Freight Modelling
and Trading” which are offered in maritime centres worldwide.

PROFESSOR ALFRED J. BAIRD

Alfred J. Baird is Professor of Maritime Transport at the Transport Research Institute
(TRI), Edinburgh Napier University. His doctoral research concerned the study of strate-
gic management in the global container shipping industry. He has a BA (Hons) in Business
Studies and is a Member of the Chartered Institute of Logistics & Transport. Prior to
his academic career he worked for a liner shipping company. With an emphasis on the
ferry and container shipping sectors, and the ports industry in general, Professor Baird has
researched, published, advised, and taught across a range of maritime transport subjects
including: strategic management in shipping, shipping market and industry analysis, ship
and port cost modelling, shipping service scheduling/planning, competition, privatisation,
procurement and tendering of shipping services, government policy, state subsidies, and
assessing the feasibility of shipping services and port facilities.
xv
XVI List of Contributors

PROFESSOR HELEN BENDALL

Helen Bendall is a Director of MariTrade, a consultancy firm specialising in maritime
investment and trade statistics for the maritime and aviation industries. Dr Bendall is
a popular guest speaker on shipping investment and technological change in industry
conferences and is an advisor to several peak industry and policy councils, having taken
an active role in IMO working parties. Currently teaching at the Macquarie University
in Sydney, she was also a senior academic member of UTS where she specialised in
International Financial Management in the Finance and Economics School. She is well
known for cross–disciplinary financial analysis to shipping and maritime investment
problems. Her PhD on the economics of technological change in shipping included an
innovative approach to measuring ship and cargo handling productivity across several
ship types. Many of her subsequent publications have analysed applications of new
shipping technology such as advanced algorithms to solve complex fast ship schedul-
ing problems. More recently her research focused on the application of real options
analysis to evaluate the financial viability of new ship technology and complex ship
investment decisions.

PROFESSOR MARY R. BROOKS

Mary R. Brooks is the William A. Black Chair of Commerce at Dalhousie University,
Halifax, Canada. From February 2002 to April 2008, she chaired the Committee on
International Trade and Transportation, until recently served on the Committee for
Funding Options for Freight Transportation Projects of National Significance, and
currently serves on the Publication Board of the Transportation Research Record, of the
Transportation Research Board, Washington DC. She was appointed to the Marine
Board of the US National Academy of Sciences for three years in November 2008.
She chairs the Port Performance Research Network, a network of scholars interested
in port governance and port performance issues. She was a Canada–US Fulbright
scholar at George Mason University in 2005. Her latest book, North American Freight
Transportation: The Road to Security and Prosperity, was published in June 2008. In
November 2006, she was named by the Women’s Executive Network as Canada’s Most
Powerful Women: Top 100 in the professional category.

DR ANA CRISTINA PAIXÃO CASACA

Ana Cristina Paixão Casaca is the Technical director of ESPRIM – Centro de
Acostagens, Amarrações e Serviços Marítimos, Lda. She obtained her elementary nau-
tical studies degree at Escola Náutica Infante D. Henrique (ENIDH) in Paço D’Arcos,
Portugal. She was a deck officer in Portuguese shipping companies and lectured at
the Instituto de Tecnologias Náuticas. She received her BA in 1995, and subsequently
obtained an MSc in International Logistics at the Institute of Marine Studies, University
of Plymouth in 1997. She completed her PhD in International Transport/Logistics at
the University of Wales, Cardiff in 2003. Since 1998, she has published articles in pro-
fessional magazines and well-known international academic journals. She is a member
of the Institute of Chartered Shipbrokers (ICS) and of the International Association
of Maritime Economists (IAME). Since 2003, she has evaluated transport related
projects and proposals on behalf of the European Commission. She is a guest lecturer
at the Netherlands Maritime University.
 List of Contributors xvii

PROFESSOR A. GÜLDEM CERIT

Güldem Cerit received her BSc degree from the Engineering School of the Middle
East Technical University, Ankara, Turkey. She worked in private industry for nine
years and in 1993, joined the Dokuz Eylul University School of Maritime Business
and Management (which became the Maritime Faculty in 2009) as an Assistant
Professor. Dr Cerit has served as the Director/Dean of the Faculty since 1997.

DR CIMEN KARATAS CETIN

Cimen Karatas Cetin has lectured on maritime business, port management and opera-
tions at the Dokuz Eylul University, Maritime Faculty in Izmir, Turkey since 2003.
She completed her MSc at the Dokuz Eylul University Institute of Social Sciences
in Maritime Business Administration in 2004, and pursues her doctoral studies in
the same department. She was awarded a grant by the Scientific and Technological
Research Council of Turkey (TUBITAK) in 2008 and continued her doctoral research
at the Erasmus University Rotterdam, Center for Maritime Economics and Logistics
(MEL) as a research fellow in 2009/2010. She has presented several papers on port
management and organisation at international conferences, has published articles
in journals and in edited books. She has participated in transport and port-related
projects in Turkey.

STEVE CHRISTY
Steve Christy is Head of Consultancy & Research at Gibson Shipbrokers, based in
London. He has more than 25 years’ experience in the tanker and oil industries, cover-
ing oil supply and transportation developments. He is now responsible for Gibson’s
analysis of all the shipping markets. This includes research into market and industry
developments impacting on the tanker industry, the implications for future supply and
demand of tankers and forecast analysis of charter rates and earnings.
He has worked on a number of major projects, including various tanker market
forecasts for different shipowners, charterers and investment clients. He is also
involved in cost analysis, transportation options and shipping economics, and tanker
investment appraisal, as well as acting as an expert witness in legal cases.

PROFESSOR KEVIN CULLINANE

Kevin Cullinane is Director of the Transport Research Institute and Professor of
International Logistics at Edinburgh Napier University. He was formerly Chair in
Marine Transport & Management at Newcastle University, Professor and Head of
the Department of Shipping & Transport Logistics at the Hong Kong Polytechnic
University, Head of the Centre for International Shipping & Transport at Plymouth
University, Senior Partner in his own transport consultancy company and Research
Fellow at the University of Oxford Transport Studies Unit. He is a Fellow of the
Chartered Institute of Logistics & Transport, and has been a logistics adviser to
the World Bank and transport adviser to the governments of Scotland, Ireland, Hong
Kong, Egypt, Chile, Korea and the UK. He is a Visiting Professor at the University of
Gothenburg, holds an Honorary Professorship at the University of Hong Kong and has
published seven books and over 180 refereed journal and conference papers. He also
sits on the editorial boards of several journals.
XVIII List of Contributors

PROFESSOR DOUGLAS K. FLEMING

Douglas Fleming is a maritime geographer and professor emeritus at the University
of Washington, Seattle. He earned an undergraduate degree in Geology at Princeton
in 1943 and a PhD in Geography at Seattle in 1965. He served with the US Navy
from 1944 to 1946. He was employed by a commercial steamship line for 15 years
in various capacities including chartering brokerage and as vice president of States
Marine and Isthmian traffic operations in New York, Houston and Seattle. From 1965
to 2002 he taught various classes in Geography and Marine Affairs at the University of
Washington, Seattle. He has contributed numerous articles to American and European
journals and has served periodically on editorial boards in Europe.

DR DAVID GLEN
David Glen is Reader in Transport in the Business School, London Metropolitan
University, having joined the Centre for International Transport Management in 1995,
as a Research Fellow. He obtained his PhD from London Business School in 1987,
which examined differentiation in the tanker market. He has published in a number of
journals, including the Journal of Transport Economics and Policy and Maritime Policy
and Management. He is presently on the editorial board of the latter. Dr Glen served
on the Council of IAME for a number of years, and was Secretary from 2000 to 2003.
He is also a member of the International Maritime Statistics Forum. His research
interests include shipping market structures and dynamics, seafarer statistics,
maritime pollution and international trade flows. Since 1997, he has been involved
UK Department for Transport projects on monitoring and improving the quality
of UK seafarer numbers.

DR STEPHEN X. H. GONG
Stephen X. H. Gong is with the School of Accounting and Finance at the Hong Kong
Polytechnic University. He was initially trained in Shipping, Trade and Finance at Cass
Business School, City University London and subsequently completed a PhD in Finance
at the Hong Kong Polytechnic University. His research interests span the areas of
corporate finance, corporate governance, financial reporting, industrial organisation, and
transportation economics. He has consulted with international as well as local organisations
in the areas of logistics development and transportation investment and finance.

PROFESSOR GELINA HARLAFTIS

Gelina Harlaftis graduated from the University of Athens and completed her graduate
studies in the Universities of Cambridge (MPhil) and Oxford (DPhil), in St Antony’s
College between 1983 and 1988. She taught at the University of Piraeus from 1991 to
2002 and since 2003 has been at the Department of History of the Ionian University. She
was President of the International Association of Maritime Economic History from 2004
to 2008. During the fall of the academic year 2008–2009 she was Alfred D. Chandler Jr.
International Visiting Scholar in the Business History Program of the Harvard Business
School and in the spring a Visiting Fellow at All Souls College, Oxford. She is the author
of several books including Greek Shipowners and Greece 1945–1975 (Athlone Press, 1993),
and her latest book, Leadership inWorld Shipping: Greek Family Firms in International Business
with Ioannis Theotokas, was published in 2009.
 List of Contributors xix

PROFESSOR TREVOR D. HEAVER

Trevor Heaver is professor emeritus at the University of British Columbia where he was
the UPS Foundation Professor and Director for the Centre for Transportation Studies.
Since retiring from UBC, he has been Visiting Professor at the University of Antwerp
(on-going), the University of Sydney (Australia) and the University of Stellenbosch.
He is a founding member and a Past-President of the International Association of
Maritime Economists and a Past-Chairman of the World Conference on Transport
Research. He has published widely on transportation, logistics and transportation pol-
icy and has served as a consultant to corporations and governments in Canada and
internationally.

DR JAN HOFFMAN
Jan Hoffmann works as trade facilitation, port and shipping specialist at UNCTAD’s
Trade Logistics Branch since 2003 and is currently chief of the Trade Facilitation
section. He is in charge of a trade facilitation project on WTO negotiations, as well
as national projects in Afghanistan and Pakistan. He edits the UNCTAD Transport
Newsletter and is co-author of the annual Review of Maritime Transport.
Previously, he spent six years with the United Nations Economic Commission for
Latin America and the Caribbean, Santiago de Chile, and two years with the IMO,
London. Prior to this, he held part-time positions as assistant professor, import-export
agent, translator, consultant and seafarer for a tramp shipping company.
Jan has studied in Germany, the UK and Spain, and holds a doctorate degree in
Economics from the University of Hamburg. His work has resulted in numerous UN
and peer-reviewed publications, lectures and technical missions, as well as the internet
Maritime Profile, the International Transport Data Base, the Liner Shipping Connectivity
Index, and various electronic newsletters.

MR WILLIAM HOMAN-RUSSELL
William Homan-Russell received an MSc in Finance from London Business School in
2007 and an MA in Mathematics from Oxford University in 2002. He joined Tufton
Oceanic Ltd in 2003 as a financial analyst to work on credit and market analysis of
the shipping sector for the company’s leasing and corporate advisory departments.
William subsequently joined Tufton’s Oceanic Hedge Fund in 2006 to work within the
shipping team; he focuses on the modelling of global publicly listed shipping equities
and shipping market models as well as developing quantitative portfolio optimisation
procedures. His MSc in Finance was completed whilst with Tufton Oceanic Ltd.

DR GORDON HUI
Gordon Hui graduated as a MPhil in Physics in 2006. He specialised in computer
simulations for condensed matter systems by matrix & Monte Carlo algorithms.
He started his career in financial industry as a quantitative researcher in a Commodity
Trading Advisor; his areas of expertise being Monte Carlo simulations in risk manage-
ment and rebalancing portfolios, volatility modelling in various time frame, backtest-
ing in Market-On-Close, day-trading strategies & HK index arbitrage. Afterwards, he
worked as a quantitative day-trader in a propriety trading house. In 2009, Gordon
joined Tufton as an analyst.
XX List of Contributors

PROFESSOR JOON SOO JON

Joon Soo Jon began his academic life with a BA in English Literature from Sogang
University, and went on to obtain a Master’s degree in Transport Management at
SUNY and a doctorate in Maritime Studies at the University of Wales in Cardiff.
He is currently a professor at Sogang University in Seoul. While teaching and research-
ing in the maritime sector, he has been involved in policy making as an adviser to
various Korean Government agencies such as the Ministry of Maritime Affairs, the
Ministry of Industry and the Ministry of Foreign Affairs. He has published widely. His
current research interests focus upon the development of logistics systems in the Far
Eastern Countries.

PROFESSOR MANOLIS G. KAVUSSANOS

Manolis Kavussanos is a faculty member of the Athens University of Economics and
Business (AUEB), Greece. He is the Director of the MSc and PhD programmes in
Accounting and Finance and of the Research Centre for Finance at AUEB. He holds a
BSc and MSc (Economics) from London University and a PhD (Applied Economics)
from Cass Business School, City University London. He directed the MSc in Trade,
Logistics and Finance at Cass from its inception until he joined AUEB. He has held var-
ious posts as professor of finance and shipping in universities in more than eight coun-
tries around the globe. He has written extensively in the areas of finance, shipping and
applied economics, published in top international refereed journals, in conference pro-
ceedings and books. This work has been presented in international conferences and pro-
fessional meetings around the world, gaining awards for its quality, being sponsored by
both public and private sector companies and being cited extensively by other research-
ers in the area. Since 1992 he has worked in developing the area of risk analysis and
management in shipping and is the author of the book Derivatives and Risk Management
in Shipping.

PROFESSOR SHASHI KUMAR

Shashi Kumar is the Interim Superintendent/Academic Dean at the United States
Merchant Marine Academy in Kings Point, New York. He is also the Founding Dean
of the Loeb-Sullivan School of International Business and Logistics at Maine Maritime
Academy in Maine, USA. He is a Master Mariner (UK) and sailed extensively on com-
mercial ships prior to entering academe. Dr Kumar is a founding member of IAME and
the International Association of Maritime Universities, and is also affiliated with the
American Society of Transportation and Logistics. His areas of teaching and research
include maritime economics and policies, international shipping, and maritime logis-
tics. He has published extensively and authors an annual review of the shipping indus-
try for the US Naval Institute. He has held visiting professor appointments at the
Indian Institute of Management-Ahmedabad (India), Memorial University (Canada),
World Maritime University (Sweden), Shanghai Maritime University (China) and the
Pontifical Catholic University (Puerto Rico).

DR NEOPHYTOS LAMBERTIDES
Neophytos Lambertides received a BSc in Mathematics and Statistics from the University
of Cyprus in 2000 and an MSc in Financial Mathematics from the University of Warwick
in 2001. He took a PhD in Finance from the University of Cyprus in 2006. Thereafter,
 List of Contributors xxi

he was designated as a Visiting Scholar at Columbia Business School. He is currently lec-

turer in Finance at Aston Business School (UK). His interests are mainly on the area of
asset pricing, credit risk and bankruptcy prediction, option pricing theory, real options,
and shipping finance. His publications appeared in the Journal of Accounting Auditing
and Finance, Abacus, The British Account Review, Managerial Finance, Maritime Policy &
Management. He reviewed papers for, among others, the European Journal of Operational
Research and Managerial Finance.

DR ANA RITA LYNCE

Ana Rita Lynce is currently working for Ascendi S.A. which is providing technical
support to a road concessionaire in the state of São Paulo, Brazil called Rodovias do
Tietê. Subject to the Bolonha process, Ana Rita obtained her MSc in Civil Engineering
and specialised in Land Planning, Transportation and Management, at the Technical
University of Lisbon – Instituto Superior Técnico, Lisbon, Portugal. She developed a
thesis on the Barriers and potentialities of rail freight from the Iberian Peninsula to Europe at
the Centre for Innovation in Transport (CENIT) – Technical University of Catalonia,
in Barcelona. After finishing her thesis, she started to work as a Transport Researcher
in the railway department of CENIT. In September 2007, she became a Transport
Researcher at the Department of Economics and Quantitative methods (DIEM) –
University of Genoa, in Genoa and a Guest Scientific Assistant at the Laboratory
for Intermodality and Transport Planning (LITEP) – École Polytechnique Fédérale
de Lausanne in Switzerland, with a TransportNET scholarship, funded by the EU
under the Sixth Framework Marie Curie Actions Programme. Since 2008, she has
presented research papers at conferences on Transport and Logistics in areas such as
the Extension of the European high-speed railway network and Transport sustainability
strategies for supply chain management in the fast moving consumer goods industry.
In 2009, she published a research paper on Short Sea Shipping and Intermodality in
the journal NETNOMICS. In the same year, she worked at VTM – Consultores, a
Transport Consultancy Company in Portugal in a project for RAVE, the Portuguese
High-Speed Rail Infrastructure Manager.

DR SHUO MA
Shuo Ma is a professor of shipping and port economics and policy at the World
Maritime University in Malmö. He is also Vice-President (Academic) at WMU.
Dr Ma is an active researcher and consultant in the area of shipping and port eco-
nomics and policy. For the last couple of years, he has been actively involved in
maritime research and education in China. He has been associated with numerous
research projects and activities in the field of maritime transport in China both
at national and regional levels. He is the Director of two joint MSc programmes,
which he created in 2004, between WMU and two Chinese Maritime Universities
in Shanghai and Dalian.

PROFESSOR PETER MARLOW

Peter Marlow is Professor of Maritime Economics and Logistics at Cardiff University
in the UK. He has over 30 years’ experience in academia and research work and is the
author of more than 100 published works. He is currently the Head of Logistics and
Operations Management at the Cardiff Business School and is a transport economist
XXII List of Contributors

with considerable expertise in maritime and land transport as well as logistics. From
1998 to 2001 he was President of NEPTUNE, an EU-based network of universities
and research institutions and is currently President of the International Association
of Maritime Economists and Visiting Professor at Dalian Maritime University. His
research interests include the fiscal treatment of shipping; the choice of flag in interna-
tional shipping; the value added by transport in logistics supply chains; short sea ship-
ping; port economics and logistics; maritime clusters; and inter-modal transport.

PROFESSOR HILDE MEERSMAN

Hilde Meersman has a PhD in Applied Economics. She is a full professor at the
University of Antwerp where she teaches in the fields of Econometrics, Transport
Modelling, and Economics. She also teaches at the Technical University of Delft
and has been guest professor in a number of universities including MIT, Boston and
IST, Lisbon.
She is the coordinator of the policy research centre of the Flemish Government:
‘Mobility and Public Works – Commodity Flows’ which is allocated at the Department
of Transport and Regional Economics of the University of Antwerp.
She chaired the International Scientific Committee of the WCTRS from 2001 until
2007. She was able to build up a large experience in research management and research
coordination during her chairwomanship of the Research Centre for Economic and
Social Research of the University of Antwerp.
Her research activities are on the intersection of transportation economics, mac-
roeconomics and quantitative modelling. This enables her to link the evolution in the
world economy to specific transportation problems.
She is involved, directly or indirectly, in a large number of research projects on top-
ics such as international transport infrastructure investment, modelling and forecast-
ing transport, empirical analysis of port competition, inland navigation, mode choice,
sustainable mobility, etc.

PROFESSOR DAVID MENACHOF

David Menachof is the Peter Thompson Chair in Port Logistics, based at the
Logistics Institute at Hull University Business School. He received his doctorate
from the University of Tennessee, and was the recipient of the Council of Logistics
Management’s Doctoral Dissertation Award in 1993. He is a Fulbright Scholar, having
spent an academic year in Odessa, as an expert in Logistics and Distribution. He has
previously taught at the Cass Business School, City University London, the University
of Charleston, South Carolina, and the University of Plymouth, England. His research
interests include supply chain security and risk, global supply chain issues, liner shipping
and containerisation, and financial techniques applicable to logistics.

DR KYRIAKI MITROUSSI
Kyriaki Mitroussi was awarded her PhD in Management and Business at Cardiff
Business School, Cardiff University in 2001 as a scholar of the Greek State Foundation
of Scholarships. She also holds an MSc in Marine Policy from Cardiff University,
Department of Maritime Studies and International Transport. She joined Cardiff
Business School as a lecturer in September 2005, and prior to her current post she
served as a lecturer at the University of Piraeus, Department of Maritime Studies
 List of Contributors xxiii

in undergraduate and postgraduate schemes. She has worked with shipping compa-
nies and has also been involved in consultancy services. Her research work has been
published in international academic journals while articles have also appeared in the
international commercial and economic press. Her broad research interests include:
shipping management, third-party ship management, safety and quality in shipping
and shipping policy. She is a member of the International Association of Maritime
Economists.

PROFESSOR KUNIO MIYASHITA

Kunio Miyashita is the Professor of International Logistics and Transportation at the
Faculty of Business Administration, Osaka Sangyo University, Japan. He is also the
professor emeritus of Kobe University and holds a PhD from this University. He is
the author of six books, including Market Behaviors in Competitive Shipping Markets)
and Global Competition of Japanese Logistics Industry. He is the President of the Japanese
Society of Transportation Economics, the former President of the Japanese Society
of Logistics and Shipping Economics, and the Honorary Editor-in-Chief of The Asian
Journal of Shipping and Logistics.

PROFESSOR ENRICO MUSSO

Enrico Musso (Genoa 1962) is full professor in Applied Economics at the University of
Genoa, where he is involved in research and teaching activities in Transport Economics,
Maritime and Port Economics, and Urban and Regional Planning. Since 2008 he has
been a member of the Italian Senate.
Former director of the PhD programme in Logistics, Infrastructure and Territory of
the University of Genoa; lecturer in the Masters Transport and Maritime Management
and Transport and Maritime Economics; visiting professor in many universities in Italy
and abroad; director of international research programmes concerning ports, maritime
transport, urban mobility.
Author, co-author or editor of more than 130 scientific publications, among which
important volumes or chapters in volumes in maritime and port economics.
Editor-in-chief of the International Journal of Transport Economics. Member of the
editorial board of Maritime Economics and Logistics and European Transports.
Chairman of the Italian Society of Transportation Economists. Co-chair of the
Maritime Transport and Ports Special Interest Group at the World Conference on Transport
Research Society. Co-founder of Transportnet, a research network of eight European
universities, and of the Italian Centre of Excellence for Integrated Logistics.

PROFESSOR NIKOS K. NOMIKOS

Nikos Nomikos is a Professor in Shipping Risk Management and Director of the
MSc degree in Shipping, Trade and Finance at Cass Business School, City University
London. He holds an MSc and PhD from Cass Business School. He started his
career at the Baltic exchange as Senior Market Analyst, being in charge of the freight
indices and risk management divisions. Since November 2001, he has been with
the Faculty of Finance at Cass Business School where he specialises in the area of
freight derivatives and risk management. His research papers on derivatives pricing
and modelling have been published in international journals and have been presented
XXIV List of Contributors

in conferences worldwide. He has also published a book on Shipping Derivatives and

Risk Management and has developed postgraduate and executive development courses
in that area.

DR LAURI OJALA
Lauri Ojala is Professor of Logistics at the Turku School of Economics, Finland. His
research interests include international logistics and transport markets. Since the mid-
1990s, he has also worked as an expert for several international agencies on develop-
ment projects in for example, the Baltic States, Albania, and several CIS states. From
2006 to 2008, he was in charge of two EU part-funded logistics projects in the Baltic
Sea Region.
He is currently Project Director of another EU part-funded project on safety and
security of international road freight transport (CASH).
He is the founder and co-author of the Logistics Performance Index first launched by
The World Bank in November 2007. LPI 2010 was published in January.

DR PHOTIS M. PANAYIDES
Photis M. Panayides is Associate Professor in Shipping Economics at the Department
of Commerce, Finance and Shipping, Cyprus University of Technology. He holds a
first class Honours degree and a PhD in Shipping Economics and Management (1998)
from the University of Plymouth, UK. Photis held academic appointments among
others at the University of Plymouth, the Hong Kong Polytechnic University, the
Copenhagen Business School, and the National University of Singapore to the level of
Associate Professor.
Photis has authored three books and over 30 scientific journal papers in the fields of
shipping economics, logistics and transportation. He reviews for major journals and has
contributed several conference papers. He pioneered the development of academic and
professional programmes in shipping and logistics and has also consulted for several
companies. Photis is an elected member of the Board of the International Association
of Maritime Economists and serves on the Board of Directors of the Cyprus Ports
Authority.

PROFESSOR ANASTASSIOS N. PERAKIS

A.N. (Tassos) Perakis, a SNAME Fellow, obtained his Diploma degree from NTU
Athens (NA&ME), and his Masters (Ocean Eng/Operations Research), PhD and MBA
all from MIT. Tenured faculty, Department of NA&ME, University of Michigan, Ann
Arbor. Sponsored research: fleet deployment, logistics, routing/scheduling, reliability/
safety, environmental policy, probabilistic modelling, optimisation, decision analysis
for marine systems. Has authored one book, three chapters in edited books, and over
150 refereed journal articles and conference proceedings, reports, and other publica-
tions. Visiting Professor, Technical University Berlin (twice), NTU Athens (twice),
Institute of Water Resources (USA), Boeing Welliver Faculty Fellow (2003), Office
of Naval Research Distinguished Faculty Fellow (2003). Fellow, Michigan Memorial
PhoenixEnergy Institute. Numerous service activities, recently with US National
Acad. of Sciences/Transportation Research Board panels. Chaired seven graduated
PhD students, three of them also professors, several academic “grandchildren” and
“great-grandchildren”.
 List of Contributors xxv

PROFESSOR MICHAEL ROE

Michael Roe holds the Chair of Maritime and Logistics Policy at the University
of Plymouth. He previously worked with the Greater London Council and the
Universities of Aston, Coventry, London Metropolitan and City. The author of over
50 refereed journal papers and 11 books, he specialises in Eastern European mari-
time policy and the wider governance of maritime affairs. His wife, Liz, provides
moral and intellectual support whilst his children, Joe and Siân, provide entertain-
ment and expenses. He has active interests in modern European art and literature,
restoring VW Beetles, the work of Patti Smith and New Order and the exploits of
Charlton Athletic FC.

DR MERV ROWLINSON
Merv Rowlinson has served in towage and merchant shipping and has nearly
30 years’ teaching experience in shipping and logistics experience at the Merchant
Navy College,Warsash School of Navigation (Southampton) and London Metropolitan
University. He has successfully supervised five PhD programmes. He has an M.Phil
from Liverpool Polytechnic and a PhD from the City of London Polytechnic both
in maritime business. He currently divides his time between Copenhagen Business
School, Hamburg School of Shipping & Transportation, Lloyd’s Maritime Academy
and the European College of Business Management (London & Aachen). His research
interests are inter-modal transport, particularly short sea shipping and its potential for
delivering sustainable transport.

DR WILLIAM SJOSTROM
William Sjostrom is senior lecturer in economics at the Centre for Policy Studies of
the National University of Ireland, Cork, where he also served as dean of the Faculty
of Commerce and director of the Executive MBA programme. He previously taught
economics at Northern Illinois University and the University of Washington, was a
staff economist at the Port of Seattle, and has consulted for the Port of Cork, the
European Commission, and private law firms. He serves on the editorial boards of
Maritime Economics and Logistics and the International Journal of Transport Economics.
His maritime research focuses primarily on competition policy in liner shipping. He
has also published papers on crime, unemployment, competition law, and oligopoly in
the lumber industry. He received his PhD in 1986 from the University of Washington,
Seattle, supervised by Keith Leffler, a specialist in the economics of competition policy,
and Douglas Fleming, a maritime geographer.

DR MARTIN STOPFORD
Martin Stopford is a graduate of Oxford University and holds a PhD in International
Economics from London University. During his 30-year career in the maritime
industry he has held positions as Director of Business Development with British
Shipbuilders, Global Shipping Economist with Chase Manhattan Bank NA, Chief
Executive of Lloyd’s Maritime Information Services and currently Managing
Director of Clarkson Research. He is a Visiting Professor at Cass Business School,
City University London, and is a regular lecturer and course leader at Cambridge
Academy of Transport. His publications include Maritime Economics, the widely used
shipping text, and many published papers on shipping economics and ship finance.
XXVI List of Contributors

PROFESSOR SIRI PETTERSEN STRANDENES

Siri Pettersen Strandenes is professor at the Department of Economics, Norwegian
School of Economics and Business Administration (NHH), and honorary visiting
professor in The Costas Grammenos International Centre for Shipping, Trade and
Finance at Cass Business School. Her fields of research are transport and market analy-
sis focusing on the maritime and the airline industries. She has published in international
research journals and is member of the editorial board of the Maritime Economics &
Logistics. She teaches graduate level courses in shipping and international economics. She
is member of the board of DnB NOR ASA.

PROFESSOR THEODORE C. SYRIOPOULOS

Theodore Syriopoulos is Associate Professor of Finance in the Department of Shipping,
Trade and Transport, School of Business Studies, University of the Aegean, Greece.
For more than fifteen years, he has served as a Managing Director and Board Member
in a number of private and public companies in banking, investment, asset manage-
ment and financial consulting. He researches and publishes regularly in international
academic journals, including the Journal of International Financial Markets, Institutions
& Money and Applied Financial Economics. Academic fields of interest include shipping
finance, capital markets and risk management, portfolio strategies, mergers & acquisi-
tions and corporate governance. He holds a PhD in economics, an MA in Development
Economics and a BA in economics.

PROFESSOR WAYNE K. TALLEY

Wayne K. Talley is Professor of Economics at Old Dominion University, Norfolk,
Virginia, where he is the Executive Director of the Maritime Institute and holds the
designations of Eminent Scholar and the Frederick W. Beazley Professor of Economics.
He is an internationally recognised transportation economist, having held visiting
international academic positions at the University of Oxford (England), University of
Sydney (Australia), City University London (United Kingdom), University of Antwerp
(Belgium) and University of Wollongong (Australia) and visiting US positions at the
Woods Hole Oceanographic Institution (Woods Hole, Massachusetts), Transportation
Systems Center, US Department of Transportation (Cambridge MA), Interstate
Commerce Commission (Washington DC) and the National Aeronautics and Space
Administration (Langley, Virginia). He is the Editor-in-Chief of Transportation Research
Part E: Logistics and Transportation Review and deputy Editor-in-Chief of the Asian
Journal of Shipping and Logistics. His 2009 book, Port Economics, is the first textbook in
this area.

PROFESSOR MICHAEL TAMVAKIS

Michael Tamvakis trained as an economist at the Athens University of Economics and
Business in Greece. He then joined the International Centre for Shipping, Trade and
Finance at the (then) City University Business School; first as a student on its MSc
programme, and then as a member of its academic staff. He received his PhD from City
and is currently Professor of Commodity Economics and Finance at Cass Business
School, City University London. He lectures in international commodity trade, com-
modity risk management and shipping economics. His research interests are in the
areas of commodity economics, energy derivatives and shipping economics.
 List of Contributors xxvii

He has published in academic journals such as Energy Economics, Energy Policy,

Journal of Alternative Investments, Journal of Derivatives, Logistics and Transportation
Review and Maritime Policy and Management.

PROFESSOR ULLA TAPANINEN

Ulla Tapaninen PhD is a professor of Maritime Logistics at the Centre for Maritime
Studies (CMS), University of Turku. She received her PhD in 1997 in logistics model-
ling. She has worked for 10 years as a development manager and environmental man-
ager in a large Finnish RoRo-shipping company. Since 2006 she has been in charge of
maritime logistics research at the CMS. Since 1992, she has worked as a researcher,
project director and board member in dozens of projects in the areas of maritime and
cross-border transportation, logistics information handling and maritime safety and
environment.

ASSOCIATE PROFESSOR HELEN THANOPOULOU

Helen A. Thanopoulou studied at the University of Athens and University of Paris
(Panthéon-Sorbonne). She holds a Doctorate in Maritime Studies from the University
of Piraeus where she taught briefly. She spent eight years in Wales, as Lecturer and
later Senior Lecturer at Cardiff University serving, after 1999, as a Director of ship-
ping-related postgraduate courses. She returned to Greece in 2004 taking an Assistant
Professor’s post at the University of the Aegean, in the Department of Shipping, Trade
and Transport on Chios island. She has published on shipping-related subjects includ-
ing crises, competitiveness, investment patterns, liner alliances and ports and maritime
innovation. In 2008, in Dalian, she was elected Council member of the International
Association of Maritime Economists (IAME). She is serving her second term as
Council member of the Hellenic Association of Maritime Economists (ENOE). She
has been a Guest Editor and member of Editorial Boards, currently of the Journal of
Shipping, Trade and Transport. She is a regular guest lecturer at academic institutions in
Greece and abroad.

DR IOANNIS THEOTOKAS
Ioannis Theotokas is Associate Professor at the Department of Shipping, Trade and
Transport of the University of the Aegean. He has a background of economics specialising
in Shipping Management. He received his PhD from the University of Piraeus (1997).
His research interests include topics in Management, Human Resource Management
and Strategic Management applied to shipping business. He has participated as prin-
cipal researcher in research projects and consultancy studies. He is the co-author (with
G. Harlaftis) of the book Leadership in World Shipping. Greek Family Firms in International
Business (2009). He has published 23 papers in academic journals and books and has
presented over 25 peer-reviewed papers at international scientific conferences.

PROFESSOR EDDY VAN DE VOORDE

Eddy Van de Voorde is Full Professor at the University of Antwerp, Faculty of Applied
Economics. His activities are situated in Maritime Economics, Port Economics, Air
Transport and Logistics. He is in charge of many new research projects, financed by
various Belgian and international governments and private organisations. Much of his
research, particularly in the field of modelling freight transport, results in a long list of
XXVIII List of Contributors

publications in important journals. Recently, he was co-author of various standard-works

in the field of transport economics and models.
He is also a professor at the University of Ghent and at the Technical University of
Delft, and he is visiting professor at different foreign universities, such as Lisbon, Bari,
London and MIT (Cambridge, Boston). In the past years he fulfilled different functions
in international scientific associations, such as being the vice-chair of the International
Association of Maritime Economists (IAME), vice-chair of the scientific committee of
the World Conference on Transport Research Society (WCTRS) and vice-chair of the
Benelux Interuniversity Association of Transport Economists (BIVEC). He is also a
member of a scientific editorial staff of seven international journals, such as Maritime
Policy and Management, Transport Policy, Transportation Research-E, and the International
Journal of Transport Economics.
In 2005, he was awarded in Genoa a prestigious international prize, the Premio
Internationale delle Communicazioni “Cristoforo Colombo”, for his scientific research
in the field of Maritime Economics.

DR ANDREAS VERGOTTIS
Andreas Vergottis was awarded his MSc Econometrics from the London School of
Economics in 1984 and his PhD in Business Administration from City University
Business School in 1988. In 1989 he joined Tufton Oceanic Ltd as shipping ana-
lyst, responsible for screening various projects involving debt, mezzanine and equity
financing of shipping transactions. In 1996 he was recruited by Warburg (subsequently
acquired by UBS) as sector coordinator for global shipping analysis. In addition to
regular research coverage on 30 listed shipping companies, he participated in several
IPO and M&A transactions within the shipping industry. In 2002 he rejoined Tufton
Oceanic Ltd as Head of Research. He assisted in launching the Oceanic Hedge Fund
with $5m starting capital which currently has grown to $1.8bn assets under manage-
ment. He is presently based in Hong Kong, where Tufton Oceanic Ltd have recently
opened a new representative office. He is a visiting professor at Cass Business School,
City University London.

MR KURT J. VERMEULEN
Kurt Vermeulen is a Visiting Lecturer on Shipping Strategy at Cass Business School,
City University London. He provides consultancy services in this area. Assignments
focus on multidisciplinary approaches involving issues pertaining to strategy, business
intelligence, competitive intelligence and corporate finance. Prior to this, Kurt was a
Vice President in Mergers & Acquisitions (M&A) at a predecessor bank of JP Morgan
Chase. His transactional experience focused on the transport, chemicals and finan-
cial services industries. He was a Guest Lecturer on M&A to MSc Shipping, Trade &
Finance students at Cass Business School. Previous to that, Kurt worked as a solicitor
on corporate and commercial law matters. He has a Lic. Iuris. (LLM) cum laude in
commercial and financial law from the University of Gent (Belgium) and also studied
German and EU competition law (Wettbewerbsrecht, Kartellrecht) and law and eco-
nomics at the Law Faculties of the University Hamburg (Germany) and the University
Osnabrück (Germany). He subsequently obtained, whilst employed, a Spec. Lic. (MSc)
Port & Marine Sciences magna cum laude from the University of Gent, a MA in Eastern
European Studies cum laude from the University of Gent and a MSc in Shipping, Trade
and Finance from Cass Business School. He is a member of the Society of Competitive
Intelligence Professionals (SCIP).
 List of Contributors xxix

DR MICHALIS VOUTSINAS
Michalis Voutsinas works as an independent researcher with particular interests in
shipping financial history and risk management of shipping companies. He was
awarded with an MSc in Shipping, Trade and Finance from Cass Business School,
City University London, an MSc in Applied Economics and Finance from Athens
University of Economics and Business and a BSc in Economics from the same institu-
tion. Michalis was honoured with a prize, from Athens University of Economics and
Business and a scholarship from Greek Shipowners’ Association.

PROFESSOR MANFRED ZACHCIAL

Manfred Zachcial belongs to the Board of Directors of the Institute of Shipping
Economics and Logistics (ISL), Bremen, and has a chair of economics and statistics
at Bremen University. Manfred Zachcial has been working on economics, land and
maritime transport projects since 1972. He is a leading authority on shipping eco-
nomics, statistics, transport planning, logistics and maritime information systems.
In addition to his academic responsibilities, Professor Zachcial advises governments
and international agencies on transportation strategies, port and shipping, and on the
feasibility of various transport infrastructure developments. His research activities
have resulted in numerous published works on modelling in both land and maritime
transport, including transhipments at European sea ports. One of his major research
activities is the analysis and forecast of world container shipping along the whole
transport chains including hinterland transports and their determinants.
Page Intentionally Left Blank
 PART ONE

SHIPPING ECONOMICS AND

MARITIME NEXUS
Page Intentionally Left Blank
 CHAPTER 1

MARITIME BUSINESS DURING

T H E T W E N T I E T H C E N T U RY:
CONTINUITY AND CHANGE

Gelina Harlaftis ∗ and Ioannis Theotokas †

1. INTRODUCTION

The historical process is dynamic, and the changes that occurred during the course of
world shipping in the past century, embedded some of the structures of the nineteenth
century. The methodological tools of a historian and an economist will be used in this
chapter, tracing continuity and change in the twentieth century shipping by examining
maritime business at a macro- and micro level. At the core of the analysis lies the ship-
ping firm, the micro-level, which helps us understand the changes in world shipping,
the macro-level.
The shipping firm functions in a specific market, and the shipping market can only
be understood as an international market, in a multiethnic environment. The first part
of this chapter follows the developments in world shipping, analysing briefly the main
fleets, the routes and cargoes carried, the ships and the main technological innovations.
The second part provides an insight on the main structural changes in the shipping
markets by focusing on the division of liner and tramp shipping. The third part reveals
from inside the shipowning structure and its changes in time in the main twentieth
century fleets: the British, the Norwegians, the Greeks and the Japanese; it is remark-
able how similar their organisation and structure proves to be.1 Maritime business has
always been an internationalised business. In the last five centuries of capitalist devel-
opment, European colonial expansion was only made possible with the sea and ships;
the sea being but a route of communication and strength rather than of isolation and
weakness. Wasn’t it Sir Walter Raleigh in the late sixteenth century, one of Elizabeth’s
main consultants who had set some of the first rules for the British expansion? “He who
commands the sea commands the trade routes of the world. He who commands the
trade routes, commands the trade. He who commands the trade, commands the riches of
the world, and hence the world itself.” The real truths are tested in history and time.

∗
Department of History, Ionian University, Corfu, Greece. Email: gelina@ionio.gr
†
Department of Shipping, Trade and Transport, University of the Aegean, Chios, Greece.
Email: gtheotokas@aegean.gr

3
4 Maritime Business During the Twentieth Century

2. DEVELOPMENTS IN WORLD SHIPPING

There were two main developments in the nineteenth century that pre-determined
the path of the world economies: an incredible industrialisation of the West and its
dominance in the rest of the world. During that period the world witnessed an unprec-
edented boom in world exchange of goods and services, an unprecedented boom of
international sea-trade. The basis of the world trade system of the twentieth century
was consolidated in the nineteenth century: it was the flow of industrial goods from
Europe to the rest of the world and the flow of raw materials to Europe from the rest of
the world. In this way, deep-sea going trade became increasingly dominated by a small
number of bulk commodities in all the world’s oceans and seas; in the last third of the
nineteenth century, grain, cotton and coal were the main bulk cargoes that filled the
holds of the world fleet. At the same time, the transition from sail to steam, apart from
increasing the availability of cargo space at sea, caused a revolutionary decline in freight
rates, contributing further to the increase of international sea-borne trade. Europe,
however, remained at the core of the world sea-trade system: until the eve of the World
War I, three quarters of world exports in value and almost two thirds of world imports
concerned the old continent.2
It does not come as a surprise then, that European countries owned the largest part
of the ocean-going world fleet during this period. Due to technological innovations,
the international merchant fleet was able to carry an increasing volume of cargoes
between continents with greater speed and lower cost. By the turn of the twentieth
century Great Britain was still the undisputable world maritime power owning 45% of
the world fleet, followed by the United States, Germany, Norway, France and Japan,
(see Table 1). Over 95% of the world fleet belonged to 15 countries that formed the so-
called “Atlantic economy”; what is today called the “developed” nations of the OECD
countries. Meanwhile, at the rival Pacific Ocean, Japan was preparing to be the rising
star of world shipping in the twentieth century.
Pax Brittanica and the incredible increase of world economic prosperity of more
than one hundred years closed abruptly with the beginning of World War I. The main
cause was the conflict of the big industrial European nations for the expansion of
their economic and political influence in the non-European world. It was the result
of the competition of western European nations for new markets and raw materials
that determined the nineteenth century and peaked in the beginning of the twentieth
century as the influence of the industrialisation of western European nations became
more distinct. At the beginning of the twentieth century almost all of Asia and Africa
were in one way or another under European colonial control.
The factors that created the international economy of the nineteenth century proved
detrimental during the two destructive world wars of the twentieth century by multi-
plying their effects. Firstly, the formation of gigantic national enterprises in Europe and
the United States and their concentration in vast industrial complexes with continuous
amalgamations of small and medium companies resulted in an exponential increase of
world production. Second, the search for markets beyond Europe that would absorb the
excessive industrial production, resulted in the fierce competition of British, German,
French and American capital in international capital investments worldwide. The result
was the creation of multinational companies and banks that led to the development
of monopolies on a national and international level. Within this framework, the great
expansion of the United States and German fleets took place, along with the multiple
 Developments in World Shipping 5

Table 1: The largest fleets of the twentieth century (in millions)

Country 1914 1937 1963 1992 2008

grt % grt % grt % dwt % dwt %
Great 21.0 43% 20.6 31% 21.6 15% 23.6 3.4 26.0 2.5
Britain
Germany 5.5 11% 3.9 6% 5.0 16.9 2.4 94.2 9.1
U.S.A. 5.4 11% 12.4 18% 23.1 16% 59.1 8.5 39.8 3.8
Norway 2.5 5% 4.3 6% 13.7 9% 54.1 7.8 46.9 4.5
France 2.3 5% 2.8 4% 4% 7.0 1 6.5 0.6
Japan 1.7 4% 4.5 7% 7% 90.2 12.3 161.7 15.6
Italy 1.7 3% 3.2 5% 5.6 4% 11.7 1.7 17.7 1.7
Holland 1.5 3% 2.6 4% 5.2 4% 8.6 0.8
Sweden 1.1 2% 1.5 2% 4.2 12.2 0.3 6.9 0.7
Russia- 1.0 2% 1.3 2% 5.4 4% 19.2 2.8 18.0 1.7
U.S.S.R.
Spain 0.9 2% 1.0 1% 2.0 5.1 0.7 4.5 0.4
Greece 0.8 2% 1.9 3% 15.0 10% 100.6 14.5 174.6 16.8
Hong- 0.3 0.8 31.6 4.5 33.4 3.2
Kong
China 0.6 0.5 27.5 3.9 84.9 8.2
South 0.1 18.2 2.6 37.7 3.6
Korea
World 49.1 100% 66.7 100% 145.9 100% 694.6 1038.3
total (444.3 grt) (774.7 grt)
Notes: 1992 and 2008 include real ownership including all flags. Data for 2008 include ships of
1000 grt and above.
Sources: Lloyd’s Register of Shipping 1914, Lloyd’s Statistical Tables 1990, 1992; Gelina Harlaftis, A
History of Greek-owned shipping, 1830 to the present day (Routledge 1993), Table 6.3, and UNCTAD
(2008), Review of Maritime Transport 2008, UNCTAD, Geneva.

mergers and acquisitions in the northern European liner shipping business and the
gradual destruction of small tramp shipping companies, particularly in Great Britain.
The interwar economy never recovered from the shock of World War I that influ-
enced the whole structure of the international economy resulting in the worst economic
crisis that the industrial world had seen in 1929. During the interwar period world
shipping faced severe problems stemming from a contracting world sea-trade, decreas-
ing world immigration and increasing protectionism. The economic crisis did not affect
the main national fleets in the same way. The impact was particularly felt in Britain.
This is the period of the economic downhill of mighty old Albion. It was World War I
that weakened Britain and allowed competitors to challenge its maritime hegemony. The
withdrawal of British ships from trades not directly related to the Allied Cause opened
the Pacific trades to the Japanese. Moreover, both Norway and Greece were neutrals,
6 Maritime Business During the Twentieth Century

which meant that their fleets were able to profit from high wartime freight rates (Greece
entered the war in 1917). Norwegian and Greek ships were able to trade at market rates
for three years while most of the British fleet was requisitioned and forced to work for
low, fixed remunerations. Freight rates in the free market remained high until 1920, after
which they plummeted; while there was a brief recovery in the mid-1920s, the nadir was
reached in the early 1930s.
Table 1 records the development of the world fleets of the main maritime nations
from 1914 to 1937. During this period the world fleet increased at one third of its pre-
war size. The British fleet remained at the same level with a slight decrease of its reg-
istered tonnage, but its percentage of the ownership of the world fleet decreased from
43% to 31% due to the increase of the fleets of other nations. The interwar period was
characterised by the unsuccessful attempt of the United States to keep a large national
fleet with large and costly subsidies to shipping entrepreneurs. Most of the increase of
the world fleet in the interwar period apart from the US was due to the Japanese, the
Norwegians and the Greeks, who proved to be the owners of the most dynamic fleets
of the century. Their growth was interconnected with the carriage of energy sources.
The most important change in the world trade of the interwar period was the gradual
decrease of the coal trade and the growing importance of oil.
The main coal producer (and exporter) in 1900 was the UK, with 225 million metric
tons or 51% of Europe’s production. By 1937 Britain was still Europe’s main produc-
ing country with 42% of European output. In 1870 the production of oil was less
than 1 million tons and in 1900 oil was still an insignificant source of energy; world
production of 20 million tons met only 2.5% of world energy consumption. Because
production was so limited there was little need for specialised vessels; tankers, mostly
owned by Europeans, accounted for a tiny 1.5% of world merchant tonnage. But all
this changed in the interwar period: by 1938 oil production had increased more than
15 times; it was 273 million tons and accounted for 26% of world energy consump-
tion.3 The tanker fleet, had grown to 16% of world tonnage, and although it was mostly
state-owned, independent tanker owners started to appear in the 1920s. The largest
independent owners of the interwar period were the Norwegians.4
Technological innovations continued in the twentieth century; the choices and
exploitation of technological advances by shipping entrepreneurs determined the path
of world shipping. The first half of the twentieth century was characterised on the one
hand by the use of diesel engines and the replacement of steam engines and on the
other, by the massive standard shipbuilding projects during the two world wars. Diesel
engines that appeared in 1890 were only used in a more massive scale on motor ships
during the interwar period particularly in Germany and the Scandinavian countries;
the cost of fuel being 30% to 50% lower than that of the steam engines. Standardisation
of ship types and shipbuilding programmes were introduced in World War I when
Germans sunk the allied fleets in an unprecedented submarine war. The world had not
yet realised what industrialisation and massive production of weapons for destruction
could do. The convoy system had been abandoned and naval battleships with their
complex weapons were ready to confront the enemy. But it was the allied merchant
steamships that were the artery of the war, transporting war supplies. And this armless
merchant fleet became an easy target to the new menace of the seas: the German sub-
marines. From 1914 to 1918, 5,861 ships or 50% of the allied fleet was sunk.
Replacement of the sunken fleet took place between 1918 to 1921 in US and British
shipyards. It was the first time that standard types of cargo ships, the “standards” as
 Developments in World Shipping 7

they came to be called, were built on a large scale. The “standard” ships became the
main type of cargo ship during the interwar period; they were steamships of 5,500 grt.
It was these “standard” ships that Greeks, Japanese and Norwegian tramp operators
purchased en masse from the British second hand market and expanded their fleets
amongst the world economic crises. For similar reasons during World War II the United
States and Canada launched the most massive shipbuilding programmes the world had
known, using new and far quicker methods of building ships: welding. During four
years they managed to build 3,000 ships, the well-known Liberty ships, that formed the
standard dry-bulk cargo vessel for the next 25 years.5 Greek, Norwegian, British and
Japanese tramp operators all came to own Liberty ships, in one way or another up to
the late 1960s.
The second half of the twentieth century was characterised by an incredible increase
of world trade that towards the end of the century was described as the globalisation of
the world economy. The period of acceleration was up to 1970s; world trade from about
500 million metric tons in the 1940s climbed up to more than three billion metric tons
in the mid-1970s. If the history of world maritime transport in the first half of the twen-
tieth century was written by coal and tramp ships, in the second half the main players
were oil and tankers. During this period, sea-trade was divided into two categories: liq-
uid and dry cargo. Almost 60% of the exponential growth of world sea trade was due to
the incredible growth of the carriage of liquid cargo at sea, oil and oil products. There
was also impressive growth in the five main bulk cargoes: ore, bauxite, coal, phosphates
and grain. To carry the enormous volumes required to feed the industries of the West
and East Asia, the size of ships carrying liquid and dry cargoes had to be increased. The
second half of the twentieth century was characterised by the gigantic sizes of ships and
their specialisation according to the type of cargoes. The last third of the century was
marked by the introduction of container ships. The new “ugly” ships revolutionised the
transport system for industrial goods.
Up to the 1960s the main carriers of the world fleet remained the same with the
US and Britain continuing to hold their decreasing shares in world shipping, followed
by the continually rising Greece, Japan and Norway (Table 1). Flags of convenience
were used informally by all maritime nations but in the immediate post-war years more
extensively by Greek and American shipowners. Flags of convenience that were later to
be called open registries became a key manifestation of the American maritime policy
and a determining feature of post war shipping that guaranteed economical bulk ship-
ping.6 By using flags of convenience, shipowners of traditional maritime countries were
able to maintain control of their fleets benefiting from low cost labour. Sletmo relates
the third wave of shipping with the transnationalisation of shipping through flagging
out and dependence upon manpower from low-cost countries.7 After the repetitive
freight rates crises of the 1980s flag of convenience were extensively used by all western
and eastern maritime nations.
The 1970s marked a new era: this period was characterised by the final loss of the
pre-dominance of European maritime nations, with the exception of the Greeks that
continue to keep their first position to the present day, and of the Norwegians that
despite the great slump of the 1980s, kept their share of the market in the 1990s.
During the last third of the twentieth century the increase of the size of the world fleet
shipping continued but slowed down. The United States has kept, mostly under flags
of convenience, a much lower percentage, while Japan remains steadily in the second
position (Table1). The rise of new maritime nations from Asia was evident; by 1992
8 Maritime Business During the Twentieth Century

China owned more tonnage than Great Britain, while South Korea was close. The
world division of labour in world shipping had changed dramatically.8 The booming
markets of the period 2004–2008 contributed to the sharp increase in the world fleet,
and to the slight change in the hierarchy of world maritime powers. Great Britain and
Norway decreased their fleet and share in the world shipping, while Greece and Japan
followed the opposite direction and increased both their tonnage and share. Germany
made a very impressive comeback rapidly increasing its tonnage, especially of contain-
erships. A remarkable change was that of China. Being the driving force of the world
economy, China is continually developing its fleet. The conditions that prevail in the
world shipping and shipbuilding markets after the collapse of the freight markets in
2008, make safe the forecast that sooner or later, China will become the driving force
in world shipping.

3. SHIPPING MARKETS

Following world shipping developments, the shipping markets had taken its twentieth
century form since the last third of the nineteenth century. Before the 1870s the ship-
ping market was unified. By the last third of the nineteenth century the distinction of
the shipping market into two categories, liner and tramp shipping started gradually
to adapt. Liner ships carried general cargoes (finished or semi-finished manufactured
goods) and tramp shipping carried bulk cargoes (like coal, ore, grain, fertilisers, etc.)
For the next 100 years, until the 1970s, liner and tramp shipping markets continued
more or less on the same lines. This one century of shipping operations can be distin-
guished into two sub-periods (Figure 1).
During the first period, from the 1870s to the 1940s, the cargoes carried by liner and
tramp shipping were not always clearly defined: liner ships could carry tramp cargoes
and vice-versa. Although there was a substitution between the two distinct markets, the
main structures of each one were diametrically different: oligopoly and protectionism
for the liner market with the formation of the shipping cartels from the 1880s, the
conferences, and almost perfect competition for tramp ships.
The unprecedented increase of world production and trade in the first post-World
War II era brought more distinct changes in the structure of the markets that led to
a gradual decrease of substitution between the markets.9 In tramp/bulk shipping, the
introduction of new liquid bulk cargoes on a massive scale, like oil, and of the main
dry bulk cargoes as mentioned above (coal, ore, fertilisers and grain) led to the cre-
ation of specialised bulk markets and to the building of ships to carry specific cargoes
(Figure 1). The liner market continued along the same lines of oligopoly but witnessed
increased competition into their protected markets from competitors from developing
and socialist countries.
The 1970s were the landmark decade for the liner industry; unitisation of the cargoes,
called also containerisation, had been introduced during the 1960s but became wide-
spread during the 1970s, brought a revolution in the transport of liner cargoes (Figure
2).While in 1970 the world container fleet was of 500,000 TEU by 1980 this had increased
by more than six times to reach 3,150,000 TEU.10 The new organisation of liner ship-
ping that demanded excessive investments in infrastructure (terminals, cargo handling
facilities, ships, equipment and agencies), led to an increase in ship and port productiv-
ity, an increase in ship size,11 and economies of scale and decrease of transport cost.12
 Shipping Markets 9

Figure 1: Shipping markets, 1870s–1970s

Shipping Markets 1870’s–1940’s

• Substitution in the markets

• Almost perfect competition

Tramp for tramp ships
Bulk
cargoes ships
• Oligopoly and protectionism
for general cargo ships

• Conferences

General Liner
cargoes ships
General cargoes
Bulk cargoes
Finished and
Coal, grain, semi-finished
iron ore manufactured
fertilisers etc. goods

Shipping Markets 1940’s–1970’s

• Limited substitution in the

markets

Bulk Tramp • Development of more

ships specialised bulk markets
cargoes
• Almost perfect competition
for tramp ships of dry bulk
shipping markets

General Liner • Oligopoly and protectionism

cargoes ships for general cargo ships

• Conferences

• 40-40-20
10 Maritime Business During the Twentieth Century

Figure 2: Shipping markets, 1970s–2000s

Globalised Bulk Shipping - sum of regional markets

My word is my bond • Industry culture that is

. . . . based on trust
. . .. . . . . . . .
. . . . . . . . .
. . . . .. .. . • Formation of networks of
. . . . . . NOR. . . collaborating competitors on
. . . ... . .
. . . . . GR . . . . . . the basis of common culture
. . . . . . . ...... . ..
. . . . . . . . .. • Competitiveness based on
. . . .. . .. .. .. ... . . .
cost
. . .. . ... . ..
. . . . . .
.. . . . .. JAPAN
..
. .
. . . .. .. ... . • Groups of Free Standing
. . . .. .
.. . . .. ...... .
. . . . .. . . .. . . family and managerial
. . . . . ... . .. . .. enterprises of international
.
. . . .. . . . character
BR . . .
. .
. .

Globalised Liner Market

• Economies of scale -
resources specificity and
frequency of transactions
lead to
• Internal development
• Vertical integration
• Mergers and
acquisitions
• Strategic alliances
• Vertically and horizontally
integrated global
companies that cover the
transport needs of
global customers

• Regional companies that

serve regional
demand and feedering for
global players
 Shipping Markets 11

Containerisation included radically new designs for vessels and cargo-handling facilities,
global door-to-door traffic, early use of information technology, and structural change
of the industry through the formation of consortia, alliances and international mega-
mergers.13 The above led to a total transformation of the liner shipping companies that
became the archetype of a globalised multinational shipping company. The high capital
investments required to operate a unitized general cargo transport system led to con-
solidation in liner shipping.14 This transformation was further provoked by the continu-
ous trend to globalisation. Liner companies ought to serve the transport needs of their
customer on a global basis. Although consolidation in liner shipping was increasing from
the 1970s, during the 1990s it progressed faster. Liner companies were enforced to
establish global networks in order to meet their customers’ needs. The enlargement of
the companies’ size through mergers and acquisitions and the formation of global alli-
ances were the necessary steps toward this. Strategic alliances between competitors have
become the dominant form of cooperation in liner shipping.15 Alliances allow competing
liner operators to exploit economies of scope and to offer to shippers global geographical
coverage.16 It has been stated that increased complexity and intra-alliance competition
among partners undermine the stability of strategic alliances.17 Indeed, many changes
have been noted over the years. For example, the Grand Alliance in 1995 had as mem-
bers the Hapag Lloyd, NYK, NOL, and P&O. A few years later MISC entered the alli-
ance while NOL left to follow the New World Alliance. Recently MISC withdraw and
today the alliance includes the Hapag-Lloyd, the NYK and the OOCL, the seventh,
ninth and twelfth biggest liner companies.18
In parallel, strategies of internal development, merger and acquisitions have led to
an increase in the concentration of the supply of liner services. The combined market
share of the top four liner companies increased by 7% in a period of three years, i.e.
from 31% in 2004 to 38.4% in 2007, while the Herfindahl–Hirschmann Index of the
top four players (HHI–4) increased by 182%, from 268 in 2004 to 449 in 2007.19
For example, the biggest liner shipping company in the world, the Danish Maersk,
which has a market share of 15%, operates more than 500 containerships ((two millions
TEU) of which 211 are owned by the company) and more than 50 terminals worldwide,
while its network includes more than 150 local offices worldwide. In 1999 Maersk
acquired Sealand, the biggest American liner shipping company, the first company in
the world to introduce innovative container technology, while in 2005 it acquired P&O
Nedlloyd, then the third biggest liner company. It is thus evident that such a multina-
tional company is a global network by itself and offers global services to its clients. This
kind of development resulted in a total re-structuring in the port systems of the various
regions and created the need for minor shipping lines to serve regional transport needs
or offer feeder services for global liner companies. The major liner companies approach
main international ports, from which minor shipping lines distribute the products to
regional ports through the so-called feedering services.20 These two groups of compa-
nies, the big and minor container companies are not in competition with each other,
rather they complement each other.
On the contrary, the development of tramp shipping did not involve such innovative
technological developments and no dramatic changes took place in the organisation
and structure of markets. The general pattern has not changed over the last 140 years.
However, since the 1970s we are not talking of tramp shipping, but of bulk shipping
since the type of ship does not characterise the market anymore, but instead the cargoes
that are transported. Four main categories of bulk cargo are distinguished:21 the liquid
12 Maritime Business During the Twentieth Century

bulk (crude oil, oil products and liquid chemicals), the five major bulk (iron ore, grain,
coal, phosphates and bauxite), minor bulk (steel products, cement, sugar forest products
etc) and specialist bulk cargoes with specific handling or storage requirements (motor
vehicles, refrigerated cargo, special cargoes). Gradually need adapted to demand, and
the “tramp” ship was replaced by specialised ships that were built according to the
bulk cargoes and the specialised bulk shipping markets; reefer ships for the refrigerated
cargo, chemical tankers for chemical gases, lpg and lng for liquefied petroleum and
natural gas, heavy lift vessels for specific cargoes etc.
Globalised bulk shipping, even to the present day, is an industry based on trust.
Companies form networks of collaborating competitors on the basis of common
national cultures of traditional maritime nations such as Britain, Greece, Norway and
Japan (Figure 2). Even members of the same network compete with each other and
competitiveness is based on cost. During the twentieth century size did not play an
important role in the competitiveness of the company.22 Bulk shipping consists of com-
panies of various sizes – these vary from large companies of more than 50 large ships
to single-ship companies that directly compete with each other. For example in 1970,
the Greek-owned shipping company of Stavros Niarchos and the Norwegian shipping
company of Wilhem Wilhelmsen which operated more than 60 ships co-existed and
competed with the British Turnballs that operated five ships and the various Bergen-
based and Piraeus-based small companies that operated ships of similar characteristics.
Tramp shipping was mainly formed by groups of family enterprises which retained
many characteristics of a multinational enterprise.23 No matter what the size of these
enterprises, their organisation, structure and strategies had a lot in common.24

4. SHIPPING COMPANIES

Overall analysis of the main trends in world shipping fleets and their markets throughout
the twentieth century does not provide us with an understanding of the structure of the
maritime industry. The core of the economy is the firm; the core of the maritime industry
is the shipping company. In this section we will briefly review the actual players, the ship-
ping companies of the four main twentieth century nations: the British, the Norwegians,
the Greeks and the Japanese. In the first three European nations, we can distinguish
similar patterns of organisation and structure in the shipping companies worldwide that
concerned both liner and tramp shipping. First an important aspect of shipping com-
panies was their connection with a specific home port; second was the ownership and
management of the company by distinct families for multiple generations; third was the
use of a regional network for drawing investment funds, and fourth was the existence
of an international network of overseas agencies that collaborated closely with trading
houses on a particular oceanic region, or on a particular commodity trade.25

4.1 The British

British commercial and shipping business in the nineteenth century developed along
the lines of its colonial empire, and the inter-Empire and British external trade that
was operated by close-knit global business networks. At the beginning of the twenti-
eth century British shipping was world’s largest fleet owning 40% of the world’s ton-
nage, followed by Germany which owned one-fourth of its size. In 1918 a government
 Shipping Companies 13

committee reported that “at the outbreak of war, the British Mercantile Marine was
the largest, the most up-to-date and the most efficient of all the merchant navies of the
world”.26 The fleet was particularly hit during the interwar period, where it saw some
of its leading shipping companies like the Royal Mail disintegrate and some of its main
tramp-shipping owners leave the stage. It has been argued that British performance has
been affected by the “unfair competition” of countries that subsidised their liner fleets
like France, Germany, Italy, Japan and the United States, or the low-cost tramp opera-
tors like the Greeks that took large portions of its share in the Atlantic trade, and by the
reluctance of British shipowners to invest in the new technology of diesel engines and
tankers during the interwar period.27
World War II did not really affect the British share in world shipping which by 1948
had reached its pre-war level. Until 1967, Britain despite its decreasing share, remained
world’s maritime leader and UK fleet continued to grow until 1975. Part of its 1975
tonnage, however, the year when the British fleet reached its peak, was foreign-owned
and this “masked the extent to which British interest in merchant shipping had already
declined before the downward plunge after 1975”.28 From 1975 to the beginning of
the twenty-first century there was a continuous decrease in the UK register due to the
“flagging-out” of the British-owned fleet. By 2007 British shipping under all flags was
in tenth position with only 2.35% of world tonnage.29
The regional dimension in maritime Britain has played an important role in the organ-
isation of both tramp and liner business. The main poles of liner shipping have tradition-
ally been Liverpool and London followed by Glasgow and Hull. The newly emerging
liner shipping companies from the mid-nineteenth century onwards were very strongly
connected with a big home port, like London, Liverpool, Glasgow and Hull, where strong
shipping elites were formed.30 For example, the Peninsular and Oriental (P&O), based in
London, was established by Wilcox and Anderson in 1837 and specialised in trade with
India and Australia; the Cunard Company, established by Samuel Cunard, Burns and
the MacIvers in 1839 specialised in the north Atlantic; the British India (BI) shipping
company, based in Glasgow, was established in 1856 by the MacKinnon shipping group
and specialised in the Indian ocean; the Ocean Steam Ship Company known as the Blue
Funnel Line, based in Liverpool, was established by the Holt family in 1865 and special-
ised in trade with southeastern Asia. The Union-Castle Line, was established in the 1850s
and run by Donald Currie, specialised in South Africa by the 1870s, the Elder-Dempster
based in Liverpool, was formed by Alexander Elder and John Dempster in 1868 and spe-
cialised in African trade; Lleyland, Moss, McIver and Papayanni, all based in Liverpool,
were established in the 1840s and 1850s and were involved in the Mediterranean. Hull
was the home port of the Wilson Line, established by the Wilson family – “Wilson’s are
Hull and Hull is Wilson’s” –, that traded in all oceans and seas.31 In 1910 there were
65 liner companies that owned 45% of the British fleet. And all, during the previous
30 years, had organised themselves in closed cartels of the sea, the conferences, according
to the oceanic region they traded, securing their share in the world market.32
The five largest liner companies in 1910 were British India, White Star Line, Blue
Funnel Line, P&O and Elder Dempster (see Table 2). Low freight rates and a wide-
spread depression in the late 1910s led to intense competition and a wave of merg-
ers that produced giant lines in the five years before World War I. The most notorious
example is the Royal Mail Steam Packet Co that from 1903 to 1931 was led by Owen
Philipps (later Lord Kylsant). Within 30 years Royal Mail reached its peak, owning 11%
of British fleet, and its nadir in 1931 when it was liquidified, producing a major crisis
 Table 2: The largest British shipowning groups of the twentieth century (in thousand grt)

1910 1939 1960 1970 1998

Name Nrt Name Grt Name Grt Name Grt Name Dwt
Tramp/Bulk Shipping
Furness Withy 179 British Tanker Co 595 British Petroleum 1383 BP Tanker Co. Ltd 2439 BP Shipping Ltd 2823
Usmar John 108 Anglo–Saxon 376 Runciman 361 Trident Tankers 985 P&O Bulk 2654
Henry (Anglo- Petroleum (United Molasses) Ltd Carriers Ltd
American Oil Co)
Ropner R. 93 Ropner Group of 243 Hunting group 193 Denholm 801 Trader 1381
Companies (Management) Ltd Navigation
Agencies Ltd
Hain Edward 93 Eagle Oil shipping 229 Watts, Watts & Co 187 Common Brothers 707 Ocean Agencies 797
& Sons (Management) Ltd Ltd
Maritime 436
Burrell & Son 79 Hain steamship 159 Denholm Co 160 Overseas Corp.
Liner Shipping
British India 304 P&O group 663 P&O group 2369 Ocean Steam Ship 755 P&O Nedlloyd 2890
Steam (British India Co. Ltd BV*
Steam Navigation)
14 Maritime Business During the Twentieth Century

Ismay Imrie 232 Ellerman Group 651 Furness group 1420 Cayzer, Irvine & 610
(White Star Line) of companies Co. Ltd
Holt A. (Blue 219 Holt A. (Blue 562 Blue Funnel 971 P&O Steam 396
Funnel Line) Funnel Lines) group Navigation Co.
Peninsular 203 Cunard Group of 461 Cunard group 947 Houlder Brothers 366
& Oriental Companies & Co. Ltd
Elder Dempster 202 Furness Lines 426 British and 872
Group of Commonwealth
Companies
Note: For the years 1914 and 1939 ships above 500 grt, for the years 1970 and 1998 ships above 1000 grt.
* Joint-venture of British and Dutch interests.
Sources: Processed data from Lloyd’s Register of Shipping, 1910, 1939, 1970, Shipwatch Directory, 1998. For 1960 data from Sturmey, S.G. (1962): British
Shipping and World Competition (Athlone Press), Table 50.
 Shipping Companies 15

in British shipping business circles. In a remarkable series of acquisitions Royal Mail

acquired Elder Dempster in 1910, Pacific Steam in 1910, Glen Line and Lamport Holt
in 1911 and Union-Castle in 1912.33 Another giant emerged just before the war, when
Peninsular and Oriental apart from the Blue Anchor Line, acquired British India Steam
Navigation and its extensive shipping and trading interests in India. P&O continued its
acquisitions and mergers throughout the interwar period and in contrast to Royal Mail,
remained the largest British shipping concern throughout the twentieth century.
Mergers and amalgamations of lines into groups under common ownership con-
tinued in the interwar period and changed the structure of British liner shipping.34
The economic crisis of the 1930s hit British shipping hard. The contraction of the
tramp shipping sector (which was lost to Norwegians and Greeks) and the concentra-
tion to fewer liner companies was evident: in 1939 there were 43 British liner compa-
nies which owned 61% of the fleet. The demolition of Royal Mail, and the intervention
of the British banking system to save Britain’s largest liner concerns, brought a re-
structure of liner ownership in the 1930s that defined its path in the second half of the
twentieth century.
As Table 2 indicates, in 1939 P&O, the Ellerman group of companies, Cunard, Blue
Funnel and Furness Lines appeared in the top five positions. P&O through consecutive
mergers and amalgamations became the indisputable queen of the Indian Ocean and
Pacific routes; apart from British India Steam Navigation in 1914. In 1917 and 1919 it
acquired another seven lines that serviced those routes. In the 1960s and 1970s P&O
remained the largest shipping group of the world; after the 1970s it adjusted to the con-
tainer revolution, adopted a globalised ownership, expanded to the port terminal busi-
ness and diversified into the bulk, ferries and cruise sectors. In 1996 P&O Container
Limited, the liner branch of the group, merged with Nedlloyd to form P&O Nedlloyd
and the new company became the third biggest liner company, before its acquisition
by Maersk Line. Ellerman acquired a number of smaller Liverpool lines that traded
in the Mediterranean before World War I and its biggest acquisition was in 1916 when
it amalgamated with Wilson Line; its importance contracted in the post-World War II
period. Cunard, another giant of the “big five” of British shipping traditionally engaged
in the Atlantic passenger services since 1840s, had acquired three or four lines during
the second and third decade of the twentieth century. It profited largely from the demo-
lition of Royal Mail when it acquired White Star Line in 1934. Persisting in passenger
shipping, however, it eventually lost its importance in the post-war period.
The Blue Funnel (Ocean Steam Ship Company) group of companies owned by the
Holt family exemplified family capitalism in liner shipping. Based in Liverpool and
specialising in far eastern trade, it also profited from the demolition of Royal Mail and
amalgamated with Elder Dempster which held the African trades. It continued to trade
strongly well into the second half of the twentieth century. The Cayzer family from
Glasgow formed the Clan Line in 1890, established the British and Commonwealth
group in 1956 by amalgamating with the Union-Castle Line, another line that had
belonged to the disintegrated Royal Mail group; it continued its business through-
out the twentieth century. Until the beginning of the twentieth century the Furness
group was one of the main British tramp shipping operators, who later diversified into
liner shipping. By taking part in the acquisitions and amalgamations and exploiting the
demolition of Royal Mail of which it acquired a fair share, it proved, along with P&O, to
be one of the most important shipping groups of the twentieth century; it has also been
among the first British liner groups to continue operating in tramp/bulk shipping.
16 Maritime Business During the Twentieth Century

Liner shipping companies are associated with the most glorious part of British ship-
ping. Liner companies owned the most famous, luxurious steamships of the latest
technology. British liner steamships carried millions of passengers, and became widely
known as the proud manifestation of power of the mighty British Empire which ruled
the waves. Most of the owners of British liner companies, among Britain’s most pow-
erful capitalists, were commoners who became Lords or were knighted: Lord Kylsant
of Royal Mail, Lord Inchcape of British India, Sir Alfred Jones of Elder Dempster, to
mention only a few. British historians have told the stories of the main British liner busi-
ness.35 But liner shipping throughout the nineteenth and twentieth centuries formed
less than half of the large British fleet.
In fact, it was the less glorious ships of less technological achievement that formed
more than half of the British fleet which fed the industries of the Empire. Tramp ship-
ping formed the largest part of the British mercantile marine up to the Great War with
462 companies owning 55% of the fleet. The Industrial Revolution determined the
areas in which British tramp operators developed in close connection with deep-sea
export coal trade: The Northeast ports and Wales became the main hubs of British
tramp-operators in combination with those of the Clyde in Scotland who were tradi-
tionally connected with the trading worldwide networks of the Scottish merchants.
In 1910 the shipping companies of the Northeast ports, namely Newcastle,
Sunderland, Hartlepool, Middlesbrough, Whitby, Scarborough and Hull handled
almost one third of British tramp shipping tonnage.36 Some of the most powerful
British shipping families came from this area: the Furnesses, Turnballs, Ropners and
Runcimans. The next most dynamic group in tramp shipping were Scottish tramp
operators who handled 18% of British tramp shipping in 1910. Some of the best
known Scottish tramp shipowning families were the Burrells and the Hoggarths. Wales
also emerged as a generator of tramp companies. Wales drew human capital from
the West Country as well and shipping companies established in Wales operated 9%
of the British tramp fleet in 1910. With Cardiff as the central port, tramp shipping
thrived in the Welsh ports from Chester to Llanelli.37 The best known Cardiff tramp
operators were the Hains, Morells, Tatems and Corys. London and Liverpool drew
branch offices from almost all these tramp operators and both cities handled 42% of
the British tramp fleet in 1910.
Table 2 indicates the evident importance of tankers and the non-existence of inde-
pendent tanker owners; one of the great failures of British tramp owners was that they
did not enter the tanker business. The main big tanker owners remain the petroleum
companies like the Anglo-American Oil Co in 1910, British Tanker Co and Anglo-
Saxon Petroleum in 1939 and British Petroleum in the post-World War II period. The
new structure in the organisation of tramp/bulk shipping, were the management com-
panies under which one finds some of the traditional British tramp owners. Denholm
Management is a good example of a management company. In 1970 it managed
38 ships for 17 shipping companies including Turnbull Scott Shipping.38
Contrary to the beliefs that want family capitalism to belong only to the Mediterranean,
family prevailed in both the British liner and tramp maritime business. Big liner compa-
nies might have been joint-stock companies, but ownership was usually spread among
a select circle of family and friends; families like the Cayzers, Ellermans, Brocklebanks,
Holts, Furnesses and Swires retained their command over major British lines.39 The
case was stronger in British tramp companies, that were family-owned companies that
kept ownership and management of the companies and used intermarriages to expand
 Shipping Companies 17

and keep the business within closed circles. From the most prominent ones like the
Runcimans, the Turnbulls, the Ropners, to the medium and smaller ones, kept business
in the family for several generations. One of the great handicaps of British shipping,
however, has been the loss of the importance of the regional dimension of maritime
Britain; regions and ports that reproduced shipping entrepreneurship.

4.2 The Norwegians

Norway is considered as a leading maritime nation not only due to the high percentage
of owned tonnage since the nineteenth century, but also due to the shipping sector’s
position in the economy.40 In Norway, “shipping is indeed an industry of its own”.41
Norwegians have traditionally carried bulk cargoes, lumber, grain and fish along the
Northern European and Atlantic routes.42 Shipowing has been an important business
in all ports of Norway’s extensive coastline. The regions of Oslo and Oslofjord, the
South Coast, the Western and Northern Norway included almost 60 ports active in
shipping and shipowning activities, most of whom were engaged in tramp shipping.
More importantly, shipping absorbed a large portion of investment and labour of the
country. The success of the Norwegian shipping industry during the nineteenth
century is related to the “collective mobilisation of resources” at the local level, i.e.
the partsrederi system, according to which, members of the local community provided
resources for the construction and operation of a ship, becoming shareholders of the
shipowning company and receiving the resulting profits.43
With a developed expertise in wooden and later metallic sailing ships that contin-
ued well into the twentieth century some areas, closely connected to the traditional
shipbuilding industry failed to make the transition from sail to steam. The region of
Adger in the South Coast of Norway for example, during the years prior to World
War II, owned between 55% and 58% of the Norwegian iron and steel sailing ship
tonnage, but failed to invest successfully into steam shipping.44
The structural transformations of Norwegian shipping differentiated the relative
importance of each port to its development, without changing the regional pattern.
Shipping companies continued to be located in specific ports throughout the twentieth
century. While the majority of shipping companies are now established in Oslo, ports
like Bergen, Grimstad, Stavanger, Arendal and Kristiansand still remain important
maritime centres. It is argued however that the transition of the Norwegian shipping
from sail to steam meant the emergence of a new “industry (mostly) outside the old
one”. According to Wicken: “The shipping companies were established in urban areas,
mostly around Oslo and Bergen. Many companies were not closely incorporated into
local communities, but emerged from interaction between individual Norwegian entre-
preneurs and large international corporations.”45
As Norway’s external trade could not support the development of a competitive ship-
ping industry, Norwegian shipowners, like the Greeks, based their expansion on their
ability to produce cost-effective shipping services and to serve the needs of international
trade. Equally, they exploited their competence in managing ships and the abundance
of low cost and high quality Norwegian seamen and became the main cross trader fleet
of the world in the last third of the nineteenth century and the first half of the twentieth
century. Their involvement in liner shipping was limited and with the exception of the
interwar period, when a percentage between 25% and 30% was engaged in liner trades,
the corresponding figures for the whole of twentieth century has not surpassed 15%
18 Maritime Business During the Twentieth Century

of the fleet.46 Norwegians invested heavily in bulk shipping and especially in tankers
and have been major players in this sector since the 1920s. The high share of tankers
in Norwegian fleet, along with the high share of motorships and the low average age of
the vessels, are considered as the main features of Norwegian shipping’s rapid expan-
sion during the interwar period.47 The business strategy of expanding the market share
in tanker shipping proved to be a source of strength as well as of weakness. Norway
prospered during the expansion of the tanker market until the 1970s when it was hit
hard during the crisis of 1973.48 Its massive orders for supertankers along with their low
ratio of liquid to fixed asset made them highly vulnerable.49 Despite its diversification to
offshore activities and its exploitation of the know-how in managing ships to enter the
market of third party ship management, it remains a major power in the bulk shipping
industry. However, its leading position in the world fleet is very much down to the inno-
vative strategies of the many shipping companies which from the 1960s onwards entered
specialised bulk shipping markers like those of gas, and chemicals. They are now consid-
ered to be the leading group50 of these markets or that of open-hatch bulk carriers.51
Norwegian shipping is characterised by rivalry and cooperation and a strong empha-
sis on competence and networking.52 A large percentage of shipping companies can be
considered as network firms whose relationships with partners rely on trust.53 In this
context, the role of families in the establishment and development of shipping compa-
nies was crucial. Companies are family owned enterprises of family owned conglomer-
ates.54 Various families, tied to particular ports, established their companies during the
end of the nineteenth century or the first decades of the twentieth century, and most
of them continue to be active to the present day. Bergesen, Olsen, Knutsen, Naess,
Reksten, Odfjell, Rasmussen, Wilhelmsen, Stolt Nielsen, Fredriksen, Westfal-Larsen,
Hoegh and Uglands are only a few of the families that ran the leading companies of
the Norwegian shipping during the twentieth century. Representative cases of family
businesses with a long tradition in shipping are Wilh. Wilhemsen and Odfjell, as both
remained at the forefront of world shipping for the whole of their history.
The company of Wilhelm Wilhemsen was founded in 1861 in Tonsberg by Morten
Wilhelm Wilhelmsen who was also a successful shipbroker. As early as 1870 he started
to invest in steamships acquiring shares in various ships and in 1887 he made his
first steamship purchase.55 By 1910, when the founder of the company died, the fleet
consisted of 31 steamships. In 1911, the company, after several years of scepticism,
finally entered the liner trades in cooperation with Fearnley and Eger operating the
Norwegian Africa and the Australia Line. At approximately the same time Wilhelmsen
entered the tanker market. In 1912 the first two tankers were ordered and a fleet of
this type of ships was created. In the forthcoming years Wilhelmsen’s involvement in
liner trades became stronger while the tanker operation was abandoned. After World
War II, Wilhelmsen focused again on tanker business and in expanding in the liner
trades. Although during 2000 it was still active in the bulk sector, its core activity was
in liners and it was considered as the leader of Ro-Ro and Car Carriers sector.56 In
1999 the Wilhelmsen Lines merged with the Swedish Wallenius Lines creating a world-
wide network, which was further expanded with the acquisition of the car carrier divi-
sion of Hyundai Merchant Marine in 2002. Today, the Wilhelmsen group is involved
in many sectors of international shipping. Operating a fleet of 166 car cariers and
Ro-Ro through three different operating companies (Wallenius-Wilhelmsen Logistics,
EUKOR Car Carriers and American Roll-on-Roll off Carrier) controls 27% of the
global car carrier fleet.57 The Group is also active in the third-party management sector
 Shipping Companies 19

as well as in maritime services and logistics. After more than 140 years, Wilhelmsen is
still a dynamic globalised shipping group, which remains family controlled.
Odfjell was established in 1916 in Bergen by Abraham and Frederik Odfjell, both
captains. During its early years the company was active in tramp shipping, operat-
ing dry cargo ships, while during the late 1930s it expanded to specialised tankers
which carried different liquid cargoes. During the late 1950s the Odfjell family decided
to increase involvement in the specialised market for chemical cargoes. The company
gradually reduced its involvement in bulk markets focusing on chemicals.58 During
the late 1960s Odfjell entered the tank storage business. This shift to specialisation
included certain innovative strategic decisions that gave Odfjell a clear head in the
chemical market and made the company the leading Norwegian chemical tanker opera-
tor. Cooperation with other companies, (for example the Westfal-Larsen & Co and
Christian Haaland of Haugesund), technological innovation and vertical integration
contributed to Odfjell’s dominance in the chemical market.59
In 1986 the company was listed on Oslo Stock Exchange but the control remained
with the Odfjell family. In 1990s Odfjell implemented a strategy of expansion with
sophisticated new ships as well as with second-hand purchases.60 In 2000 following
the consolidation trends in the chemical market it merged with the chemical branch of
Greek-owned company Ceres which owned a fleet of 17 chemical tankers operating in
the Seachem pool. After the merger the Odfjell family owns 28% of the shares and the
Livanos family 18.5%. This merger brought together two traditional families and cre-
ated synergies not only on the tangibles, but even more importantly on the intangibles.
Odfjell cooperates mainly on a 50–50% basis with companies that are active in regional
trades. Its fleet consists of 93 parcel tankers (March 2009). It owns and operates tank
terminals in Europe, America and Asia, while it is also active in the tank container busi-
ness. Odfjell considers itself as a “leading logistics service provider of specialty bulk
liquids” on a worldwide basis,61 which continues to operate its businesses from Bergen.
Norwegian shipping also consists of leading entrepreneurs like E.D. Naess and
H. Reksten, whose lives were constantly compared with the Greeks Onassis and
Niarchos. The Norwegian US citizen Erling Dekke Naess became active in shipping
after having studied and worked in the UK. Having invested extensively in whaling in
the 1920s, he entered the tanker business in the 1930s. With the outbreak of World War
II Naess moved to New York and there he became head of Nortraship, the governmen-
tal organisation that administered Norway’s requisitioned merchant fleet to the Allies.
Naess became one of the major shipping players in the newly emerging America’s eco-
nomic capital New York. His relations with American oil companies and his involve-
ment in the tanker business and flags of convenience made him among world’s largest
cosmopolitan shipowners. Involved both in dry and liquid bulk shipping, like his Greek
counterparts, in the 1950s he turned to the cheap and efficient Japanese shipyards
to order his bulk carriers and tankers. Using Bermuda as his official base, he really
administered his fleet from London with his Anglo-American Shipping company. This
eventually became Anglo-Norness and collaborated closely with the British P&O.
But it was his decision to sell his fleet for $208 million a few months before the first
oil boom and the great depression in the tanker freight markets that made him known
as the shipowner who predicted the oncoming crisis. Naess attributed this decision
to his study of the business cycles.62 It is very probable, however, that at that point in
time Naess was not the owner of “his” fleet which belonged to the company Zapata
Norness, but was only “an honorary chairman of the board” as it was reported that he
20 Maritime Business During the Twentieth Century

had already sold his fleet for a much lower price in the 1960s.63 Whatever the truth,
his exodus remained glamorous, and he never stopped his interests in shipowning. In
collaboration with the Greek tanker owners he established the Intertanko in the mid-
1970s of which he became President, while he returned to business again in the early
1980s. His use of various nationalities to shelter his companies, of various flags on his
ships, and of crews of various nationalities mean that most Norwegian analysts not
regard him as a Norwegian shipowner, and not to include his ships in the Norwegian
fleet. A nation that prided itself on its maritime infrastructure only accepted the term
Norwegian-owned after the 1980s crisis and the formation of NIS.
Hilmar Reksten followed a path similar to that of Naess – his ending however was dif-
ferent, as he was hardly hit by the depressed freight rates of the 1970s. In his case, the
strong involvement in tanker business functioned both as strength and weakness in the
different phases of the downfalls and upheavals in the shipping business. Reksten ordered
his first tanker in 1938 and expanded into the tanker sector after World War II. He was
convinced about the high profits to be made from tankers, so he focused on the market for
oil transport, created a fleet of large tankers and operated them in the spot market.64 This
strategy proved extremely successful in the period before 1973, when the freight rates were
continuously rising. Reksten became one of the biggest tanker owners worldwide, but this
strategy proved unsuccessful in the depressed freight markets after 1974 and finally led to
bankruptcy in the late 1970s. His chartering strategy made him the shipowner who “had
more tonnage available for assignments in the red-hot spot market” than any other, but a
few years later made him the one who “had more tonnage laid up than any other”. Thus,
his “spectacular rise was overshadowed by his even more spectacular downfall”.65
But Norway is a maritime nation, and apart from the above mentioned well-known
shipowning families, the backbone of the fleet still rests in the hundreds of small shipping
companies active in shipping for shorter or longer periods, which although not as innova-
tive and dynamic as the larger companies, have contributed to making Norway among
the top maritime nations worldwide. The shipping companies are at the core of the
Norwegian Maritime Cluster which consists of various internationally competitive sec-
tors (shipping, ship brokers, ship consultants, yards, equipment, other shipping services,
shipbuilding, shipbrokering, classification etc) located along the Norwegian coast.66

4.3 The Greeks

If at the northest tip of Europe lies one of the most dynamic European nations, at the
southeast tip of Europe lies another dynamic maritime nation that became the world
leader in the maritime business over the last 30 years. Greek-owned shipping devel-
oped since the nineteenth century as an international cross trader almost exclusively
involved into tramp shipping. It carried bulk cargoes, particularly grain, from the Black
Sea and coal from north western Europe, along the routes of Mediterranean waters.
Greek-owned shipping eventually evolved into a worldwide tramp shipping fleet in the
twentieth century. Its main strength was the development of a tight maritime business
network in Europe in the nineteenth century and globally in the twentieth.67
In 1850, just 20 years after the formation of Greece, the small backward state owned
a fleet almost equivalent to that of Holland and Norway. Although by 1880 the Greek
fleet could not compare to those of Britain, Norway, Italy, France or Germany, it was
in the same league as Russia, Sweden and Spain and was larger than those of Denmark,
the Netherlands, Austria-Hungary or Portugal. In 1910 Greece had the ninth largest
 Shipping Companies 21

fleet in Europe, which consisted almost exclusively of ocean-going vessels for the trans-
port of bulk cargoes and tramp ships engaged in the international cross trades. By com-
parison, the fleets of Russia, Austria-Hungary, Italy, France and Spain consisted mostly
of liners operating on regular routes and owned by large, often subsidised, shipping
companies which essentially carried passengers and industrial or package products.68
During the interwar period world shipping faced severe problems stemming from a
contraction of seaborne trade, decreased world migration and increasing protection-
ism. World War I weakened Britain and allowed competitors to challenge its maritime
hegemony. The Greeks took advantage of the disposal of tonnage at extremely low prices
and were able to expand during the worst period of the crisis. The fleet, which suffered
severe losses during World War II not only reconstructed itself after the War, but also
grew at an unprecedented rate. Until the 1960s the main maritime nations remained
the same, with Britain and the US clinging to their decreasing share of world shipping,
followed by Greece, Japan and Norway. Although flags of convenience were widely used,
in the immediate postwar years they were resorted to more extensively by Greek owners.
The 1970s marked the start of a new era; this was characterised by the final loss of the
pre-dominance of European maritime nations, with the exception of the Greeks who
have maintained their leadership to the present day.
Timely adjustments to changes of world trade and to technological shifts kept Greek
shipowners in the forefront of world shipping. The spectacular growth of Black Sea
grain exports in which the Greek sailing ship fleet was involved, provided the capital for
the subsequent transition from sail to steam by Greek shipowners that was completed
at the turn of the twentieth century. After World War I the lost steamships were replaced
by the “standard” type of cargo ships that were built during the war while after World
War II, the lost ships were replaced by the war-built “Liberty ships” which became the
standard dry-bulk cargo vessels for the next 25 years.
Part of the Greeks’ success during the postwar period was due to their entry into
the tanker market in the late 1940s and the 1950s. The first shipowners to do so were
Aristotle Onassis and Stavros Niarchos, both of whom benefited from the Norwegian
experience in tankers at this propitious international conjuncture. Niarchos’ and
Onassis’ expansion strategy was quickly followed by many of the successful “tradi-
tional” shipowners, primarily those who had settled in New York during the World
War II. The trailblazers’ success also created access to the American financial market
for other Greek shipowners. By 1974 the Greek-owned tanker fleet had become the
largest in the world, comprising 17% of the global fleet. Starting from scratch in 1945,
this fleet reached 8.2 million grt in 1965; 14.7 million grt in 1970; and 21.8 million grt
in 1974. Tankers represented between 40 and 48% of the overall capacity of the Greek-
owned fleet in the years 1958–1975.
Family capitalism that prevailed in the structure of Greek-owned maritime business
was also pivotal in the success of the fleet. At the beginning of the twentieth century
there were about 200 families, all specialised now in shipping, running 250 shipping
firms. By the end of the twentieth century about 700 families were running more than
1,000 shipping firms. After a short interval in New York, in the 1940s and 1950s, by
the last third of the twentieth century the Greek-owned fleet had the same operational
centres (Piraeus and London) as at its beginning, but its entrepreneurial network was
not now confined to European waters but extended to all oceans of the world.
The management, and all the branch offices of Greek shipping companies through-
out the twentieth century continued to be in the hands of members of the same family
 Table 3: The largest Greek shipowning groups of the twentieth century (in thousands )

Name Nrt Name Grt Name Grt Name Grt Name Dwt
1914 1938 1958 1975 2008
Embiricos 92.5 Kulukundis Group 145.3 Goulandris 1,176 Goulandris 2,578 Angelicoussis I. 9,130
Group P. sons P. sons (Maran Tankers-
Maran Gas)
Scaramanga 24.2 Goulandris Bros 74.5 Onassis A. 1,098 Onassis A. 2,562 Economou G. 8,754
Bros (Cardiff-Dryships)
Dracoulis Bros 20.4 Livanos S.G. 57 Niarchos 1,033 Lemos C.M. 2,274 Tsakos P. 6,639
(Theofano) Stavros (Tsakos–TEN)
Svoronos 20.1 Nomikos Petros 39.9 Livanos S.G. 785 Niarchos 1,786 Prokopiou G. 5,911
Stavros (Dynacom)
Michalinos 19.3 Chandris I.D. 37.7 Kulukundis 730 Kolokotronis 1,581 Diamantidis D. 5,082
Group M. (Marmaras-Delta)
Vagliano A.S. 18.1 Lykiardopoulos 36.3 Lemos C.M. 530 Goulandris 1,333 Restis 4,904
N.D. N. sons V.(Enterprises-
Golden Energy)
Panellinios 17.8 Kassos Navigation 35.4 Goulandris 420 Livanos G.S. 1,219 Georgiopoulos P. 4,620
Atmoploia (Rethymnis, N.G. sons (Genmar-Genko)
Pneumaticos)
Lykiardopoulos 14.4 Nikolaou 34.7 Goulandris 320 Coulouthros 817 Haji-ioannou P. 3,932
22 Maritime Business During the Twentieth Century

Bros N. (Polyar)
Greek 12.8 Yannoulatos Bros 31.7 Embiricos 280 Chandris 791 Martinos C. 3,816
Transatlantic (ELMES) S.G. Bros (Thenamaris)
Steamship Co
Yannoulatos 11.9 Embirikos S.G. 27.6 Chandris 200 Kulukundis 712 Panayiotides G. 3,615
Bros Bros Bros (Excel-Quintana)
Total of ten 251.5 520.1 6,572 15,653 56,223
companies
Total of Greek- 822.9 1,889 10,425 45,392 174,570
owned fleet
Share of ten 31% 28% 53% 34.5% 32.2%
largest
Source: Gelina Harlaftis (2001). A History of Greek-owned Shipping, 19–20th centuries, Nefeli, Athens, Table 11.5, (in Greek), Naftiliaki, Summer 2008.
 Shipping Companies 23

or co-islanders. In this way kinship, island and ethnic ties ensured the cohesion of
the international Greek maritime network. The unofficial but exclusive international
“club” was extremely important for their economic survival. It provided access to all
the expertise of shipping: market information, chartering, sales and purchase, ship-
building, repairing, scrapping, financing, insurance and P & I clubs. It also provided
consultancy from older and wiser members and information about the activities of the
most successful members of the group. Imitation proved an extremely useful “rule-of-
thumb”. The main strength of the Greeks then, has been the formation of an exclusive
“Greek” transnational network of family enterprises that interacted with local, national
and international shipping networks and organisations, local, national and international
financial institutions and organisations.
The regional dimension has also proved extremely important in Greek-owned ship-
ping. During the first two thirds of the twentieth century the so-called traditional ship-
ping families, all involved for multiple generations in shipping activities, predominate
and came from the islands of the Ionian and the Aegean. On the eve of World War I the
biggest shipowning groups came almost exclusively from the islands of the Ionian sea,
as a continuity of the entrepreneurial networks of the nineteenth century. Apart from
the Embiricos family that originated from the Aegean island of Andros, and formed the
most powerful shipowning group of the first third of the century, the rest, Dracoulis
Bros, Svoronos, Lykiardopoulos, Yannoulatos and Vaglianos came from the Ionian
islands of Cephalonia and Ithaca (see Table 3). The importance of shipowners from
Chios did not begin but later; in 1914 only the shipowning groups of Scaramanga and
Michalinos stemmed from Chios.
If the Ionian Sea dominates in the first third of the century, in the last two thirds
the Aegean took over. It is in the interwar period that the family groups of the mari-
time islands of the Ionian were replaced by the family groups of the Aegean islands.
In this way, the five brothers of Ioannis Goulandris from Andros, the five sons of Elias
G. Kulukundis from Kasos, the sons of the Embiricos from Andros, the four sons of
George Livanos, the two sons of the Ioannis Chandris and those of the large family of
Laimos, all from Chios, served as officers on their fathers’ steamships and eventually
became directors in the offices in Piraeus and London and shipowners themselves.
For more than 60 years, as Table 3 indicates, the same names of the above men-
tioned families figure in the top ten positions of Greek shipping. The only “foreigners”
that broke into the tightly knit shipowning circle were Aristotle Onassis and Stavros
Niarchos, both of whom, however, followed the rules. They married within the tradi-
tional shipowning circle – the daughters of Stavros Livanos. The importance of the
old traditional families, most of them active for at least three generations, eventually
started to fade and give way to new shipowners; the new blood in Greek-owned ship-
ping came from masters, first engineers and employees of shipping companies. In the
list of the top shipowners of 2008 as it appears in Table 3, none of them came from
traditional families. They were new, post-war shipowners: Angelicoussis, Economou,
Tsakos, Prokopiou, Diamantidis, Restis, Georgiopoulos, Haji-ioannou, Martinos and
Panayiotides. The strength of Greek-owned shipping was that it managed to reproduce
itself and provide new and dynamic entrepreneurs that enlarged the fleet to unprec-
edented size at the beginning of the twenty first century. And as in the Norwegian
case, apart from those found in the top, it is the hundreds of medium- and small-scale
shipowning companies who form the backbone and the seedbed for the expansion of
Greek-owned shipping.
24 Maritime Business During the Twentieth Century

4.4 The Japanese

Japan’s unique seclusion from the world trade for more than two centuries, makes
its maritime history of the last 100 years quite extraordinary. The Japanese could not
escape integration into the world economic system; the United States needed bases
for their merchant fleets and were able to persuade Japan to open up to the “barbar-
ians” in 1853. The demand for modernisation brought the end of the old feudal system
and the shogun. Japanese business, its dominance in the world economy of the twen-
tieth century has attracted the attention of a number of economists and historians;
the incredible “otherness” however, combined with the language barriers, still means
that its maritime business history remains, for many, a terra incognita.69 For the pur-
poses of this chapter we will limit ourselves to a short analysis of the continuity and
change of the Japanese maritime business, which remains highly comparable to that of
its European counterparts.
It was really by following the Meiji (the enlightened power) Restoration in 1868
and the nation’s industrialisation that Japan’s shipping showed a remarkable expan-
sion: in the mid-nineteenth century Japan did not own a single ocean going vessel
– 60 years later it was third in the world maritime powers. The rapid development
of Japanese shipping was the product of a combination of government initiative and
active entrepreneurship. Japanese shipping developed, like the British, by serving the
country’s external trade and has been equally divided between liner and tramp. The
competitiveness of Japanese shipping firms however, was to a great extend the result
of a strategy of creating cooperating links with foreign companies in global webs that
connect networks of different countries.70 The first period of Meiji Restoration was
marked by the government support to the private line Mitsubishi Shokai. In the early
1880s the Government provided half of the capital for the establishment of a new firm,
the Kyobo Unyu Kaisha. The intense competition between the two companies led the
Government to pursue their amalgamation, thus, a new state aid firm, the Nippon
Yusen Kaisha (NYK, Japan Mail Steamship Company Ltd) was established. The com-
pany operated with this status, providing specified services up to 1892, when it became
a private enterprise.71 It expanded into transoceanic business in 1890s by opening lines
to India, the USA, Australia and Europe.72 NYK remained the largest Japanese ship-
ping company for most of the time after its founding. Based in Tokyo, it was meant as
a liner company from the beginning. The other company emerged from Japan’s private
businessmen and in that contrasted the formation of NYK. Based in Osaka, Osaka
Shosen Kaisha (OSK, Osaka Mercantile Steamship Co) emerged in 1884 from the
combined forces of Osaka’s leading 55 shipowners and merchants. OSK was subsidised
and in return provided regular services. Both NYK and OSG operated in a way similar
to that of British firms, purchased their ships from Britain and employed western deck
officers and engineers.73 Unlike its competitor NYK, the OSK operated its fleet mainly
within East Asia up to the early stage of the interwar years.74
Japanese shipping companies were of two types. The first type was called shasen
and included those companies that owned most of their ships, operated regular lines
and were receiving government subsidies. The second type was called shagaisen and
included firms that, usually, operated irregular lines and did not receive subsidies. This
second type included firms that were owners of their ships, others that were operators
and others that combined both functions.75 Since these two large shipping compa-
nies were distinguished from all others in terms of their size, type of operation and
 Shipping Companies 25

government subsidy, their ships were called shasen (company ships), while all the others
were called shagaishen (non-company ships). These terms roughly indicated the differ-
ence between liner and tramp shipping. Numerous shagaishen firms stemmed from
the traditional shipowners or operators that traded in the coastal trade and Japanese
seas. They were mainly tramp operators who, particularly during and after World War I,
extended their activities in overseas trade to Korean and Chinese coasts.
Being able to operate more freely and flexibly during World War I Japanese ship-
ping was one of the primary beneficiaries of the war, in terms of profitability.76 The
limited loss of Japanese fleet during World War I (7% of its tonnage) meant that in the
interwar period, Japanese shipping expanded and its network of routes was extended
to all regions of Southeast Asian, to India, Africa and South America. NYK and OSK
were able to become part of the British system of conferences and opened their path
to the City of London and the Baltic Exchange. During the shipping boom of World
War I a large number of capitalists invested in ships and the tonnage of shaigasen
companies increased impressively. Most of the shaigasen shipowners were not opera-
tors themselves but chartered their ships to foreign and Japanese trading companies
as well as to the NYK and OSK. In the 1930s five large-scale shaigasen operators,
Yamashita, Mitsui, Kawasaki, Kokusai and Daido came to dominate Japanese shipping
along with the NYK and OSK. Yamashita, based in Kobe, specialised in long-distance
ocean-going shipping, while Kawasaki profited from its connection with its production
in its shipyards. All shaigasen Japanese companies had access in the London maritime
market and were involved in the British second-hand sales and purchase market.
The third forerunner of Japan’s steam shipping, and different from the above started
from the Mitsui family, who had prospered in Japan as merchants and financiers since
the late seventeenth century, and who were the prime financiers of the new Meiji gov-
ernment. They established in 1876 the Mitsui Bussan Kaisha (MBK, Mitsui Trading
Co) that with branch offices in Shanghai, Hong Kong, Paris, New York, London and
Singapore was oriented in foreign trade, dealing with both bulk trade (coal, rice, cot-
ton) and general manufactured goods.77 Mitsui, that was part of the sogoshosha (gen-
eral trading company) system, operated a large fleet to cover its transport needs. This
company proved to be the pioneer in the eventual expansion of Japanese firms on a
global basis. It was the first Japanese firm to penetrate global commercial networks, as
it opened its London branch in 1879.78 In the post-war era, the company expanded and
eventually became the main competitor of NYK by merging with OSK – what came
to be called MOL (Mitsui-OSK Lines).79 The merger was the result of the consolida-
tion process of Japanese shipping, which, apart from it, resulted also to the merge of
Nitto Shoshen and Daido Kaiun to form the Japan Line and the Yamashita Kisen and
Shinnihon Kisen to form the Yamashita Shinnihon Steamship Co.
If the first half of the twentieth century formed the base for the development of
Japanese shipping, the second half created the conditions for its proliferation. The ships
lost during the World War II were quickly replaced by new, technologically advanced
ships. Demand conditions and the existence of related and supporting industries are
considered to be among the features that can define the prospects of a national indus-
try to compete in the world markets.80 During its modern history, but especially in the
second half of the twentieth century, Japanese shipping developed to respond on the
needs of a high volume internal demand. In 2001 the import dependency of Japan in
major resources accounted 97.9% for coal, 99.7% for crude oil, 96.9% for natural gas,
100% for iron ore, wool and raw cotton, 94.7% for soy beans, 88.8% for wheat and
26 Maritime Business During the Twentieth Century

84.6% for salt.81 Japan’s dependency on seaborne trade led the shipping industry in
search of technological and managerial innovations that, on the one hand would increase
the effectiveness of shipping companies, while on the other would decrease the transport
cost of both the raw materials and the final products of the industries. These innovations
have allowed, for example, the Japanese steel firms to be competitive in world markets,
although they have to import very much of their needed raw materials.82
The internationally competitive shipbuilding industry of Japan played a crucial role
in this effort and continues to do so. Its development however, was not depended on
the development of shipping industry. Of course, it offered the demand conditions
that defined the prospects of shipbuilding industry to become competitive and pen-
etrate the export market and to attract orders by shipowners of new dynamic fleets, like
the Greeks, who became the main customers of the Japanese shipbuilders from 1960s
onwards. This self-contained path of shipbuilding industry explains why its market
share achieved the 50% (the late 1960s) while the respective of the shipping industry
did not exceed the 15.5% (in 2008).83
Japanese shipping continues to be dominated by a few number of giant shipping
groups, who manage a great number of owned ships, as well as an even greater number
of chartered ships, many of them owned by other Japanese companies. For example,
Mitsui OSK Lines operates a diversified fleet of more than 800 ships, the NYK a fleet
of almost 800 ships and the K-Line a fleet of almost 500 ships. In parallel, a great num-
ber of medium sized operators, active mainly in bulk shipping add to the dynamism of
Japanese shipping industry.

5. CONTINUITY AND CHANGE

The analysis of the shipping industry and of the main markets has revealed the structural
transformations and changes that occurred during the twentieth century. The hierarchy
of maritime powers changed, as new maritime nations emerged and most traditional
maritime countries lost their competitiveness and decreased their market share. The
changing patterns of development in the international trade along with the technologi-
cal advances determined the path of the industry. Shipping markets have followed the
path to globalisation and specialisation has become the drive for their development.
In this context, shipping companies have moved towards the necessary organisational
adaptations. Liner shipping companies expanded to the newly developed markets and
served almost any destination worldwide. The need for efficiency and effectiveness led
them to adapt to unitisation investing in containerships and terminals and gradually
turned to become transport providers that cover the needs of their customers in a
global basis. The main drive for the achievement of both the critical size and the global
coverage are new forms of cooperation that is, the consortia and the strategic alliances.
Either through cooperation, internal development or mergers and acquisitions, liner
operators strive to become the global players of a global market. In a rather playful
game of fate, the beginning and the end of the twentieth century were marked by the
same trends.
Bulk shipping continues to be a sum of markets that are organised along the needs
of the cargoes they transport. Contrary to the liner sector, bulk shipping continues to
be characterised by volatility, which increased the risk for the companies. Decisions
regarding the choice of the type of ship, the timing of the investment and chartering
 Endnotes 27

determine the long-term survival of the companies. Information remains one of the
most critical factors for success. Dry, liquid and specialised markets like gas and chemi-
cals create a mosaic that incorporates many distinct organisational forms. For the more
recently created specialised markets, concentration of tonnage and consolidation of
companies were the means for companies who seek to cover the transport needs of
global customers. For the dry and liquid markets on the other hand, the tramp char-
acter continued to exist throughout the past century, although certain transformations
have diminished its presence.
Structural changes on the demand side have provoked the introduction and disparity
of cooperation of the commercial side of their operation, mainly through the formation
of pools. Trust continues to be at the core of the business: for the main players it is the
factor that allows the formation of networks of collaborating competitors. Bulk ship-
ping has traditionally been a sector that rewarded the entrepreneurial spirit, adaptation
and flexibility. The business environment for bulk shipping companies during the past
century became more regulated and shipping operation more formalised. To a certain
extent however, these changes diminished the entrepreneurial character and created
the need to balance between the necessity to conform to the business’s environment
requirements and the necessity to adapt for competitiveness. Still, the beginning and
the end of the past century saw the largest part of world’s main tramp operators work
more or less on similar lines.

ENDNOTES

1. Harlaftis, G. and Theotokas, I. (2004): “European family firms in international

business: British and Greek tramp shipping firms”, Business History, Vol. 46, No. 2,
219–255.
2. Fischer, L.R. and Nordvik, H.W. (1986): “Maritime Transport and the Integration
of the North Atlantic Economy, 1850–1914”, in Wolfram Fischer, R., Marvin
McInnis and Jurgen Schneider (eds.) The Emergence of a World Economy, 1500–1914
(Wiesbaden, Franz Steiner Verlag). See also O’Rourke, K. and Williamson, J.G.
(1999): Globalization and History. The Evolution of Nineteenth Century Atlantic
Economy (MIT Press), and Harlaftis, G. and Kardasis, V. (2000): “International
Bulk Trade and Shipping in the Eastern Mediterranean and the Black Sea”, in
Williamson, J. and Pamuk, S. (eds.) The Mediterranean Response to Globalization
(Routledge).
3. Eden, R. and Posner, M. (1981): Energy Economics (New York); Harley, C.K.
(1989): “Coal Exports and British Shipping, 1850–1913”, Explorations in Economic
History, XXVI.
4. Sturmey, S.G. (1962): British Shipping and World Competition (The Athlone Press),
pp. 75–79. In fact, expansion of Norwegian shipowners to the ownership of tank-
ers is considered as one of factors that contributed to the rapid development of
Norwegian fleet during the interwar period. See Tenold S. (2005): “Crisis? What
Crisis? The Expansion of Norwegian Shipping in the Interwar Period”, Discussion
Paper 20/05, Economic History Section, Department of Economics, Norwegian
School of Economics and Business Administration.
5. More on the subject and for further bibliography see Harlaftis, G. (1996): A History
of Greek-owned Shipping, 1830 to the Present Day (Routledge), Chapters 6 and 8.
28 Maritime Business During the Twentieth Century

6. For an insightful analysis see Cafruny, A.W. (1987): Ruling the Waves. The Political
Economy of International Shipping (University of California Press). For a classic
on flags of convenience, see Metaxas, B.N. (1985): Flags of Convenience (London,
Gower Press). For the resort of the Greeks to flags of convenience see Harlaftis, G.
(1989): “Greek Shipowners and State Intervention in the 1940s: A Formal
Justification for the Resort to Flags-of-Convenience?”, International Journal of
Maritime History, Vol. I, No. 2, 37–63.
7. Sletmo, G.K. (1989): “Shipping’s fourth wave: ship management and Vernon’s
trade cycles”, Maritime Policy and Management, Vol. 14, No. 4, 293–303.
8. See Thanopoulou, H. (1995): “The growth of fleets registered in the newly-emerging
maritime countries and maritime crises”, in Maritime Policy and Management, Vol. 22,
No. 1, 51–62.
9. More on the substitution relationship of the tramp with the liner see Metaxas,
B.N. (1981): The Economics of Tramp Shipping (2nd edn) (London, Athlone Press),
pp. 111–116.
10. Data contained in Stopford, M. (1997): Maritime Economics (2nd edn) (London,
Routledge), p. 341.
11. According to data of AXS-Alphaliner, in 1 July 2009 the 38 ships in range of 10,000
to 15,500 TEU consisted of the 0.9% of the the world liner fleet while the same
percentage of the orderbook was 18.1% (173 out of 955). Data available at www.
axs-alphaliner.com (accessed on 15 July 2009).
12. For an analysis of the evolutions in the liner shipping, see Haralambides, H. (2007):
“Structure and Operations in the Liner Shipping Industry”, in Hensher, D.A. and
Button, K.J. (eds.) Handbook of Transport Modelling (Elsevier), pp. 607–621.
13. See the excellent analysis of Broeze, F. (2003): The Globalisation of the Oceans.
Containerisation from the 1950s to the Present, Research in Maritime History,
(St. John’s, Newfoundland).
14. Stopford, M. (1997): op. cit., p. 377.
15. Ryoo, D.K. and Thanopoulou, H.A. (1999): “Liner alliances in the globalization
era: a strategic tool for Asian container carriers”, Maritime Policy and Management,
Vol. 26, No. 4, 349–367.
16. Haralambides, H. (2007): op. cit.
17. Midoro, R. and Pitto, A. (2000): “A critical evaluation of strategic alliances in liner
shipping”, Maritime Policy and Management, Vol. 27, No. 1, 31–40.
18. According to data of AXS-Alphaliner available at www.axs-alphaliner.com/top100/
index.php (accessed 21 July 2009).
19. UNCTAD (2007): Transport Newsletter, No. 36, Second Quarter (Geneva,
UNCTAD). The following data for the bulk shipping could be mentioned as an evi-
dence of the different ownership structure of Liner and Bulk shipping. According
to data of Clarkson Rersearch Studies, during 2003, there were five companies
operating more than 100 ships, whose fleet percentage of the bulk carrier fleet
was 14.3%. See Clarkson (2004): The Tramp Shipping Market, Clarkson Research
Studies, p. 37.
20. Broeze, F. (1996): “The ports and port system of the Asian Seas: an overview with
historical perspective from the 1750” The Great Circle, Vol. 18, No 2, 73–96.
21. Stopford, M. (1997): op. cit, pp.16–17.
22. However, regulations imposed on the shipping industry during the 1990s are
among the factors that have contributed to the increase of the importance of the
 Endnotes 29

company size to the competitiveness of bulk shipping companies. For more on the
subject see Theotokas, I.N. and Katarelos, E.D. (2001): “Strategic choices for small
bulk shipping companies in the post ISM Code period”, Proceedings of WCTR,
Seoul, Korea.
23. Carvounis, C.C. (1979): “Efficiency contradictions of multinational activity: the
case of Greek shipping”, unpublished Ph.D. thesis (New School of Social Research),
p. 81.
24. Harlaftis, G. and Theotokas, I. (2004); op. cit.
25. Op. cit.
26. Cited in Palmer S. (2009): “British Shipping from the Late Nineteenth Century
to the Present”, in Fischer, L.R. and Lange, E., International Merchant Shipping
in the Nineteenth and Twentieth Centuries. The Comparative Dimension, Research in
Maritime History No. 37 (St John’s, International Maritime Economic History
Association), pp. 125–141, 129.
27. Thornton, R.H. (1959): British Shipping; Sturmey St. (1962): British Shipping and
World Competition. See also Palmer, S. (2009): op. cit. for an overall view of these
arguments and the counterarguments.
28. Palmer, S. (2009): op. cit. Figure 4, 135.
29. Op. cit.
30. There is a large bibliography on the liner shipping companies; leading role was played
by the so-called “Liverpool School” founded by Professor Francis Hyde, main fac-
tor also in the creation of Business History. See Hyde, F.E. (1956): Blue Funnel: A
History of Alfred Holt & Company of Liverpool 1865–1914 (Liverpool); Hyde, F.E.
(1967): Shipping Enterprise and Management, 1830–1939: Harrisons of Liverpool,
(Liverpool); Marriner, S. and Hyde, F.E. (1967): The Senior: John Samuel Swire
1825–98. Management in Far Eastern Shipping Trades (Liverpool); Hyde, F.E. (1975):
Cunard and the North Atlantic, 1840–1914 (Liverpool); Davies, P.N. (1973): The Trade
Markets: Elder Dempster inWest Africa (London); Sir Alfred Jones: Shipping Entrepreneur
par Excellence (London). For P&O see Cable, B. (1937): A Hundred Year History of
the P&O 1837–1937 (London); Howarth, D. and Howarth, S. (1986): The Story of
P&O (London) and Rabson, S. and O’Donoghue, K. (1988): P&O. A Fleet History
(Kendal); Napier, C.J. (1997): “Allies or Subsidiaries? Inter-Company Relations in
the P&O Group, 1914-39”, Business History, Vol. 39, 67–93. For British India (BI)
see Munro, Forbes J. (1988), “Scottish Overseas Enterprise and the Lure of London:
The Mackinnon Shipping Group, 1847–1893”, Scottish Economic and Social History,
Vol. 8, 73–87. “Sir William Mackinnon” in Slaven, A. and Chekland, S. G. (ed.)
Scottish Dictionary of Business Biography (Glasgow, 1990), Vol. 2, pp. 279–301. “Suez
and the Shipowner: The Response of the Mackinnon Shipping Group to the Opening
of the Canal, 1869–84” in Fischer L. and Nordvik, H. (1990): Shipping & Trade,
pp. 97–118; Munro, Forbes J. (2003): Maritime Enterprise and Empire: Sir William
Mackinnon and his Business Network, 1823–93 (Woodbridge, Boydell Press 2003).
31. Starkey, D.J. (1996): “Ownership Structures in the British shipping industry:
the case of Hull, 1820–1916”, International Journal of Maritime History, Vol. VIII,
No. 2, December, 71–95.
32. More on conferences in also Sturmey, S.G. (1962): op. cit. and Cafruny, A.W.
(1987): op. cit.
33. For the story of Royal Mail see Green, E. and Moss, M.S. (1962): A Business of National
Importance. The Royal Mail Shipping Group, 1902–1937 (London, Methuen).
30 Maritime Business During the Twentieth Century

34. See also Sturmey, S.G. (1962): op. cit., chapt. IVX; and Boyce, G. (1995):
Information, Mediation and Institutional Development. The Rise of large-scale Enterprise
in British Shipping, 1870–1919 (Manchester University Press).
35. See fn 29.
36. Harlaftis, G. and Theotokas, I. (2004): op. cit.
37. There has been remarkably little research on British tramp shipping in the last
25 years with an important exception of Gordon Boyce (1995). Information,
Mediation and Institutional Development. The Rise of Large-scale Enterprise in British
Shipping, 1870–1919 (Manchester University Press) and Forbes Munro, J. and
Slaven, T. (2001): “Networks and Markets in Clyde Shipping: The Donaldsons
and the Hogarths, 1870–1939”, Business History, Vol. 43, No. 2, April, 19–50.
But it has been the work of the ground-breaking maritime historian Robin Craig
that has revealed the main aspects of tramp shipping. See Craig, R. (1980): The
Ship. Steam Tramps and Cargo Liners, 1850–1950 (London, HMSO); (1973):
“Shipowning in the South-West in its National Context, 1800–1914” in Fisher,
H.E.S. and Minchinton, W.E. (eds.) Transport and Shipowning in the West country
(University of Exeter); “Capital formation in Shipping”, in Higgins, J.P.P. and
Pollard, S., Aspects of Capital Investment in Great Britain (1750–1850) (Methuen);
(1986): “Trade and Shipping in South Wales – The Radcliffe Company, 1882–
1921”, in Baber, C. and Williams, L.J. (eds.) Modern SouthWales: Essays in Economic
History (Cardiff, University of Wales Press), pp. 171–191. Craig, Robin (2003):
British Tramp Shipping, 1750–1914, Research in Maritime History No. 24, No. 3
(St John’s, International Maritime Economic History Association).
38. Lloyd’s Register of Shipping 1970.
39. For the expansion and re-invention of some of these companies see Jones, G.
(2000): Merchants to Multinationals. British Trading Companies in the Nineteenth and
Twentieth Centuries (Oxford, Oxford University Press).
40. Tenold S., “Norwegian Shipping in the Twentieth Century” in Fischer L.R. and
Lange E., International Merchant Shipping in the Nineteenth and Twentieth Centuries.
The Comparative Dimension, Research in Maritime History No. 37 (St John’s,
International Maritime Economic History Association), pp. 57–77.
41. Ojala, L. (1994): “A transaction cost analysis of Finnish, Swedish and Norwegian
shipping”, Maritime Policy and Management, Vol. 21, No. 4, 273–294.
42. Nordvik, H.W. (1985): “The Shipping Industries of the Scandinavian Countries,
1850–1914”, in Fischer, L.R. and Panting, G.E. (eds.) Change and Adaptation in
Maritime History, the North Atlantic Fleets in the Nineteenth Century (St John’s,
Newfoundland, Maritime History Group), pp. 117–148.
43. Wicken, O. (2007): “The Layers of National Innovation Systems: The Historical
Evolution of the National Innovation System in Norway”, TIK Working Paper of
Innovation Studies No. 20070601.
44. Johnsen, B.E. (2001): “Cooperation across the North Sea: the strategy behind the
purchase of second-hand British iron and steel sailing ships by Norwegian ship
owners, 1875–1925”, Paper presented in the International Conference “Maritime
History: Visions of shore and sea”, Freemantle, Australia, December.
45. Wicken, O. (2007): op. cit.
46. Tenold, S. (2000): The Shipping Crisis of the 1970s: Causes, Effects and Implications
for Norwegian Shipping (Bergen, Norwegian School of Economics and Business
Administration), p. 29.
 Endnotes 31

47. Tenold, S. (2005): “Crisis? What crisis? The expansion of Norwegian ship-
ping in the interwar period”, Discussion Paper 10/05 (Economic History Session,
Department of Economics, Norwegian School of Economics and Business
Administration).
48. For an analysis of the Norwegian shipping during the crisis of the 1970s see Tenold,
S. (2000): op. cit.
49. Drury, C. and Stokes, P. (1983): Ship Finance: The Credit Crisis – Can the Debt/
Equity Balance be Restored? (London, Lloyd’s of London Press), p. 37.
50. Ostensjo, P. (1992): A Competitive Norway: Chemical Shipping (Bergen, SNF, NHH).
51. Stokseth, B. (1992): A Competitive Norway: Open-Hatch Bulk Shipping (Bergen,
SNF, NHH).
52. Jenssen, J.I. (2003): “Innovation, Capabilities and Competitive Advantage in
Norwegian Shipping”, Maritime Policy and Management, Vol. 30, No. 2, 93–106.
53. Solberg, C.A. (2001): “Market information and the role of networks in inter-
national markets”, IMP 2001 (Norwegian School of Management BI).
54. Ojala, L. (1994): op. cit.
55. Bland, A.L. and Crowdy, M. (1961): Wilh.Wilhelmsen, 1861–1961. The Firm and the
Fleet (Kendal, World Ship Society).
56. Wil. Wilhelmsen ASA, Annual Report 2000.
57. Wil. Wilhelmsen ASA, Annual Report 2008.
58. For more on the Odfjell’s history, see Thowsen, A. and Tenold, S. (2006): Odfjell – The
History of a Shipping Company (Bergen, Odfjell ASA); Tenold S. (2006): “Steaming
ahead with stainless steel – Odfjell’s expansion in the chemical tanker market
1960–75”, International Journal of Maritime History, Vol. XVIII, No. 1, 179–198.
59. Tenold, S. (2008): “So nice in niches – Specialization strategies in Norwegian
Shipping, 1960–1977”, Fifth International Conference of Maritime History, University
of Greenwich.
60. Trygve, S. (2000): “Entry barriers and concentration in chemical shipping”, SNF
Report No 07/00 (Bergen, Foundation for Research in Economics and Business
Administration).
61. Odjfell (2008): Annual Report 2008 (Bergen).
62. Naess, E.D. (1977): Autobiography of a Shipping Man (Colchester) (1990): “61 Years
in the Shipping Business”, in Strandenes, S.P., Svendsen, A.S. and Wergeland, T.
(eds.) Shipping Strategies and Bulk Shipping in the 1990s (Institute for Shipping
Research, Center for International Business), p. 1.
63. Tenold, S. (2000): op. cit., p. 15.
64. Op. cit., pp. 231–2.
65. Tenold, S. (2001): “The harder they come … Hilmar Reksten from boom to bank-
ruptcy”, The Northern Mariner, Vol. XI, No. 3, 41–53.
66. Benito, G.R.G., Berger, E., de la Forest, M. and Shum, J. (2003): “A cluster analysis
of the maritime sector in Norway”, International Journal of Transport Management,
Vol. 1, No. 4, 203–215.
67. For an English-speaking bibliography on Greek shipping, see Metaxas, B. (1981):
op. cit.; (1985): op. cit.; Harlaftis, G. (1993): Greek Shipowners and Greece, 1945–75.
From Separate Development to Mutual Interdependence (London, Athlone Press);
(1996): op. cit.; Theotokas, I. (1998): “Organisational and Managerial Patterns
of Greek-Owned Shipping Enterprises and the Internationalization Process
from the Interwar Period to 1990”, in Starkey, D.J. and Harlaftis, G. (eds.)
32 Maritime Business During the Twentieth Century

Global Markets: The Internationalization of the Sea Transport Industries since 1850,
Research in Maritime History No. 14, IMEHA (St John’s, Newfoundland);
Serafetinides, M., Serafetinides, G., Lambrinides, M. and Demathas, Z. (1981):
“The development of Greek shipping capital and its implications for the political
economy of Greece”, Cambridge Journal of Economics, September; Carvounis, C.
(1979): op. cit.; Grammenos, C.T. and Choi, J.C. (1999): “The Greek shipping
industry: Regulatory change and evolving organizational forms”, International
Studies of Management and Organization, Vol. 29, No.1, 34–52; Theotokas, I.
(2007): “On Top of World Shipping: Greek Shipping Companies Organization
and Management” in Pallis, A.A. (ed.) Maritime Transport: The Greek Paradigm
(Elsevier); Research in Transportation Economics, Vol. 21, 63–93; Lagoudis, I.
and Theotokas, I. (2007): “The Competitive Advantage in the Greek Shipping
Industry” in Pallis, A.A (ed.) op. cit. pp. 95–120; Thanopoulou, H.A. (2007): “A
Fleet for the 21st Century: Modern Greek Shipping”, in Pallis, A.A. (ed.), op. cit.,
pp. 23–61; Theotokas, I. and Harlaftis, G. (2009): Leadership in World Shipping.
Greek Family Firms in International Business (Palgrave).
68. Gelina, Harlaftis, (2009): “The Greek Shipping Sector, c. 1850–2000” in Fischer
L.R. and Lange E., International Merchant Shipping in the Nineteenth and Twentieth
Centuries. The Comparative Dimension, Research in Maritime History No. 37
(St John’s, International Maritime Economic History Association), pp. 79–104.
69. Bibliography in English on Japanese maritime business is rather limited with the
exception of its two main shipping companies. Exceptions to this rule are: Yui,
T. (1985): “Introduction”, in Yui, T. and Nakagawa, K. (eds.) Business History of
Shipping, Proceedings of the Fuji Conference (University of Tokyo Press); Nagakawa,
K. (1985): “Japanese Shipping in the Nineteenth and Twentieth Centuries:
Strategies and Organization”, in Yui, T. and Nakagawa, K. (eds.) Business History
of Shipping, Proceedings of the Fuji Conference (University of Tokyo Press); Miwa,
R. (1985): “Maritime Policy in Japan: 1868–1937” in Yui, T. and Nakagawa, K.
(eds.) Business History of Shipping, Proceedings of the Fuji Conference (University of
Tokyo Press). Otherwise there is extensive bibliography on the leading compa-
nies. See Wray, W.D. (1984): Mitsubishi and the NYK, 1870–1914: Business Strategy
in the Japanese Shipping Industry (Cambridge, MA); (1985): “NYK and the
Commercial Diplomacy of the Far Eastern Freight Conference, 1896–1956” in
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 Endnotes 33

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72. Wray, W.D. (2005): op. cit.
73. Davies, P.N. and Katayama, K. (1999): op. cit.
74. Wray, W.D. (2005): op. cit.
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ENDNOTES

1. Operating costs comprise all the costs and expenses

incurred in the day-to-day

operation of the vessel at sea and in port. These costs are

associated with manning,

maintaining, supplying and insuring a vessel.

2. Metaxas and Doganis (1976), Metaxas (1985), Tolofari,

Button and Pitfi eld (1986),

Dorey (1988), Asteris (1993), and Policy Research

Corporation (1994) to cite

only some.

3. The above category of costs consists of: basic pay,

bonuses, leave overtime, pensions,

social security, subsistence, uniforms, and so on.

4. The reference is especially to Law 89/1967 on the

establishment of offi ces of ship

management and other shipping related activities in Greece.

Page Intentionally Left Blank
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