Shipping and Globalization in the Post-War Era

During the twentieth century, Western Europe lost its hegemony in international shipping and shipbuilding. This decline was a necessary condition for the international spread—the globalization—of shipping and shipbuilding after World War II. In the first post-war decades, the European hegemony was increasingly challenged. However, a combination of defensive national policies and technological limitations initially muted the decline, both within shipping and within shipbuilding. Today, however, we see that the developments of these two maritime sectors diverge. In shipping, the manner of organizing the business has been transformed, and the question of nationality has become very elusive. Still, behind a veil of stateless business, European capital and competence continued to play a crucial, albeit reduced, role. Within shipbuilding, Asian shipyards have managed to acquire a dominance that was similar in scale to the European leadership 100 years earlier.

Shipping highlights some of the adverse effects of globalization as can be seen in examples such as oil spills resulting from maritime accidents, seafarers reduced to ‘modern slaves’ and the risk of pandemics spread through seaborne trade and cruise trips. Against this background, this chapter aims to show that experiences from shipping can reveal some of the legal challenges presented by globalization. The development of the regulation of shipping reveals that globalized industries do not operate in a legal vacuum, but that they require a more subtle form of regulation than the traditional state-centred perspective implies. The chapter describes the regulation of shipping as ‘conglomeratic’ because it is characterized by the involvement of a wide and growing range of different actors in creating and enforcing shipping standards, and attributes its conglomeratic structure to the fact that maritime shipping fully developed its global nature in the post-war era. On the basis of these observations, the chapter argues that an analysis of the shipping industry can serve as a means of better understanding the role of law in processes of globalization.

Based largely upon the Ocean Group archive at the Merseyside Maritime Museum, this chapter addresses how the rapid decolonization of the European empires after the Second World War had far-reaching implications for international shipping. The ‘rules of the game’ increasingly shifted away from European domination through the rise of national shipping lines in the developing world, the intrusion of Soviet bloc shipping and new regulatory regimes and ideological challenges overseen by the United Nations. Moreover, the drive towards diversification (containerization notably) by European shipping companies (and the leading British ones particularly) was indirectly and subtly influenced by these global developments. Existing studies of the rise of the container (most famously by Levinson) have been western-centric in their explanatory framework. Yet, the cost-cutting imperative—in terms of labour, for example—was representative of a global phenomenon, and reflective of the social and political changes unleashed by decolonization (which following the work of A. G. Hopkins represented rather more than merely the lowering and raising of flags at independence ceremonies). Moreover, in Southeast Asia especially, newly independent governments promoted containerization as a means of diversifying and developing their economies. This was a characteristic also of ‘settler’ societies, notably Australia, New Zealand and South Africa, pointing to the importance of not overlooking the ex-Dominions in the end of empire story. The exemplar of these links between decolonization and containerization, focused upon in the chapter, was the formation of Overseas Containers Limited by a consortium of Britain’s leading shipowners.

This chapter is a historical case study of Maersk Line, the world’s leading container carrier. Maersk Line’s global leadership was achieved within a relatively short time period and was the result of Mærsk Mc-Kinney Møllers decision in 1973 to enter container shipping—the biggest investment in the history of the AP Moller companies. When Maersk Line managed to achieve global leadership in a period of just about 25 years, the company’s own country offices were particularly important. They allowed the interconnection of three types of networks: The physical network of ships and routes, the digital network of information and communication systems and the human network of Maersk employees. The interaction between the vessels, the systems and the people is still at the core of the company today and central to its continued development.

This chapter uses industry studies and archival material, as well as theories about knowledge transfer and strategic management, to analyse how the position of East Asiatic Company (EAC) changed from a leading liner shipping company—a first-mover—in the 1970s towards a shipping company which lagged behind in the highly competitive environment of the second half of the 1980s and early 1990s. EAC was a pioneer in the development of new container technologies in the 1970s. From 1972 EAC managed ScanDutch, soon the leading operator of container traffic between South East Asia and Europe. In 1977 the Chinese government requested EAC to facilitate the introduction of container technologies to China in close cooperation with the state-owned Chinese shipping company COSCO. China abandoned this project, however, and over the 1980s EAC also lost its position in international shipping and finally sold its liner shipping operations to Danish competitor Maersk Line. This chapter focuses on three factors which contributed to the decline of EAC: (1) The internal disputes of the 1980s within ScanDutch, EAC’s hitherto most profitable and successful shipping business operating liner shipping between South East Asia and Northern Europe (2) the fatal investment in a completely new type of vessel, the Liner Replacement Vessels (LRV), in 1975–1977; and (3) EAC’s view of itself as a political force rather than an ordinary business enterprise as symbolized by the extensive knowledge transfer concerning containerization from EAC to Chinese COSCO in 1978. Taken together, these three factors constitute a pattern which can help understand EAC’s maritime decline. Overall, EAC’s strategy and its company structures which were more in tune with the earlier, compartmentalized international economy of the mid-twentieth century than with the globalized structures evolving towards the century’s end.

This chapter approaches the question of how transformations in the world of shipping relate to wider trends in business and general history through the lens of knowledge. It will investigate how technological and managerial knowledge was created, developed and exploited as a corporate resource from the 1950s onwards in Ocean Transport and Trading, one of the UK’s leading liner shipping firms. The chapter will, first, briefly discuss the resource-based view of the firm and the importance of knowledge as a corporate resource. It will then examine Ocean’s use of technological and operational knowledge in the post-war era. The following section examines the introduction of modern management concepts at Ocean from the late 1960s and their impact on corporate strategy. In conclusion, the chapter will argue that the introduction of managerial concepts of knowledge contributed to Ocean’s gradual withdrawal from shipping and transformation into a provider of global logistics services and that analyzing shipping as a knowledge industry helps make sense of the transformation of the industry.

This chapter examines how Greek shipowners combined their entrepreneurial skills with American finance and European maritime expertise to become the world’s leading shipowners in the post-war period. Led by Aristotle Onassis, they were able to exploit opportunities in the United States in the 1940s and led the way in tanker shipping in post-WWII Europe. Greek shipowners created and consolidated the new institution of the global shipping company, paving the way for today’s ‘stateless’ maritime industry. The chapter analyzes the growth of the oil market and tanker shipbuilding by following the activities of one of the leaders of Greek and world tanker shipping, Aristotle Onassis, during the period 1948–1954. In the second part, we examine tanker shipbuilding by the Greeks, in particular by Aristotle Onassis and Stavros Niarchos, in German shipyards. Today, Greece is the leading country in terms of ownership of the world fleet, and this chapter shows how this became possible.

The niche business of overnight car ferry services has attracted only limited attention from maritime historians and maritime economists, who have tended to focus on the global segments of the shipping industry. Ferries have distinct regional characteristics, as they are tailor-made for specific services and competition between shipping companies is restricted to particular routes or regional markets. Nevertheless, the ferry business has also experienced geographical shifts in hegemony, which resemble those in global shipping segments. The chapter traces the employment of car ferries with overnight accommodation from the time when the first such vessels were introduced until the present day. Using individual ferries as the unit of analysis, the chapter discusses the factors which have shaped employment opportunities and business models. It adopts an industry life cycle perspective to explain how and why shifts in the employment opportunities for ferries have occurred.

The concluding chapter sets the findings of the individual chapters into the wider context of global history and the history of globalization. It argues that shipping as both an engine and an example of globalizing processes helps understand and illustrate the dynamics and periodization of globalization, in particular through its entanglements with the transformation of states and borders over the post-war period. This is examined first through an analysis of the context within which shipping developed, in particular the shift of the global economic balance towards Asia, decolonization, and changes in international governance. Second, the role of shipping companies in these processes is examined in a comparative perspective. Third, the obvious and less obvious connections resulting from shipping are discussed.