british and greek tramp-shipping firms

European Family Firms in International Business:

British and Greek Tramp-Shipping Firms

GELINA HARLAFTISIonian University

JOHN THEOTOKASUniversity of the Aegean

Then there is the tramp, the never-tiring tramp, which continually scoursthe Seven Seas in search of charters, loading from one port to another, andnever knowing where she may have to sail for next, picking up a cargo hereand running light there, figuring frequently in the overdue list, andsometimes turning up after she has been posted missing, but alwaysreturning to her home port, battered and weather-beaten, ready to sail againafter an overhaul in dry dock and the renewal of her certificate ofcharacter.1

The tramp steamer, the child of the sailing ship trader, was born in Britain, theproduct of the industrial revolution that brought an incredible increase in worldproduction and transport of bulk cargoes by sea. Since the last third of thenineteenth century in particular, world shipping has been dominated by a smallnumber of bulk commodities carried across all the worlds oceans and seas. Theneed for foodstuffs and raw materials to feed the populations and industries ofthe Western World, in conjunction with the massive introduction of steam,brought permanent structural changes in world shipping after the 1870s.

This is the division of the shipping market as it exists to the present day, thedivision between liner and tramp shipping. The type of cargo, the type of shipand the area in which it trades determine the market in which a ship operates.Thus, liner steamships tended to call at a large number of ports in a specificoceanic region, to carry general cargoes (mainly manufactured or packed goods)and passengers, whereas, during the same period, tramp steamers and sailingships tended to call at one particular port in various oceanic regions, to carry bulkcargoes.

At the same time, the transition from sail to steam not only increased theavailability of cargo space at sea but also caused a revolutionary decline infreight rates. Trade and shipping were organised by transnational commercialand maritime networks that contributed to the globalisation of the internationaleconomy. Britain led the way, for it is there that the tramp steamship and the liner

Business History, Vol.46, No.2 (April 2004), pp.219255ISSN 0007-6791 printDOI: 10.1080/0007679042000215115 2004 Taylor & Francis Ltd.

ship were born, and there that the organisation and the function of shippingcompanies were formulated and dictated. The most prominent European andalso world tramp-shipping operators since the last third of the nineteenthcentury have been the British, the Norwegians and the Greeks.2 Most of thehistory of Europes maritime transport during this period involved and involvestramp shipping. In fact, deep-sea tramp shipping what is called lately bulkshipping carried and still carries more than two-thirds of the worlds sea trade.3

Despite tramp shippings great importance in world maritime transport therehas been limited research on its operators.4 Liner-shipping companies havetraditionally formed the best known and the most glorious sector of Britishshipping; pioneering in all new technological developments and extending theiroperations to all oceans, they became the proud manifestation of the power of theBritish Empire that ruled the waves. British historians have narrated the storiesof the main British liner businesses, the mighty Empires lifeline with thecolonies. But throughout the nineteenth and twentieth centuries liner shippingformed less than half of the sizeable British fleet; consequently, more than halfof this fleet still remains largely under-researched. Part of the problem is that, incontrast to the luxurious four-stack liners that carried thousands of first-classpassengers and millions of deck-class immigrants to all parts of the globe, andhave caught the imagination of many a ship lover, there is nothing glamorousabout tramp ships. These were usually worn-out dry-cargo vessels with dirtybulk cargoes, such as coal, iron ore or phosphates, or slippery liquid-cargovessels, tankers, with crude oil, which ploughed the oceans. The marketfunctioned within a closed circuit of shippers and shipowners, who allowed littlelight to be shed on it. Tramp shipping, whether in Britain or Norway or Greece,has always been a very private business.5

Moreover, another obstacle the maritime historian has had to face is theomnipotence in the post-war period of maritime economists who established amethodology for analysing twentieth-century shipping, based on market forcesand competition in the international arena.6 Maritime economics does not focuson organisational and managerial factors that affect the efficiency of shippingcompanies, but rather on the overall competitiveness of national fleets. Thisapproach gives priority to factors such as technology, institutional arrangementsor resource availability and their contribution to cost formation; the industry istreated as a whole and does not take into consideration the differences andparticularities of the companies.7 Thus, maritime economists with only veryrecent exceptions have not taken the trouble to investigate maritime businessat a micro-level within a historical perspective.8 The tools of a historian and aneconomist will be used in this article to open up the black box of the activitiesof Europes most prominent tramp operators.

The purpose of this article is to put the tramp-shipping firm at the centre ofthe analysis and to attempt to provide an insight into its organisation, structureand entrepreneurial methods through a comparative perspective; to identifycontinuity and change that will enhance our understanding of the successful path

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of British and Greek tramp operators over similar and different periods of timeduring the last 130 years. A common approach has been to analyse these fleetsseparately, by their involvement in the tramp-shipping market, taking for grantedthe differences and never searching for the similarities. Until the 1960s, theBritish were still the worlds main tramp-steamer operators; but their story eversince has been one of steady decline, with the Greeks in the lead since the 1970s.This article neither analyses the tramp-shipping market which belongs to thefield of maritime economics nor presents the main reasons for the rise or thedecline of these two tramp operators. Its aim is threefold: firstly to describe thepatterns of evolution and development of the tramp-shipping firm, focusing onthe structural and managerial strategies that made it successful in an internationalenvironment; secondly to identify the different organisational and governanceforms that have been developed during this period; and thirdly to provide aninsight into the reasons for the survival of family capitalism in the Europeanmultinational tramp-shipping firms to the present day.

II

The tramp-shipping firm lies in the middle of three interactive networks: theregional, the national and the international. On this triple dimension, thenetworks of the tramp-shipping firm will be examined on two levels: firstly inrelation to the firms organisational form an alternative to market or hierarchy,as a means of conducting business and secondly in relation to the institutionsof world shipping. At both levels, and within the three dimensions, the shippingfirm has developed special relationships networks based on trust.

The worldwide shipping business has developed its own culture, based on thetrust and reputation of its members. Tramp shipping is a business that has reliedextensively on networks, personal relations within the company, whether it wasthe captain of the companys ship, or the agent representing it at a foreign port,or outside the company, personal relations with the institutions of shipping,such as the charter broker in the Baltic, or the insurance broker at Lloyds ofLondon. A network is defined as a specific type of relation linking a defined setof people: thus we have transaction relations, communication relations, kinshiprelations. Relations are the essence of network analysis.9 Mark Casson defines anetwork as a set of high-trust relationships, which either directly or indirectlylink together everyone in a social group.10 Networks mean the formation of aninstitutional framework that will minimise entrepreneurial risk and provideinformation flow. Networks allow us to understand how official marketmechanisms and trends can be bypassed, through the formation of transnationalconnections based on personal relations.

The services sector, such as transport or banking, has always beencharacterised by the interplay between risk and security. In the nineteenthcentury, the shipping sector established mechanisms to control what has beenvital in the business: information and trust. The institutions of shipping,

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intended to provide an unhindered flow of information, acquired their officialmodern form by the second third of the nineteenth century (Figure 1). What ashipping company does is sell space in the holds of its ships to those who wantto have cargoes transported from one port to another. A physical locus wasneeded to act as an international market where the shipowners could meet theshippers: this became the Baltic Exchange, formed initially as a limited club in1823 in the Baltic Coffee House in the City of London. The Baltic, as it iscommonly known, is still the place where the price of transporting a cargo, thefreight rate, is fixed. The deals are still closed by gentlemens agreement; thecharter-parties are signed days afterwards. The motto of the Baltic Exchange isMy Word Is My Bond.

For a ship to be chartered on the Baltic Exchange, it had to be insured.Lloyds of London, the worlds leading marine insurance market, emerged inits modern phase in the first third of the nineteenth century.11 The insurancebrokers kept files of shipping companies and their performance over previousdecades. In order to be insured, a ship needed to be classed, to acquire acertificate of seaworthiness from a classification society; the classificationsocieties retained specialised surveyors in all ports of the world, who inspectedships constantly for quality control and classified them accordingly. LloydsRegister of Shipping, the classification society, as distinct from Lloyds theInsurers, became an independent organisation in 1834. At about the same time,Bureau Veritas (the French classification society) was established, whereas theAustrian (Lloyd Austriaco) was formed in the 1860s, followed soon after bythe Norwegian one (Norske Veritas). The classification society monitored aship throughout its life, from its birth to its death, regardless of how frequentlyit changed ownership. In the pre-Second World War period the building of aship entailed investment by the shipbuilder and in the post-Second World Warperiod the collaboration of a banker. Thus, the product of shipping dependedon the assessment of a chain of shipping institutions that developedmechanisms to safeguard trust in business and to minimise risk. Throughoutthe nineteenth and twentieth centuries, this was an almost self-regulatedbusiness between principals and agents.

This self-regulated business, however, worked within a national andinternational environment. The shipping company was subject to the legalinstitutional framework of the country in which it was registered, and the flag itadopted on its ships. The issue of flags of convenience became very important inthe course of the twentieth century; despite the opposition of British shippinginterests in the 1950s and 1960s, their use became tacitly accepted in the lastthird of the twentieth century. Flagging out from traditional registers to flags ofconvenience became a major feature of post-World War II international shipping.Flags of convenience are countries which provide low taxes and lax conditionsof employment and operation.12 Although flagging out had been a commonpractice of European fleets in the eighteenth and nineteenth centuries, the firstmajor twentieth-century flag of convenience was Panamanian, which was

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initially used as a flag of convenience in 1922 to carry alcoholic beveragesduring American prohibition. Panamas subservient position to the US throughAmerican control of the Canal made it an ideal locale, since US owners had noreason to fear that a change of government would affect their interests. Duringthe Second World War, the Panamanian flag proved of great use; by switchingtonnage to the Panamanian flag, American ships maintained their neutrality afterthe US entered the war. In 1945 the US assisted in establishing another flag ofconvenience in Liberia. Since the US had considerable involvement in Liberianrubber and iron, its flag also remained under effective American control. Theadoption of cheap flags by various small developing countries directly dependenton either American or European interests became a characteristic feature of thesecond half of the twentieth century. There has been an ever-increasing numberof countries that have opened their registries; in addition to Panama, Liberia


FIGURE 1INSTITUTIONAL FRAMEWORK OF WORLD SHIPPING

Shipyards-Shiprepairs

ClassificationSocieties

InsuranceHull and Machinery

P&I Clubs

FinancialInstitutions

Baltic Exchange charterers brokers shipowners

SHIPPING COMPANIES

TRUST & REPUTATION

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ARIT

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INST

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: LAW

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and Honduras (the infamous PanHoLib flags), Costa Rica, Bermuda, the Isle ofMan, Cyprus, Vanuatu, Lebanon, Malta, Bangladesh, the Marshal Islands, SaintVincent, the Cayman Islands, Bahamas and Hong Kong, among others, haveestablished such registries. Greek shipowners became among the first Europeanshipowners to follow their adoption. The use of various flags meant the use ofinternational sources of human and financial capital that led to the formation ofinternational organisations for the regulation and control of shipping in the openseas.

Following world economic developments, the shipping market had taken itstwentieth-century form by the last third of the nineteenth century. Before the1870s, the shipping market was unified. By the last third of the nineteenthcentury, it began to adapt gradually to its distinction into two categories, linershipping and tramp shipping. Liner ships carried general cargoes (finished orsemi-finished manufactured goods) and tramp ships carried bulk cargoes (coal,ore, grain, fertilisers, etc.). For the next hundred years, until the 1970s, liner- andtramp-shipping markets continued on more or less the same lines. This centuryof shipping operations can be distinguished into two sub-periods.13

During the first period, from the 1870s to the 1940s, the cargoes carried byliner and tramp shipping were not always clearly defined: liners could carrytramp cargoes and vice versa. Although there was substitution between the twomarkets, the main structures of each one were diametrically different:oligopoly and protectionism for the liner market with the formation of theshipping cartels, the Conferences, from the 1880s, and almost perfectcompetition for tramp ships. The unprecedented increase in world productionand trade in the early post-war period brought more distinct changes in thestructure of the markets, which led to a gradual decrease of substitutionbetween them.14 In tramp/bulk shipping, the introduction on a massive scale ofnew liquid bulk cargoes, such as crude oil, and of the main dry bulk cargoesalready mentioned above (coal, ore, fertilisers and grain), led to specialisationof function: the creation of specialised bulk markets and the building of shipsto carry specific cargoes. The liner market continued along the same track ofoligopoly but witnessed increased competition in the protected markets fromdeveloping and socialist countries.

The development of tramp shipping did not involve innovative technologicaldevelopments, and no dramatic changes in the organisation and structure ofmarkets took place. Gradual adaptations to the needs were internalised, and thetramp ship was replaced by specialised vessels that were built for specific bulkcargoes and the specialised bulk shipping markets. The general pattern has notchanged over the last 130 years. However, since the 1970s we no longer talk oftramp shipping and tramp ships, but of bulk shipping, since the market is nolonger characterised by the type of ship but instead by the cargoes transported.Tramp shipping continued to be mainly in the hands of groups of familyenterprises that retained many characteristics of a multinational enterprise.15

These characteristics will be explored further in the sections that follow.

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III

In this section we shall identify the main characteristics of the structure and theentrepreneurial practices of British and Greek tramp-shipping companies, on theregional, national and international basis by treating ocean-going tramp-shipping firms as international businesses. It seems that the services sector hasretained much of the character of family capitalism in the organisation andstructure of the firms. Tramp-shipping companies, international by their nature,share many characteristics with international trading companies. As GeoffreyJones writes, in services, ownership advantages rest particularly in soft skills,embodied in people rather than in machinery or other physical products.Knowledge, information and human relationships often proved the ownershipadvantages of service sector firms.16 For the Greek case, it has provedimpossible to understand the evolution of Greek business on a global scalewithout analysing human relationships, without family/personal capitalism andnetwork analysis.17 Neither capital resources nor national cargoes were the basisfor the formation of competitive advantage of Greek shipping companies; it wasthe human resources, knowledge, their soft skills that allowed the formation ofwhat could be called technical operation know-how. For the British case,


FIGURE 2THE TRAMP-SHIPPING COMPANY

Gordon Boyce, the first historian to use the tools of business history andinstitutional economics in British maritime history, has demonstrated how vitalnetwork analysis is to understanding British maritime business and the extent towhich British shipping has relied on family/personal capitalism; although hisresearch takes into consideration tramp shipping companies, it focuses on linershipping companies, some of which started as tramp-shipping firms.18 It is highlyinteresting to see that for the Spanish case, Jesus Valdaliso, using the sametheoretical tools, has found out that building networks based on trust and loyaltylay at the centre of the growth of the largest Spanish firms from the mid-nineteenth century to the inter-war period.19 It seems that personal/familycapitalism, networks based on trust, formed a particular national maritimebusiness culture that has characterised international shipping activities whetherliner or tramp at least until the Second World War.

By tramp-shipping firm, we mean a firm that owns ocean-going steamshipsand/or motor vessels and operates them in international waters. Figure 2 gives aschematic approach to the organisation, administration and business methods ofthe tramp-shipping company as it developed from the 1870s to the 1970s. Twoaspects of the activities of the firm are analysed. The first aspect concerns thestructure and organisation of the shipping offices. The second aspect concernsthe administration and business methods that developed firstly to deal with theship and secondly with the firm in the international shipping market methodsthat developed to exploit and confront the fluctuations and the volatility of thefreight market.

The first characteristic of the organisation and structure of the tramp-shippingfirm is that it was first and foremost a family business run by a circle of familyand friends from the maritime region of origin of the shipowner. And if thistruism is well accepted for the Greek case, it might appear strange to many thatit is applicable to the British case too. Rowlinson and Leek state that althoughthe traditional liner companies had completed their transition to consortia andconglomerates by 1975, the main characteristic of the tramp shipowners wasfamily tradition and the provision of highly competitive, low cost operations.20

Many of the British tramp-ship operators since mid-1850s came from regionallybased tramp-steamship ventures. Indeed, British shipping has been a remarkablyprivate activity, an industry where family control survived the transition fromfamily partnerships to limited companies.21 A business that reproduced itself andkept within its boundaries meant that all tramp-shipowners had either beenpreviously involved in sailing shipping in traditional maritime regions of bothBritain and Greece, or had been employees on ships or clerks in shipping offices.As Robin Craig, the doyen of tramp-shipping history, has written, it is acommonplace that the two paths to shipping success in the nineteenth centurywere via the profession of seafaring or via the counting house.22

The history of the most enduring tramp-shipping companies of Britaincoincides with the history of their founders families (see Table 1). Sevengenerations of Turnbulls, from the beginning of the nineteenth century to the last

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third of the twentieth, established the fame of one of the most prominent Britishtramp-shipping dynasties. The Turnbulls also intermarried with other bigmerchant and shipping families from Whitby in north-east England and keptbusiness in the family for several generations.23 Three generations of theRunciman family kept the business in their control from its establishment in


TABLE 2BRITISH TRAMP AND LINER SHIPPING ACCORDING TO REGION

(ships above 500 tons)

1910Region Tramp Tramp % of Total Liner Liner % of Total

Number of nrt Tramp Number of nrt Liner nrtCompanies nrt Companies

London 117 1,318,606 28% 19 1,240,412 33%North-east ports 134 1,345,854 29% 6 287,740 8%North-west ports 61 671,842 14% 21 1,598,612 42%Wales 58 412,525 9% - -Scotland 84 864,507 18% 18 605,921 16%Other 8 46,055 2% 1 3,732,685 1%Total 462 4,659,389 100% 65 3,807,510 45%

1939Region Tramp Tramp % of Total Liner Liner % of Total

Number of grt Tramp Number of grt Liner grtCompanies grt Companies

London 83 2,626,733 54% 26 5,142,665 67%North-east ports 35 951,084 19% 1 8,512North-west ports 11 312,856 6% 9 2,082,031 27%Wales 32 417,144 8% - -Scotland 26 571,661 12% 5 366,669 5%Other 2 16,207 1% 17,593 1%Total 189 4,895,685 100% 43 7,617,470

Note: For the years 1914 and 1939 ships above 500 nrt.

Sources: Processed data from Lloyds Register of Shipping, 1910, 1939.

TABLE 1STRUCTURE OF BRITISH DEEP-SEA GOING FLEET

Year Liner % Total Tramp % Total Total Deep-Sea Fleet Fleet Going Fleet

1910 3,807,510 (nrt) 45% 4,659,389 (nrt) 55% 8,466,899 (nrt)1939 7,617,470 (grt) 61% 4,895,685 (grt) 39% 12,513,155 (grt)1960 8,764,000 (grt) 50% 8,761,000 (grt) 50% 17,525,000 (grt)

Note: For the years 1914 and 1939 ships above 500 nrt, for the years 1970 and 1998 ships above1000 grt.

Sources: Processed data from Lloyds Register of Shipping, 1910, 1939, British Chamber of Shipping,1960.

1855 to the last third of the twentieth century when, following the trend of thetraditional British owners, they outsourced the management of their fleet to theDenholm Management Company. Ropner, the long-lived shipping companyfrom the north-east, established by Robert Ropner in 1866, remained in the handsof the family for four generations.24 Four generations of Hogarths kept thebusiness within the family until 1968, when they merged with the Lyle ShippingCompany of Glasgow and formed the joint management company, the ScottishShip Management Company, while the third generation of Burrells became theleading Scottish tramp operators from the late nineteenth century to the FirstWorld War.25

The history of Greek tramp shipping is also inextricably linked with thehistory of families involved in shipping for several generations, andintermarriage within the shipping families of the Greek isles has been used as amethod of retaining and expanding the business.26 As with the British case, weshall cite some examples from the top ten operators of the twentieth century (seeTable 2). There is archival evidence that the Lykiardopoulos family has beeninvolved with the sea since the mid-eighteenth century, with ocean-going sailingships, and it is active to the present day; at least eight generations in the shippingbusiness. At least three to four generations of the Stathatos family have beenactive at sea, starting from the last third of the nineteenth century and continuingto the present day. The Goulandris family, starting from the last third ofeighteenth century, can count seven generations at sea, who have established oneof the most powerful shipping dynasties of Greece. The Embiricos, the mostimportant Greek shipping family of the first half of the twentieth century, startedits activities in the last third of the eighteenth century; seven generations on, inthe 1990s, it was yet again among the top ten. The Livanos family commencedits operations in shipping in the 1880s, and three generations brought it to the topfor most of the past century. The Chandris family began its shipping business inthe 1890s and the fourth generation is still going strong today. The Kulukundisfamily was involved in Mediterranean long-distance trade from the earlynineteenth century, and seven generations made it the most influential shippingfamily in the twentieth century; it is still involved in shipping.

An important characteristic of both British and Greek tramp-shipowners wasthe education of the sons of the family in the shipping business. A large numberof owners started out as ships masters, and trained their sons in the shippingbusiness at sea or in the office from an early age. Turnbulls of the secondgeneration, for example, were trained to take over and expand the business. Thefirst son, Thomas of Airy Hill, took over the shipyard and became the navalarchitect of the Whitehall Dockyard, and the second son, John, assumed the roleof the superintendent engineer of the fleet. Both Burrell brothers were wellgroomed for the business. George received technical training and William gainedfinancial and chartering expertise. Greek sons were frequently trained as mastersthroughout the twentieth century; today the term Captain is used almost as a titleof honour in the shipping circles of Piraeus, even for the young heirs. Apart from

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Masters, tramp-shipowners sons were also trained as engineers or navalarchitects, and, without exception, from adolescence travelled on the companysships during the summer months. Moreover, they grew up in an environmentwhere shipping was discussed daily. I never went through the variousdepartments, which probably has its advantages and disadvantages, but I wasalways next to my father when he was in London, so I knew practicallyeverything he was discussing or planning.27

The second important characteristic of the shipping firm is the regionalconcentration of such firms in particular areas or islands, and the continuation ofthe firms strong ties with the shipowners place of origin. The local and regionalfactor has played a seminal role in both British and Greek tramp shipping; itprovided human and financial resources based on trust.

Until the nineteenth century, the traditional regions of independent sailingshipowners in Britain were the north-east coast, followed by coastal sail shippingof the south-west ports and the West Country. The Industrial Revolution changedthe scene, and the main tramp-shipping areas of Britain in the nineteenth centurydeveloped alongside the deep-sea export coal trade, iron ore and grain: Thenorth-east and Wales became the main hubs of British tramp-operators, togetherwith the Clyde in Scotland.

The north-east and its associated ports, facing the North Sea and intersectedby the three famous industrial rivers, the Tyne, the Wear and the Humber, wasthe main coal-exporting area of Britain: Newcastle, Sunderland, Hartlepool,Middlesborough, Whitby, Scarborough and Hull. From the 1840s, almost everytechnological development in shipping took place in the north-east of England,and for the next hundred years, until the 1930s, the shipbuilding industry builtcolliers by the mile. This is the birthplace of the steam-collier (and the first bulk-carrying tankers), the mainstay of the British tramp-shipping industry.28 By 1910the shipping companies of the north-east ports handled almost one-third of theBritish tramp-shipping tonnage. Some of the most powerful British shippingfamilies that continued to the end of the twentieth century came from this region:the Turnbulls, the Ropners and the Runcimans.

The next most dynamic group in tramp shipping was the Scottish operators.The Clyde, which was for a century the most creative single industry region inthe country, was the second largest tramp-shipping region in Britain; in 1910, 18per cent of the British tramp fleet was registered there. Scottish merchantsexpanded their activities not only in trans-Atlantic trade, but also in IndianOcean trade. Glasgow, at the head of the fjord-like estuary, had also the greatadvantage of large deposits of coal and iron ore on its outskirts. From the mid-nineteenth century, the Clydeside engine works and shipyards were producingincreasing numbers of steamships. In 1920 there were 50 shipbuilding firms inthe Clyde area, an average of one fair-sized cargo vessel launched each day ofthe year, Sundays included, the best year on record being 1913, when 370 shipswere launched.29 Among the most renowned Scottish tramp-shipowning familieswere the Burrells and the Hogarths.


South Wales took about 80 years to surpass the coal exports of the north-east.At the beginning of the nineteenth century there is no record of any coalshipments from Cardiff. By the 1840s, exports had grown to more than 200,000tons and by the end of the century South Wales surpassed the centuries-old coaltrade of the north-east. Although at the turn of the twentieth century Cardiff wasdubbed the coal metropolis of the world, the other ports in the area were alsoinvolved: Newport, Swansea and Barry. It was not until the 1860s and 1870s,with the rapid growth in demand for steam coal, that shipowners based in Cardiffbegan to purchase steamships on an increasing scale. Wales drew human capitalfrom the West Country as well, and shipping companies established in Walesoperated nine per cent of the British tramp fleet in 1910. With Cardiff as thecentral port, tramp shipping thrived in the Welsh ports from Milford to Newport.Known Cardiff tramp operators were the Hain, Morell, Radcliffe, Tatem andCory families.

As is evident from Table 1, in addition to the three regions mentioned,London and Liverpool drew branch offices from almost all the above trampoperators and both cities handled 42 per cent of the British tramp fleet in 1910.In the same year, the top ten British tramp operators originated from all threemain British tramp maritime regions, with the north-east leading the way:Furness Withy, Ropner, Pyman and Runciman, from the north-east, Burrellfrom Glasgow and Hain from Cardiff. With the entry of the new tanker fleets ofthe oil companies, Anglo-American Oil and Anglo-Saxon Petroleum headed thelist of tanker owners, who were considered tramp operators, and remained inthis position in the years to come. By 1970, BP was the top tanker owner andwas not really a tramp owner but a company/industrial carrier that throughvertical integration maintains a shipping sector and Ropner was the onlyreminder of the tramp operators of the north-east, whereas DenholmManagement was an umbrella management company for some of the regionsmain tramp operators, including Turnbull and Runciman. Scottish ShipManagement, the successor of Hogarth and Lyle, was based in Glasgow,whereas Hain Company, once one of the main tramp owners of Cardiff, hadbeen part of the P&O group since the late 1930s.

There are controversial views as to the importance of home-port relationshipsand their contribution to British shipping. Robin Craig has taken this relationshipfor granted and has analysed tramp shipping in the various regions it developed,as an integral part of its function to the First World War.30 Equally, Gordon Boycehas stressed the importance of regional networks and home-port relationships forthe period 1870 to 1919.31 David Starkey has also found a strong home-portrelationship for the same period in the shipping firm he analysed: Wilsons areHull and Hull is Wilsons.32 Forbes Munro and Tony Slaven see a loss of thisconnection by the Second World War. Our evidence suggests that such homeport networks tended to survive as independent substructures to the shippinggroups national inter-corporate networks, but they eroded over time losingmembership and vitality.33 What is highly interesting is to see the arguments of

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Rawlinson and Leek, who until the 1970s found strong regional ties to Britishtramp-shipowners. They believed the contrary: that strong regional ties led to aninability or unwillingness of regional based tramp-shipowners to move toLondon, and this is considered one of the reasons for their decline in the periodafter 1975.34

Tramp shipping formed the largest part of the British mercantile marine fromthe 1870s to the 1970s; up until the Great War, 462 companies owned 55 per centof the fleet (Tables 3 and 4). The companies varied from small- to medium- andlarge-scale tramp-shipping firms. The inter-war years were a period of stagnationfor British tramp shipping, with the gradual contraction of the traditional tramp-


TABLE 3MAIN BRITISH TRAMP SHIPPING COMPANIES

Company Port Ship Grt Nrt

1910Furness Withy Hartlepool 95 178,837Usmar John Henry (Anglo-American Oil Co) London 40 108,253Ropner R. Hartlepool 49 93,330Hain Edward & Sons Cardiff 36 93,169Burrell & Son Glasgow 28 79,148Pyman Group of Companies London 40 75,352Anglo-Saxon Petroleum London 35 71,425Turnbull Group of Companies Whitby 29 65,150Runciman Walter Newcastle 29 64,436Watts Watts London 25 60,4291939British Tanker Co London 100 594,883Anglo-Saxon Petroleum London 64 375,727Ropner Group of Companies Hartlepool 46 243,067Eagle Oil 7 Shipping London 31 229,340Hain Steamship London 31 159,345Hogarth H. Glasgow 37 151,254Thompson Stanley London 18 100,604Bowring Group of Companies Liverpool 13 95,270Henderson P. Glasgow 14 90,514Common Brothers Ltd. Newcastle 18 89,071Runciman Group of Companies Newcastle 17 86,8641970BP Tanker Co. Ltd. London 116 2,438,798Trident Tankers Ltd. London 21 984,962Denholm (Management) Ltd Glasgow 38 801,161Common Brothers (Management) Ltd Newcastle 23 707,530Maritime Overseas Corp. London 24 436,009Blandford Shipping Co. Ltd. London 6 435,460Scottish Ship Management Glasgow 21 293,898Hain-Nourse London 16 230,327Souter W.A. Newcastle 9 171,260Ropner Sir R. and Co Durham 6 135,205

Notes: For the years 1914 and 1939 ships above 500 nrt, for the year 1970 ships above 1,000 grt* Joint-venture of British and Dutch interests.

Sources: Processed data from Lloyds Register of Shipping, 1910, 1939, 1970.

shipping regions and the concentration of interests in London. Tramp shippingdeclined to 39 per cent of the British fleet in 1939 and the powerful north-eastports lost a large part of the tonnage registered and operated from there, fallingfrom 29 per cent to 19 per cent. Scotlands share fell from 18 per cent in 1910 to12 per cent, whereas Wales remained at more or less the same level with eightper cent (Table 4). Following this trend in the post-war years, the three tramp-shipping regions the north-east ports, Scotland and Wales lost more of theirshare, and most British shipping was concentrated in London, with Glasgowforming another pole. Tramp shipping increased its percentage share of theBritish fleet, however, mainly due to the tanker owners, and comprised 50 percent of the total in the 1960s.

Greek shipping, which thrived in the multiethnic and multiculturalenvironment of the Eastern Mediterranean, was also concentrated in particularmaritime regions.35 Most of the Greek shipowning families during the nineteenthand twentieth centuries originated from the Aegean and Ionian islands: there areabout 1,500 islands in both seas, of which about 120 are inhabited. The deep-seasailing ship fleet of the nineteenth century came from about 40 of these.

Three main maritime regions are distinguished: the first one includes theislands and ports of the Ionian Sea, the second the islands of the Central Aegean,the so-called Cyclades, and the third the islands of the East Aegean (see Figure3), along the coast of modern Turkey. The Ionian Sea lies exactly where the Westtouches the East, on the boundary dividing the Western from the EasternMediterranean. The Ionian Islands have traditionally been the first ports of callfor ships heading from Western Europe to the Levant. On the way to the brideof the Sea, Venice, these islands never came under Ottoman rule and their Greekpopulations were the first to develop merchant fleets and flourish in the economyof the port-cities of the Italian peninsula. Families that are found in the top tenGreek shipowning families in the twentieth century have a long tradition at sea;the islands of Cephalonia and Ithaca have proved particularly productive inshipping. Of those listed in Table 2, for 1910, Lykiardopoulos and Yannoulatoscome from Cephalonia, Stathatos and Dracoulis from Ithaca.

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TABLE 4PLACES OF ORIGIN OF THE GREEK SHIPOWNING FAMILIES, 1914, 1939, 1975

1914 1939 1975

Place of Number grt % Number grt % Number grt %Origin of Families 000 of Families 000 of Families 000

Aegean 74 416 51% 113 1,309 73% 124 22,589 55%Islands

Ionian 26 205 25% 21 212 12% 17 1,357 3%Islands

Rest of 58 202 24% 98 276 15% 295 17,038 42%Greece

Total 158 823 100% 232 1,797 100% 436 40,984 100%

The Cyclades, an archipelago of 2,000 islands in the Central Aegean, ofwhich 33 are inhabited, were conquered by both Venetians and Ottomansbetween the thirteenth and the nineteenth century, and were mainly subordinatebut quite autonomous dominions. In a strategic location, their populations havebeen involved with the sea transport for millennia and in the nineteenth centurythe island of Syros became Greeces main maritime centre. Its neighbour, theadjacent island of Andros, was the birthplace of some of Greeces mostprominent shipowning families: the Embiricos and Goulandris.

The islands of the East Aegean, including those of the Northeast Aegean andthe Dodecanese, lie on the main northsouth axis of the Ottoman Empire, andalso boast a long tradition of shipping activity. Connecting Alexandria, Smyrnaand Constantinople, they were at the crossroads of Europe, Asia and Africa, andnever ceased to be ports of call for the ships of the Western powers. A largenumber of Greeces leading shipowning families came from Chios and Kasos;Lemos, Livanos and Chandris came from Chios, and Kulukundis from Kasos.

As Table 5 indicates, in 1910 76 per cent of Greek shipping families camefrom the Aegean and Ionian islands, a figure that increased to 85 per cent withthe entry of a large number of islanders into steam shipping in the inter-warperiod. Despite the appearance of new shipowners from the Greek mainland inthe second half of the twentieth century, islanders still formed almost two-thirdsof Greek shipowners in the 1970s.


FIGURE 3GEOGRAPHICAL DISTRIBUTION OF BRITISH AND GREEK MARITIME REGIONS

INVOLVED IN TRAMP SHIPPING

The shipowning groups of 1910 represented the structures of the nineteenthcentury, indicative of the importance of the shipowners from the Ionian Islandsin the transition from sail to steam. A large number of Ionian grain merchants,who also invested in ships, were established in the Black Sea in the last third ofthe nineteenth century, and formed the most powerful shipowning groups of theearly twentieth century: Stathatos, Svorono, Vagliano, Dracoulis andLykiardopoulos came from the islands of Cephalonia and Ithaca. For the next 50years, from the 1920s to the 1970s, the same shipowning groups belonging totraditional shipowning families from the Aegean and the Ionian islands featuredin the top ten: Kulukundis, Goulandris, Livanos, Lemos, Chandris, Nomikos,Embiricos and Lykiardopoulos. The only two newcomers in the business, in thelate 1930s, and known worldwide, were of course Aristotle Onassis and StavrosNiarchos. And even these two had to enter traditional circles: they both marriedthe daughters of Stavros Livanos, a powerful shipowner from the island of Chios.What is more, Onassis right hand in his shipping business was George Gratsos,a man from a traditional shipowning family from Ithaca; Gratsos was able to manthe Onassis ships with crews from his native isle. The Ithacans were consideredamong the best seamen, and thus the old tradition directly served the new anddynamic entrepreneurial spirit.

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TABLE 5THE LARGEST GREEK SHIPOWNING GROUPS

OF THE TWENTIETH CENTURY(in thousands)

Name Grt Name Grt Name Grt1910 1938 1975

Embiricos Group 44 Kulukundis Group 145.3 Goulandris P. Sons 2,578Michalinos 14.9 Goulandris Bros 74.5 Onassis A. 2,562Stathatos Bros 14.7 Livanos S.G. 57 Lemos C.M. 2,274

(Theofano)Svoronos Group 13 Nomikos Petros 39.9 Niarchos Stavros 1,786Vagliano A.S. 11.8 Chandris I.D. 37.7 Kolokotronis M. 1,581Panhellenic 11.1 Lykiardopoulos N.D. 36.3 Goulandris N. Sons 1,333Steamship CoScaramangas 7.6 Kassos Navigation 35.4 Livanos G.S. 1,219

(Rethymnis,Pneumaticos)

Sideridis Bros 7 Nikolaou 34.7 Coulouthros N. 817Dracoulis Bros 6.7 Yannoulatos Bros 31.7 Chandris Bros 791

(ELMES)Lykiardopoulos 6.6 Embirikos S.G. 27.6 Kulukundis Bros 712A. Total of Top Ten 137.4 520.1 15,653B. Total Greek-owned fleet 375.8 1.889 45,392A/B 36% 28% 34.5%

Source: Gelina Harlaftis, A History of Greek-owned Shipping, from the 1830s to the Present Day(London, 1996), Appendix.

At this point we would like to discuss the importance of the regional/nationalnetworks for the international activities of the tramp-shipping business. For theGreek case it is important to stress that all Greek top tramp operators had lefttheir islands of origin by the beginning of the twentieth century and had movedto the national (Syros and then Piraeus) maritime centres or to the internationalones (London or New York). In this way one can say that the real home-portrelationship had broken down for a large part of Greek tramp operators by theinter-war period. However, it is highly interesting to note that the regionalnetwork had transcended the boundaries of the island and of the nation, and itwas the imagined island or home-port relationship that gave a sense ofbelonging and served well the cause of the tramp-shipping business in all partsof the globe. The Cephalonian or the Chiot whether in London, New York orShangai trusted his co-islanders first and foremost; it is among them that hesearched for business partners, agents, employees or seamen. Shipowners fromdifferent islands of the Aegean and the Ionian seas shared a certain shippingbusiness culture that became the core of the international networks of the Greeksin the nineteenth and twentieth century.

For the British case, more than the north-east and Wales, it is the Scots whooffer similar examples of this kind of network and formation of business culture,which extended to areas beyond Scotland. The supremacy of Scottish merchantsand shipowners in the Far Eastern trades of the British Empire is well known anddocumented. In fact, the initiative of the expansion of British textile trade to theEast came from families of northern and mainly Scottish origin. As StanleyChapman has written, the expansion of Britains Far Eastern trade was largelythe work of family and clan groups among whom the Scotts were particularlyprominent The Scots, like other ethnic and religious groups in trade,commonly supported each other.36 When the monopoly of the East IndiaCompany was abolished in 1815, it was Scottish merchants that embarked on theIndian and Chinese trades. The existence of a dense nexus of Scottishentrepreneurs in these trades formed the canvas on which Scottish trampshipping thrived.

So networking, in this article, is not limited to the formation of allianceswith other companies or organisations on a local or national basis within GreatBritain. Limiting their analysis to this concept of networking, Munro and Slavenhave concluded that networking as a form of business organisation held greaterappeal for those engaged principally in liner operations than for those engagedprincipally in tramp ship operations.37 They use the example of the Hogarths and they have extended their conclusion to all tramp shipping who developedanti-networking methods. But that was exactly the opposite of what happened.Munro and Slaven support their arguments by the fact that Hogarths did not useBritish brokers but bypassed them, avoiding commissions, chartering theirvessels directly to the Indian Ocean and Southeast Asia, where they mostlyoperated, keeping cash to pay for their newbuilds avoiding the Scottish banks and carrying a large part of their own hull insurance. And it seems that the


Burrells did exactly the same before them. In the case of both top Scottishoperators, it was exactly their connections with this wider Scottish commercialand shipping network in the Indian Ocean that gave them access to every port,agent, investor, labour and, ultimately, the strength to internalise manyoperations and survive international competition. Networks in shipping shouldalways be regarded in their triple dimension, the local/regional, the national andthe international (or the imperial for the British case); the core of these networkswas trust, and its cohesiveness the business culture.

The third characteristic of the tramp-shipping firm revolves around thepatterns of ownership and finance. Not only human capital but also financialcapital was drawn from the shipowners region of origin. Capital formation fromjoint ownership characterised sailing-ship ownership, and so it continued in thesteamship era. This pattern had long been common in many countries; the joint-ownership practices of the Greeks, British, Norwegians, French or Spanish canbe readily compared.38 Similarly, co-ownerships with strong local port/cities andisland or kinship ties and family networks were common to all nineteenth-century sailing-shipowners of maritime nations, and certainly of the British andthe Greeks. But it was in Britain that the formation of the modern tramp-shippingcompany took place and was adopted fully by all principal shipping players.

There were two main patterns of ownership in the nineteenth century. Thefirst one was the old method of co-ownerships, the so-called sixty-fourthers inBritain. The second method, which developed in the era of steamships, was thesingle-ship company, a joint-stock limited liability company for which fundswere raised by purchasing shares in registered joint-stock enterprises. In the oldmethod of the 64th system, the sixty-fourthers were shareholders of shipswhich they held with unlimited liability; this system served well in the age of thesailing ship. Under the 64th system of ownership, a shareholder received adividend when profits were made, according to the voyage accounts kept by theships manager. Ownership under the 64th system involved sharing the riskunder common ownership: liability was absolute, and participants were liable forthe debts of the enterprise as well as sharing its profits. In order to limitcommercial risk, the 64th principle provided finance for the purchase of a shipby a closed circle of friends and relatives from a particular town or region. Withthe advent of steamers, the cost of one share became very high and a widersource of finance was found necessary. This was made possible by forming theinstitution of the single-ship company.

Single-ship companies came after the Repeal of the Bubble Act in 1825 andas a consequence of the 1844 Joint Stock Companies Act and the 1862 LimitedLiability Act, and finally formed the main structure of British shipowningcompanies from the 1870s. In the late 1870s the single-ship companies of limitedliability generated a real boom in the market in the main tramp-shipping regionsof Britain.39 Hundreds of low-cost shares of 1 were sold to the local populationof Wales, the north-east and the Scottish ports, by managing agents on behalf ofshipowners.40 Despite these developments, the new kind of shipping company

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also ended up involving close personal relationships and the confidence of theparticipants. In fact, far from being a leap forward to the reorganisation of theindustry to incorporations, single-ship companies actually accommodated andformalised the old method of co-ownership. The new development was really areformed but similar company to the old structure of the 64th system, whichcontinued to exist and to be used in combination with the single-ship companieswell into the twentieth century. Usually the shares of these limited liabilitycompanies were partly for public sale, the majority being held by the managersand sold at their discretion. There was no board of directors in these companiesand it was the managers, also part-owners of ships, who took all the decisions.41

It seems that in both the British and Greek cases, until the Second World War,capital continued to be drawn from a specific geographical area and from arelatively small pool of investors, mainly shipowners and merchants from alimited circle of family and friends.42 It was not until the inter-war period thatserious financial help was sought from the banks, which only really got involvedextensively in shipping, lending to finance fleet expansion, in the second half ofthe twentieth century.

Those that invested in merchant vessels operated in the stable and close-knitcommunities of British ports or of the Greek islands, ideal arenas for theemergence of networks, where trust and reputation of participants played a majorrole. There is ample evidence that the townspeople of Whitby and the populaceof the north-east in general, along with friends, relatives and family members,formed the largest number of the investors for the Turnbull fleet under the 64thsystem.43 The same applied to the Runcimans; by using the 64th system ofownership and relying on the regional financial network that was keen to investin shipping, Walter Runciman rapidly built up a fleet of a dozen steamers in the1880s.44 Equally, the Burrell familys enterprises were based on a limited numberof investors, and despite the transition to the limited liability companies for eachship in the early twentieth century, the sources of capital did not expand butremained the same.45 As in the Greek case, there was always some kind of tiebetween investor and ships manager, such as business colleague, kinship orfriendship. A high percentage of the Burrell investors were merchants, and thevast majority from the Glasgow area.46 Edward Hain, based in Cardiff, expandedhis business based on the 64th system, purchasing steamers and drawinginvestors from Cornwall, from whence he came.47 Radcliffe of Cardiff did anexcellent job of drawing capital from a wide spectrum of the Welsh population.The Radcliffe Share Register of 19056 reveals an extraordinary range ofwomen investors: spinsters, wives, dress makers, ladies, Misses,Mrses, schoolmistresses appear as owners of 100 shares (64thers) inRadcliffe steamships.48 In fact, the Radcliffes seem to have used ingenious waysof attracting investors: in the early 1900s, the Reverend J. Cynddylan Jones, aprominent Calvinistic Methodist Minister, promoted the sale of shares ofRadcliffe steamers from the pulpit, offering salvation to those who participated.49

Using the 64th system of ownership and management, Ropner was also able to


rely upon a network of investors mainly from the textile towns of northernEngland; he enjoyed the backing of Yorkshire and Lancashire manufacturers.50

Up until 1903, all the Ropner vessels were managed by R. Ropner & Company,on the 64th system of ownership. His limited liability company, on the newsystem of consolidated fleets of single-ship companies, started in that year withthe Pool Shipping Co. Ltd, which was managed by R. Ropner & Company. Thiswas a path followed by most firms.

In the Greek case, the Books of Ship Registries of the Port Authorities ofPiraeus, Syros, Andros and Ithaca reveal the system of co-ownership, whichreally formed the basis of the Greeks expansion. In the age of sail, the numberof shares in a Greek ship was not set by law but was usually between two and24; in the age of steam the number was set conventionally at 100. Each sharecould be sold independently by its owner without the consent of othershareholders, in this way providing great flexibility. Joint-ownership constituteda particular type of enterprise; indeed, according to the Modern Greek PrivateLegal Code, it is not a company but a method of combined ship operation. It isconsidered a sui generis type of company that is not subject to rights orobligations itself (although the owners are) and the manager represents the jointshipowners and not the joint shipownership. Following the French legal code,Greek commercial law provided limited liability for the shipowner(s) from thedeeds of the manager/master. The shipowner(s) was discharged of any furtherliability by surrendering the ship and the freights to creditors, and even theliability of the co-owner/master was limited to the value of his participation inthe ship.51 Traditionally, the partners were related, or at least came from the sameisland; the maritime region of origin of the shipowner constituted a permanentsource of finance. Thus, Lykiardopoulos and Stathatos relied on their relativesand compatriots from Cephalonia and Ithaca, Goulandris and Embiricos on theirAndriot network, Livanos and Chandris on their Chiot network and Kulukundison their relatives and compatriots from Kasos. All these leading shippingfamilies that opened offices in London in the late nineteenth century followed thepath started by the British in the formation of single-ship companies and theconsolidation of their fleets.

So, the structure of the modern tramp-shipping company, as it has emergedsince the last third of the nineteenth century, consists of one shipping firm thatappears as managing agent of joint-stock single-ship companies of variousnationalities, even though all companies might be owned by one shipowner andall are operated as a single (consolidated) fleet.52 This structure, introduced by theBritish in the last third of the nineteenth century, formed the basis for theexpansion of tramp-shipping operators throughout the twentieth century on aworldwide basis. It safeguarded the shipowner so that problems arising from oneship did not affect the other ship(s). In this way, in the 1950s, for example, thepurchase of a new ship by a Greek shipping management firm meant the creationof a new Liberian, Panamanian or Honduran company, which was to be operatedby an agent in London of a company based in Piraeus.

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The fourth characteristic of tramp-shipowners was their connections with thenational economic and political establishment. Shipowners in both the UnitedKingdom and Greece were among the largest capitalists in both countries andwere in a position to formulate the policies that concerned their industry. Theywere on the boards of directors of insurance companies, P&I Clubs, Registers ofShipping, shipyards, Chambers of Shipping, the Department or Ministry ofShipping. In Greece, shipowners were able to influence the drafting of themaritime legal institutional framework, or to contribute financially to maritimeeducation. Since London became, and still is, the worlds main maritime centre,British shipowners have been able traditionally to influence the maritimebusiness policy of the institutions of shipping on a global scale, throughout theperiod under consideration. Moreover, shipowners were appointed toGovernment Advisory Shipping Committees and Committees of the Board ofTrade.

The leading British shipowners were frequently knighted for their services totheir country and have been closely connected with the political establishment,often elected as MPs in their regions of origin. In the north-east, Sir WalterRunciman devoted much of his energy to politics and administration, Sir StephenFurness was a parliamentary candidate for the Liberal Party in Hartlepool, whileRobert Ropner, Mayor of Stockton in 189293, also served as MP for that town,to mention just a few examples of tramp-shipping operators active in public life.By the same token, in Wales, William James Tatem, the owner of the tramp-shipping company Tatem Steam Navigation, based in Cardiff, became The BaronGlanely of St. Fagans just after the First World War; Edward Hain, who was ofCornish origin, the owner of the Cardiff-based Hain Steamship & Co., waselected Mayor of St. Ives several times, became an MP for Cornwall at the turnof the century, and received a knighthood, becoming Sir Edward Hain. At theoutbreak of the Second World War, March Turnbull was appointed director of theShip Management Division at the Ministry of Shipping and in 1941 was knightedfor his services. And, of course, the Scottish tramp-shipowner par excellence,William Burrell, was knighted too, and is remembered in Glasgow today forbequeathing the famous Burrell Collection to the city. The above examples aremerely indicative of the wealth and prestige of the shipowners involved in trampshipping, with further connections in the economic and political establishment ofthe country.

In the same way in Greece, in the first half of the twentieth century,shipowners were fully involved in the economic and political life of the state.The case of the Embiricos family provides an example. In 1894, EpaminondasEmbiricos founded the Bank of Athens, which provided finance for the transitionfrom sail to steam. Moreover, he served as a parliamentary deputy for a numberof years, became Minister of Shipping (19089) and was largely responsible forthe Shipping Law that legalised mortgages in 1910. Members of the Embiricosfamily continued to play an active part in the political life of the country duringthe First World War and the inter-war period, making a number of investments


in the Greek economy along the way. The sons of Epaminondas Embiricosestablished the Stringos-Embiricos Bank in Piraeus in the inter-war period, saton the board of the National Bank of Greece, and were elected as MPs. The sonsof Andreas George Embiricos, Leonidas, Michael and Maris, established theinsurance companies Ethniki Zoi and Kali Pisti during the inter-war period, aswell as the Bank of National Economy in 1918. They were also the mainshareholders in the very important shipbuilding/repair yard in Piraeus, theVassiliades Engine Works. Leonidas Embiricos, who was a consultant on thesupply and distribution of food in the temporary Thessaloniki government andMinister of Food Supplies in the Venizelos government in 191718, undertookto provide privately the supplies needed by the Greek army.53 In the second halfof the twentieth century too, Greek shipowners have had very close relationswith the economic development and the political establishment of the country,and continue to be among the largest and most powerful entrepreneurs ofGreece.54 The word shipowner in the Modern Greek language, has come to besynonymous with rich.

The fifth characteristic of the tramp-shipping firm has been that theshipowners enhanced their regionally based but internationally locatedbusinesses with a large network of agents in the ports in which they traded; theyalways kept a central office with agencies in important port-cities. For the Britishtramp operators, establishing representatives/agencies across the globe was quiteeasy. Tramp shipping developed hand-in-hand with the routes of the BritishEmpire and particularly with coal trade. British coal was the best for steamships,and the nexus of coaling stations around the world provided fuel for thousandsof steamships and agencies for hundreds of British tramp-shipping companies.From New York to Buenos Aires, around to Valparaiso, from Sidney to Shanghaiand Calcutta, to Cape Town and Rio de Janeiro, there would be a British coalingstation and a British agent for a British ship. Although the British Empire nolonger existed in the second half of the twentieth century, British maritimesupremacy continued through the established worldwide networks of Britishshipping companies, even at the time of motor ships.

The Greek maritime network down to the First World War was mainlyconcentrated within European waters. During the inter-war period it expanded intothe Atlantic, Indian and Pacific ocean routes. For the first time, Greek shippingoffices appeared outside Europe and the Mediterranean: in Buenos Aires and inShanghai. The massive entry into tanker shipping brought Greeks to the top, withthe consequent establishment of a worldwide network of agencies. After theSecond World War, there were Greek-owned offices in almost all the main ports ofEurope, North and South America, Southeast Asia and South Africa. In the firsttwo post-war decades, London and New York were home to the largest number ofoffices, followed by Piraeus. From the 1960s onwards, however, the number ofoffices in Piraeus rose spectacularly to over 600 in 1975 and more than 800 in1990. Piraeus was always home to the greatest number of shipping firms becausethe port concentrated all the small firms and single-ship companies.

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The administration of tramp-shipping firms and the maintenance of theirinternational competitiveness were founded on a series of commonentrepreneurial methods that were developed by British and Greek shipowners,and which, together with the organisation of their shipping firms, formed theirmaritime business strategy. In both countries, tramp operators grew inconnection with one major bulk cargo: for the British this was coal from thenorth-east, Wales and Scotland, and for the Greeks grain from the Black Sea.Both controlled and had direct access to producers and consumers, at both ends,and became specialised in these markets.

When the firms developed to such an extent that expansion beyond their ownmaritime region was necessary, they then opened branch offices in other port-cities, at home and abroad. All the important tramp-shipping firms, at one pointor another, opened offices in the worlds main maritime market: London. Forexample, the Turnbulls, who were established in Whitby, found it necessarybecause of the expansion of their business beyond the north-east, in order tosecure cargoes for all the companys vessels. The London office was opened in1872 and the Cardiff office in 1877. The head office of the Runcimans movedfrom South Shields to Newcastle in 1895 and the company, which wasexclusively involved in tramp shipping, owned 25 steamers. The magnitude ofthe business could not but take them to the capital, and it was at about this timethat a London office was opened, run by another member of Runcimans closefamily. In 1886, Robert Ropner took into partnership his eldest son, John HenryRopner, and in 1887 opened a branch office in London. Burrell & Son did notmove out of Scotland, but relied on a worldwide network of Scottish agents; thefirm would not have had to search far to find a Scot to act as its agent in everyimportant Indian or Asian port. The Hogarths, however, established a Londonoffice in 1919, especially for chartering, whilst also relying on the Scottishcommercial and maritime business networks in the Indian Ocean.55 The Greekslikewise found it necessary to open shipping offices in London. As noted, mostof them were dealing with the grain trade from the Black Sea before making theleap forward to worlds maritime centre. The Embiricos established offices inBraila on the Danube in the 1880s, before opening their London office in 1896.The Goulandris, relatives of the Embiricos, were involved in the Danube graintrade before transferring their activities from Andros to Piraeus and thenexpanding to London in 1925. Livanos established a London office during theFirst World War. Lykiardopoulos was also involved in the grain trade from theDanube, and at the turn of the century moved offices from Cephalonia to Piraeusand then, in 1910, opened in London. Access to the national and internationalmaritime centres was essential for the survival of the firm.

Both British and Greek shipowners, at either end of Europe, traded along thesame classic sea-routes: grain was transported westwards and coal eastwards.Other cargoes, such as ores, fertilisers, timber, sugar were also involved, but thebread and butter of the tramp-shipping industry, particularly from the 1870s tothe eve of the Second World War, was coal and grain. The closure of the


Dardanelles during the Balkan Wars and then the First World War meant that thesupply routes were diverted to the northsouth lane in the Atlantic, whichbrought grain from Argentina to Northern Europe and coal to the South Atlanticand the Mediterranean. And in the post-war period, crude oil became the mostimportant single cargo for tramp owners, with grain, coal, ore and fertilisersremaining the staple cargoes for tramp shipping firms, not only in European orAtlantic waters, but now in all the oceans of the world.

Both Greeks and British used the same kind of steamships. The British had,of course, the great advantage of being the main builders of tramp steamers, upuntil the Second World War, and of developing them according to the needs ofthe trade. The Greeks bought secondhand cargo steamers from the British, whowere building advanced designs. But the tramp steamer did not show anyspectacular advances in technological innovation; the goal was to build medium-size vessels, of medium speed, with low maintenance costs and capable ofoperating in the transport of dirty cargoes for years. The trend in tramp-steamerdesign and operation had been towards standardisation, and the shipowners thatpioneered this, such as the Burrells, enjoyed great profits. Standardisation inshipbuilding, as in the rest of the transport industry, was partially introduced afterthe First World War, with the standards, and reached its peak in the massiveLiberty shipbuilding programme that took place during the Second World Waryears in the Americas, reproducing a standard British design cargo vessel inthousands. The impressive increase in world trade in bulk cargoes in the post-warperiod, however, led gradually to the disappearance of the tramp steamer and itsreplacement by the specialised bulk cargo ships from the 1960s onwards.

The manning of offices and ships was always associated with the shipownersplace of origin, in both the Greek and British cases. The employees in the officesof the Turnbulls and the crews of the Turnbull fleet, whether it was managed fromWhitby, Cardiff or London, were drawn from Whitby and from the Robin HoodBay area up to the 1960s. Livanos and Chandris offices and ships were mannedby employees and seamen from Chios, as were Kulukundis from Kasos orGoulandris from Andros. In such an international business, however, internationallabour was employed at an early stage. Multiethnic crews were used initially asratings, since British officers were preferred by all British shipowners. The BritishCommonwealth, however, provided abundant cheap labour, Indians and Chinese,and particularly to those tramp owners, such as the Scottish ones, who traded notonly in European waters but also in the Indian and Pacific oceans. The Asia-Pacific region was where the Burrell fleet carried out its greatest activity in the1890s and 1900s, and it is therefore not fortuitous that over half of its crews wereChinese, guaranteeing lower crew costs.56 Asian seamen under Scottish officerswere on board the Hogarth Group vessels; by 1910 35 per cent of Hogarth vesselswere manned by Indian (Lascar) crews and a further 17 per cent by Chineseseamen.57 The Greeks used exclusively Greek crews up until the 1960s, sincewhen they have been increasingly using foreigners, although Greek officers arestill preferred on board Greek-owned ships.

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The other main factor in the successful business strategy of the tramp-shippingoperators has been a systematic method of sales and purchases. The Burrells areamong the first and best known for introducing this method on such a massivescale. In 1897, Burrell & Sons owned an impressive fleet of 28 steamships, a fleetwhich, in a strategic move, they sold almost entirely in 1899 and 1900, whenfreight rates and ships prices had shot up as a result of the high demand caused bythe Boer War. The firm re-entered the market between 1905 and 1910, a slumpperiod for world shipping, and purchased 32 steamships which it eventuallyresold when ship prices rose again during the First World War. The strategic salesand purchases scheme of Burrell & Sons, ingeniously following the tramp freightcycles at the right time, constitutes an extreme example of an entrepreneurialmethod, a golden rule of buying cheap and selling at high prices which has beenfollowed by the Greeks from the Burrell age to the present day. What is more,the Burrells placed multiple orders in the shipyards for ships with the samespecifications, thus cutting down costs; a prelude to the massive standardisationof shipbuilding that was to follow the outbreak of the two world wars.58

The Kulukundis, who in 1921 founded the largest London Greek office,R&K, became known for similar methods in the inter-war period. Between 1922and 1925, R&K purchased at least 40 secondhand ships, and also advised itsGreek clients on buying steamships in the British secondhand market at theextremely low prices pertaining in the early 1930s. R&Ks major success was itsnumerous purchases, between 1932 and 1934, of First World War standard ships.If R&K considered it a success to purchase a ship for 17,000 in 1922, ten yearslater it purchased ships of a similar age for 4,5007,500. In the end, R&Kbought at least 12 ships in the early 1930s from the Kylsant-controlled ElderDempster, Union-Castle and Pacific Steam Navigation companies which itresold at high prices later in the decade.59

Diversification of investments has been the other vital business method todiminish the risk of shipping enterprises and confront the volatility of thefreight markets. Wealthy shipowners have diversified by investing in varioussectors of the national and international economy. Greek merchants andshipowners, for example, dispersed in numerous port-cities from Odessa toLondon, have traditionally invested in various sectors of the economy of theircountries of domicile, mainly in banking and industry. The Rodocanachi, forexample, Greek merchants and shipowners established in Odessa, had investedin industry, banks and real estate in the late nineteenth century,60 while themembers of the Rodocanachi family in London were among the founders anddirectors of the Imperial Bank.61 Many of the Greek shipowners established inAthens/Piraeus in the first half of the twentieth century invested in banking,industry and real estate. This flow of capital in both directions stemmingfrom the international shipping business of the Greeks continued in the secondhalf of the twentieth century.

A detailed assessment of the Greek shipowners investments in the Greekeconomy from 1945 to 1975, which gives us an idea of the importance of the


flow of shipping capital, has been made.62 During this period, Greekshipowners controlled the second largest group of commercial banks inGreece, accounting for 3035 per cent of the total bank deposits in theeconomy. They owned or participated in industrial firms accounting for 1929per cent of the total fixed assets of manufacturing. They made or participatedin investments forming 17 per cent of the total investments in hotelconstruction. They controlled 2332 per cent of the insurance market. Theywere owners of a significant proportion of real estate and participatedextensively in construction activities throughout the country.63 Despite thediversification of their assets in non-shipping investments, Greek shipownerstended to concentrate their major activities in shipping. By possessing floatingassets owned by non-Greek companies, they could transfer funds from theirGreek companies to their non-Greek ones.64 As a result of their worldwideactivities, Greek-owned shipping companies are sometimes referred to asmultinationals. The multinationalism and the strategy of diversification in theGreek shipping business is clearly illustrated by the wealth of AristotleOnassis, as revealed after his death in 1974. Onassis had invested $1.5 billionin European, Latin American, US and Asian companies, excluding his depositsin 217 banks around the world.65

No equivalent assessment of British shipowning capital has been made, butthere is ample evidence that British tramp-shipowners invested in industry,banking, insurance and international business. Many British shipowners wereinvolved with shipyards (the Turnbulls and the Ropners), other industrialsectors, in banking, in coal mining and export services and other types ofservices. A late example, of the post-war activities of the Hogarths, gives afurther insight. In 1972 the Hogarth Shipping Company formed SeaforthMaritime Ltd in Aberdeen, an organisation engaged chiefly in supplying andservicing oil rigs, initially in the North Sea, but subsequently over a muchwider area of the world. It also acquired a major interest in one of Aberdeensoldest engineering companies, which in the mid-1970s was becomingincreasingly involved in diving systems for use in the North Sea. In 1972 theHogarth Shipping Company, along with the Lyle Shipping Company, acquiredJohn Kilgour & Company Ltd, an old established shipbroking firm in London,which had become a subsidiary of Scottish Management Ltd and wasresponsible for a major part of the chartering of both Hogarth and Lylecompany ships. In 1973 the Hogarths also expanded into the real estatebusiness, with Hogarth Shipping Estates Ltd, investing in commercial propertyin various areas where office accommodation was anticipated. In the sameyear, the Hogarth group of companies also acquired an old-establishedGlasgow firm of travel and ship agents.66 It is thus evident that diversificationin national and international business has been a common practice of theshipping entrepreneurs. The flow of capital investment from and to shipping along with the continuation of interests in the shipping business is an issuethat begs further research for the British case.

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IV

In endeavouring to present a typology of the tramp-shipping company, we candistinguish two periods, pre-World War II and post-World War II. In the first halfof the twentieth century, the tramp-shipping operators fell into two categories:the cross-traders, like the Greeks, and the national traders, like the British. Inboth cases, capital, flag and labour came from their national state (Figure 4). Thenational character of the companies predominated, although both categoriesparticipated in the international tramp markets. In the second half of thetwentieth century, tramp shipping was transformed in response to the need toadapt to the changes dictated by international trade. The internationalisationprocess of shipping companies was completed by drawing resources from the


FIGURE 4GOVERNANCE STRUCTURES OF TRAMP-SHIPPING COMPANIES BEFORE THE 1940s

Come mainlyfrom their

national states

NationaltradeFlag

Labour

Capital

Crosstraders

Shipping companies of national character

Nationaltrade

Crosstraders

On externaltrade needs

Networking based

Onculture

Free standing companiesof national character

INTERNATIONAL TRAMP/BULK SHIPPING MARKETS


INTER

NATIO

NAL TR

AMP/BULK SHIPPING

MARKETS

INTE

RN

ATIO

NAL

TRAM

P/B

ULK

SHIP

PING

MAR

KETS

international market: capital, flags and labour were obtained from theinternational market on a competitive basis. Gunnar Sletmo states that flaggingout gave a new sense to the concept of international shipping as it demonstratedthat shipping could take on a transnational character and seek out productionfactors in countries other than those of traditional maritime nations.67

Tramp-shipping companies in both Britain and Greece fall into the categoryof what have been described in the literature as free-standing firms. Firms thatwere registered in Britain, for example, to conduct business overseas, much ofwhich, unlike the American model, did not grow out of the domestic operationsof existing enterprises that had headquarters in Britain.68 Firms whose presencein their home economies was usually no more than a small head office, firms thatspecialised in a single commodity or service in specific regions. The shippingfirm is very different from the manufacturing firm. In fact, in the Englishlanguage, the term shipping industry is very commonly used, maybe becausethe British not only ran the ships but also used to build them. In Greek, however,we never use the term shipping industry, we talk only about shippingservices, because this is what shipping actually is: services. The product ofshipping is change of location; shipping does not transform the essence of aproducts nature, as manufacturing does, it adds value by moving it from locationA to location B.

Tramp-shipping companies in the second half of the twentieth centuryabandoned their prime national character and became free-standing companiesof international character (Figure 5). The main motive of these companies wasto search for factors that would enhance their competitiveness, exploiting allthe advantages that internationalisation offered regarding resources andinstitutional environment. They were thus able to adapt to transformations onthe demand side, expanding their services worldwide. This, however, increasedthe complexity of their task, led to an increase of transactions and of the costand risk these transactions created. Shipping companies were obliged toconfront this increase, which could eliminate their competitiveness. Forexample, instead of employing seafarers coming from the island ofshipowners origin or from the port where the company was established, in thepost-World War II period they employed seafarers from low cost countries,with whom neither personal relationship nor any other type of connectionexisted. As Figure 5 indicates, to retain their competitiveness, tramp-shippingcompanies followed three distinct approaches. The first was to preserve theirtramp structure and the co-operative relationships with companies of similarstatus and culture. The second approach was the internal development of thecompanies and the internalisation of as many transactions as possible. Finally,the third approach was to concentrate on activities in which the companieswere competitive and to outsource the others.

The first approach concerns the traditional tramp structure, co-operationand networking.69 This is the model of the traditional tramp-shipping familycompany bearing all the characteristics of the pre-World War II period:

BUSINESS HISTORY246

common business culture and the formation of networks in order to reduce riskin transactions. Its success lies in a closely knit entrepreneurial network on aworldwide basis that sustains its national or even local/regional character.Even in the era of globalisation, the tramp structure provided the alternativechoice for the elimination of the risk which is the result of the variousstructural characteristics of tramp shipping, mainly the principle of trust, thecore of networks.

Networks can be seen as governance structure for co-ordinating economicdecisions. A network is a rather flat organisational form in contrast to thevertically organised hierarchical forms. It consists of more or less equal memberswho have informal relationships with one another. The basis of theserelationships is trust. Networks exist within organisations as well as betweenorganisations.70 The essence of networking, which is based on specific businessculture, is that it allows members to react in the same way and produces amentality of emulating the most successful companies, with further effects onorganisational and managerial methods. The business culture creates a ratherunified front of all institutions in the case of tramp shipping, and is able tohandle a crisis at the right moment through a common reaction. The strength ofa culture and its response to its environment lies in its successful long-runcorporate performance.71 Consequently, entrepreneurial networks which haveproved successful are those whose cohesiveness lies in business cultures thathave survived economically in the international arena for centuries; and this isthe case of both British and Greek tramp shipping.

Various aspects of the organisation and management of tramp-shipping firmscan only be explained by analysing the structure and the main characteristics ofthe tramp-shipping market and the business culture they create. Thesecharacteristics are mainly related to the structure of the market and the co-operative and entrepreneurial nature of tramp shipping. An importantcharacteristic of the tramp-shipping firm concerns its size. During the twentiethcentury, size has not played an important role in the competitiveness of thetramp/bulk-shipping company. The limited importance of the scale advantagedid not force shipping companies to increase their size in order to increase theirefficiency. Thus, they did not have to follow the managerial and corporate paththat Alfred Chandler has indicated so lucidly. In shipping, liner or bulk shipping,the ability to benefit from economies of scale and rationalisation werepreconditions for efficiency. The most important elements in tramp shippingwere the connections and the reputation of each shipowner or company. Thecarrying capacity could be increased easily and immediately throughacquisitions from the secondhand market, and once a company had establishedits network it could easily expand. Obviously size is a factor that can add tocompetitiveness, through economies of scale. In industries where significanteconomies of scale are possible, small firms operate at a level below theminimum efficient size and therefore have higher than average production cost.However, small firms can benefit from their entrepreneurial and innovative


character or from the willingness of their owners to accept relatively lowfinancial returns.72 The small bulk-shipping companies belong to this category.Even a single-ship company can compete directly with any other company thatoperates the same type and size of ship. Traditionally, bulk shipping consists ofcompanies of various sizes that range from large companies of more than 50large ships to single-ship companies that directly compete with each other. Forexample, in 1970, the Greek-owned shipping company of Stavros Niarchoscoexisted and competed with the British Turnbulls, who operated five ships, andwith the various Piraeus-based single-ship companies which operated ships ofsimilar characteristics.

In an internationalised industry such as tramp shipping, only reliance onreputation and trust could preserve co-operation. Shipping is a business inwhich the owner cannot control his asset that sails thousands of miles awayfrom his office. The owner depends on the master of the ship, on his agents atports, with whom he almost never signs a contract. For a company operating 30ships dispersed in different ports of the world, this means that it has to handletransactions with hundreds of professionals located in different parts of theglobe. The production of shipping services is the combined result of manystages of production, each of which includes various transactions. Shippingcompanies directly or indirectly control a certain percentage of thesetransactions, which can be considered as part of their value chain. They includetransactions with ships agents, manning agents, P&I clubs, hull and machineryinsurers etc. However, shipping companies also transact with ports, pilots, flagstates, classification societies and other agencies that intervene in theproduction of shipping services, without being able to determine or define theterms under which the transactions take place. The cost of these transactionswould be enormous if the company had to rely solely on formal negotiationsand contracts. Consequently, competitiveness depends strongly on the ability toreduce the cost and the risk of these transactions as much as possible. Theproper strategy to attain this goal for companies that either do not have theresources to pursue their internal development or do not want to lose the controlof their ships operation is to co-operate with other companies with similarcharacteristics, and to enlarge their value chain by forming networks.Networking and co-operation are usually based on common culture, since thisallows arms-length contracts and minimises the risk in transactions. The factorthat allows this type of contract is trust.

The most important aspect of business culture based on trust is that it reducesthe cost of transaction. In high-trust culture, complex interdependencies betweenfirms can be sustained by arms-length contracts and within each firm the ownercan rely on the loyalty and integrity of the employees.73 Furthermore, shipping isan information-intensive operation. Information regarding freight rates, freightdemand, market forecasting, supply of human resources, port conditions, portstate control requirements, etc., is vital for the minimisation of risk intransactions. Obtaining the requested information at the proper time and at

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optimum cost can vastly increase the competitiveness of a shipping company.However, the cost of acquiring information continues to be high. Shippingcompanies that are able to obtain superior information are able to reduce theiroperating cost by reducing risk in transactions and at the same time toincrease the reliability of their services.74 Networking of various companiesincreases the sources of information; drawing on the best services andknowledge one can get, rather than relying on in-house applications, isconsidered a point on which every shipping company must focus in deciding itsstrategy.75 It is interesting to note that the value of these principles has never


FIGURE 5GOVERNANCE STRUCTURES OF TRAMP-SHIPPING COMPANIES AFTER THE 1940s

Lowering through

Free standing companiesof national character

New division of labourinternationalisation process

Come mainly from theinternational markets

Increase of transaction cost

Cooperationnetworking

based on culture

Outsourcing

Managerialenterprise

Ship managementcompanies

Internaldevelopment

Familyenterprise

Trampstructure

Free standing companies of international character

BRITISH

GRE

EKS


INTERNATIONAL TRAMP/BULK SHIPPING

british and greek tramp-shipping firms

Documents

world shipping

deepsea tramp shipping

shipping market

tramp steamship

tramp steamers

tiring tramp

involvestramp shipping

linershipping companies