The Ocean Steamship Co.
(Alfred Holt Group)
(Est. 1865)


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The history of the Alfred Holt ‘s Ocean Shipping Group begins in 1865, when two brothers, Alfred and Philip Holt of Liverpool, set up the Ocean Steamship Company. This would later evolve into the Ocean Transport & Trading Ltd (in 1973), then in 1990 it would be renamed as Ocean Group plc. One of its subsidiaries was the famous shipping company, Blue Funnel Line.

Its purpose was to provide a regular steamship cargo service from England to China, at first via the Cape of Good Hope. At that time the steamship was not considered an economical long distance cargo carrier, but the Holt brothers planned to use a new type of steamer that they were convinced could compete effectively with sail on this route.

This was an ambitious project requiring a large investment. It involved building three ships, each of 2,280 tons, iron-hulled, and powered by a new type of compound steam engine designed by Alfred Holt, who was an engineer. He and his brother were the sons of a wealthy Liverpool cotton broker, and they had already proven the potential of this type of ship in West Indian trade. By selling the five ships they had owned in that trade they were able to put up almost half the capital needed for the new enterprise. The rest of the money came from other members of the family and their business friends in Liverpool. The company was founded before the days of limited liability, so all the shareholders were taking a considerable risk. The two Holt brothers, then aged 37 and 36, took on the management of the ships.

Their gamble paid off. The ships performed well and the cargoes followed: in the early days the chief goods transported were cotton textiles, which went from England to China, and tea, which went from China back to England. The Holts' ships became well known for their classical names (Agamemnon, Ajax, and Achilles were the first three) and their trademark blue funnels. Although the company was officially called the Ocean Steamship Co. it was much more often referred to as "Holts" or the "Blue Funnel Line."

Selecting Key Agents

The commercial success of the line was due partly to the Holts' high standing in the Liverpool business world and partly to their shrewd choice of agents. In some cases their agents were also shareholders in the company and therefore had a double incentive to bring business to the line. A prime example was the firm of John Swire & Sons. The Swire brothers, who built up this eastern trading business, were also from Liverpool and were contemporaries and friends of the Holt brothers. They invested in each other's businesses, and when the Swires set up shop in Shanghai (as Butterfield & Swire) it was partly to act as agents for the Holts. This partnership was so successful that Swires later became agents for Holts in other Far Eastern ports as well as in London.

Another fruitful agency appointment, and one which owed nothing to the Liverpool connection, was that of Mansfields in Singapore. The enterprise of this firm in developing trade with neighboring territories made Singapore a rich source of business for the line.

Only three years after the Holts started their China service, Far Eastern trade was transformed by the opening of the Suez Canal. By dramatically shortening the route to China, this greatly stimulated business. On the downside, however, it also attracted new competitors. In the next 20 years, the Blue Funnel Line grew to 30 ships, all financed out of profits. The main route from Liverpool to Shanghai was extended to Nagasaki as trade with Japan grew, and the volume of traffic all along the route was increased by feeder services. The Swires operated services along the Yangtze River and around the coast of China, while the Holts and Mansfields started feeder services centering on Singapore. Another profitable sideline was the carrying of passengers, particularly Chinese emigrants and Moslem pilgrims en route to and from Mecca in Saudi Arabia.

Fleet Expansion, Takeovers, and Joint Enterprises: 1890s-Early 1900s

Despite all this expansion, Ocean's profits began to decline in the 1880s. Competition from other steamship owners was driving freight rates down and the Blue Funnel ships were being overtaken in carrying capacity and speed by more modern ships. It became necessary to replace virtually the whole fleet if the company was to survive.

A decisive move was made in 1892, when four new ships were ordered and ten old ones transferred to feeder services. In the course of the 1890s, 23 new ships were added to the fleet and its total tonnage almost tripled. Ocean had to dig deep into its reserves and borrow from its bankers to make this investment, but it laid the foundations for another surge of growth in the next two decades.

Takeovers and joint enterprises played an important role in this second phase of growth. In 1902, Ocean became a limited company and bought one of its main competitors on the Liverpool-Far East route, the China Mutual Steam Navigation Company Ltd. This added another 13 modern ships to the Blue Funnel fleet. A few years earlier, Ocean had become the majority shareholder in an Amsterdam-based company Nederlandsche Stoomvart Maatschappij Oceaan (NSMO), which came to control the bulk of the tobacco trade from the Dutch East Indies to Europe. Other purchases and joint ventures enabled Ocean to extend its routes to Australia and, after the opening of the Panama Canal, to New York.

However, it was internally generated growth that made these investments possible. World trade was growing fast, and the Holts and their agents were very active in developing new types of business. Tin and rubber from the Malay states, tobacco from the East Indies, and refrigerated fruit and meat from Australia all became important inward cargoes, while machinery and manufactured goods of all kinds filled the outward-bound ships.

Two World Wars and the Great Depression

By 1913, the Blue Funnel fleet numbered 77 ships, and its total tonnage had nearly tripled again from its 1901 level. The years immediately before World War I brought record profits to Ocean, and the war pushed them still higher. Some of the company's ships were commandeered by the government at good rates, and freight rates also rose. The Far East trade was not affected much by the war, and Ocean was fortunate to lose relatively few of its ships before the fighting ended in 1918.

In retrospect, the end of the war and the short postwar boom proved to be the high watermark of the company's expansion. From then on, the Ocean Steamship Co., along with other British shipowners, had to struggle to maintain business. In most of the interwar years, world trade was below its 1913 level and later suffered a severe decline during the first four years of the Great Depression, from 1929 to 1933. At the same time, Britain's share of the traffic was being eroded as other countries built up their merchant fleets. Existing shipping lines were able to protect themselves to some extent by the conference system, a form of cartel, but were under constant pressure from nonconference companies. In these circumstances, Ocean Steamship Co. did well to keep the bulk of its business and to continue paying dividends throughout the period.

The depression brought about the collapse of one British shipping combine, the Royal Mail Group, and Ocean Steamship Co. was in a strong enough position to be able to acquire parts of that business at bargain prices. It bought the Glen Line in 1935, gaining ten ships serving the Far East from London, as opposed to Liverpool. The year after, it acquired a large holding in the Elder Dempster Line, which was strong in the West African trade.

Then came World War II, which had a devastating effect on Ocean Steamship Co.'s business. The Japanese occupation of China and much of Southeast Asia completely destroyed the Europe-Far East trade from 1941 to 1945. Half the Blue Funnel fleet was sunk by enemy action, and its Liverpool headquarters was destroyed by bombs.

When the war ended, the company--still headed by a member of the Holt family--courageously set about rebuilding the business. Its urgent need for more ships was met by buying some secondhand and by having others built abroad. Rebuilding the company's trading connections, however, was not so easy. Trade with China never recovered after the civil war and Communist takeover, but trade with Australia was buoyant and that with other territories was gradually restored.

Birth of Singapore Airlines and Malaysia Airlines:

In 1946, it developed an interest in aviation. In partnership with the Straits Steamship Company and Imperial Airways, Alfred Holt's Ocean Steamship Company incorporated Malayan Airways Limited on the 12th October 1947. The airline's first flight was a chartered flight from the British Straits Settlement of Singapore to Kuala Lumpur on the 2nd April 1947.  Regular weekly scheduled flights quickly followed from Singapore to Kuala Lumpur, Ipoh and Penang soon commenced. The airline continued to expand during the rest of the 1940s and 1950s, as other British Commonwealth airlines (such as BOAC and Qantas Empire Airways) provided technical assistance, as well as assistance in joining IATA.

When Malaya, Singapore, Sabah and Sarawak gained their independence and formed the Federation of Malaysia in 1963, the airline's name was changed, from "Malayan Airways" to "Malaysian Airlines" (though still abbreviated to MAS). MAS also took over Borneo Airways. In 1966, following Singapore's separation from the federation, the airline's name was changed again, to Malaysia - Singapore Airlines (MSA).

MSA ceased operations in 1972, when political disagreements between Singapore and Malaysia resulted in the formation of two entities: Singapore Airlines and Malaysian Airlines System.

Singapore Airlines retained all the international routes out of Singapore and the existing corporate headquarters in Singapore. Female flight attendants continued to wear the famous "sarong kebaya" uniform, which had been first introduced in 1968. These eventually became an icon for the airline in marketing campaigns and became known as the "Singapore Girls".

Singapore Airlines has grown from a regional airline into one of the world's leading carriers. They have a young, efficient fleet, an educated staff attuned to quality, and a top-ranked travel gateway, Singapore's Changi Airport, at the centre of their extensive route network. Their history, their country, and their customers all contribute to their success and their future.

From a single plane to an internationally respected brand, more than 60 years of innovation and service has propelled the growth of Singapore Airlines to become one of the world's leading carriers with an advanced fleet. They began with three flights per week, and today their route network spans 103 destinations in 41 countries. Years ago, Singapore Airlines was the first to offer free drinks and complimentary headsets. More recently, they have pioneered inflight telecommunications services and unparalleled inflight luxury. In 2007, Singapore Airlines celebrated its 60th Anniversary and they are the first to put the world’s largest plane (the Airbus A380) into service.

Singapore Airlines has evolved into one of the most respected travel brands around the world. They have one of the world's youngest fleet in the air, a network spanning five continents, and the Singapore Girl as their renowned symbol of quality customer care and service. Customers, investors, partners, and staff — everyone expects excellence of the airline. And so, in their lounges, their conferences, working relationships, and in the smallest details of flight, they rise to each occasion and deliver the Singapore Airlines experience.

Meanwhile Malaysian Airline System, on the other hand, took all domestic routes within Malaysia and international routes out of the country. It began flights on the 1st October 1972. Soon after that, Malaysian Airline System rapidly expanded its services, including introducing long-haul flights from Kuala Lumpur to London. In the same year, MAS operated flights to more than 34 regional destinations and six international services. In 1976, MAS scheduled flights reached Europe. An economic boom in Malaysia during the 1980s helped spur growth at Malaysia Airlines. By the end of the decade, MAS was flying to 47 overseas destinations, including eight European destinations, seven Oceania destinations, and the USA. In 1993, Malaysia Airlines reached South America. When Malaysia Airlines introduced its service from Kuala Lumpur to South America, MAS became the first and only airline in South East Asia to serve South America. Services were eventually extended to Central America in the 1980s, however this route was terminated in the 1990s. However in the 1990s and early 21st century the airline experience financial difficulties. Today, Malaysia Airlines flies nearly 50,000 passengers daily to some 100 destinations worldwide.

Investing in Containerisation:

By the late 1950s, the Blue Funnel fleet again numbered almost 70 ships still pursuing traditional liner trade. Ocean Steamship Co. was not at this stage interested in oil tankers or bulk carriers, and the day of the container had not yet arrived. As a company, Ocean Steamship Co. was perhaps a shade too conservative at this time. It was still a family business, owned and managed mainly by descendants of the founders. All the directors sat in one room at the Liverpool head office, just as their predecessors had for almost a hundred years. Their standards in ship safety and efficiency were high, and the company was universally respected. In 1965, Investors Chronicle, a financial paper, characterized Ocean Steamship Co. as "one of the largest British shipping companies, with a sound, steady profits record."

By then, however, it was clear that things had to change. The success of containerization in the United States was forcing the company to contemplate radical business strategies, and to facilitate these it was decided that its shares should be traded on the stock exchange. (It was already a public company, but an unquoted one.) This change went into effect in March 1965.

Later the same year, two other far-reaching decisions were made. The first was to start investing in containerization. This meant merging Ocean Steamship Co.'s main business into a larger grouping to finance the massive investment required. The other decision, linked to the first, was to start diversifying into other branches of the shipping business to provide new opportunities for Ocean Steamship Co.'s own organization.

The group was spurred into action by reports that the Australian government was keen to containerize and was negotiating with SeaLand, an American company. Neither Ocean Steamship Co. nor its competitors in the Europe-Australia trade could risk losing this business, so four of the British companies, including Peninsular & Oriental Steam Navigation Company (P&O), Furness Withy Group, British & Commonwealth Group and Ocean Steamship Co., jointly set up Overseas Containers Ltd. (OCL) to provide a container service on this route.

Overseas Containers Ltd (OCL) was the largest British container consortium and was formed in 1966 by British and Commonwealth Shipping Group, Furness Withy Group, Ocean Transport and Trading Ltd (Alfred Holt Group) and the P&O Group. The aim of the consortium was to develop and operate container services on those trade routes in which its partners operated, with the intention of preserving a major British interest in these trades. The United Kingdom/Australia trade was the first to be containerised in 1969 and this was followed by the Far East trade. These will soon be followed by the containerisation of the New Zealand trade and the United Kingdom/Europe/South African trade as well as three trades in the Pacific basin.  In 1986 all the partners were bought out by P&O Group and the operation was renamed P&O Containers Ltd. In 1996 this was merged with Nedlloyd Line and formed P&O Nedlloyd. This was later transformed into a stand alone company as Royal P&O Nedlloyd and finally in 2005 was bought entirely by the A.P. Moller-Maersk Group and merged with Maersk Sealand to form Maersk Line.

OCL began operations in 1969. Within a few years its Australian service was showing a profit, and it had joined a still larger international consortium to containerize the Europe-Far East route. In 1975, after the reopening of the Suez Canal, Ocean Steamship Co. and Ben Line formed a partnership called Ben Ocean to operate conventional liner sailings on the Europe to Far East route. At this point in the early 1970s, Ocean Steamship Co.'s stake in OCL grew to 49 percent, and its Blue Funnel fleet became largely superfluous and that company was discontinued.

In anticipation of this, Ocean Steamship Co. had been investing in other shipping businesses since 1965. That year it took over a company called Liner Holdings. This included the Elder Dempster Line, in which Ocean Steamship Co. had held shares since 1936, and other subsidiaries. Over the next few years, Ocean Steamship Co. also acquired interests in tankers, bulk carriers, and cargo handling services, laying the foundations of much of the company's business through the 1980s. For example, MSAS Cargo International began in 1968 as McGregor Swire Air Services, a joint venture between Ocean Steamship Co. and its longtime partner, Swire Group. Panocean Storage & Transport was set up a year later in cooperation with P&O.

Continued Acquisition and Expansion

Another important move--because it put Ocean Steamship Co. into land transport for the first time--was the purchase of William Cory & Son Ltd. in 1972. Cory was a long-established company that had first made its name carrying coal by sea from northeast England to London. From this it moved into the transport of fuel oil by sea and land and later again into food distribution. Cory also had offshoots in towage and waste disposal. The acquisition of this business increased Ocean Steamship Co.'s assets by over 40 percent.

It cannot be said that all Ocean Steamship Co.'s diversifications in the 1960s and 1970s were successful. There were a few expensive failures, and there were bad times when the company was itself threatened with takeover. Nevertheless, enough of the new ventures succeeded to provide a strong basis for future growth.

The company's remaining shipowning interests, apart from OCL and Elder Dempster, were sold off in the late 1970s and early 1980s. In 1983 its majority share holding in the Straits Steamship Company (58%) was sold to the Keppel Corporation. In 1986 a decision was made to withdraw from OCL and Ocean Steamship Co.'s then 33 percent holding in OCL was sold to P&O to form P&O Containers, and, in a partial exchange, Ocean Steamship Co. acquired P&O's holding in Panocean. Two years later in 1988 Blue Funnel ceased to exist with the sale of its last ship. P&O Containers then in 1996 became P&O Nedlloyd. This then became Royal P&O Nedlloyd in 2004 and then was sold to the A.P. Moller-Maersk Group in 2005 to become Maersk Line. Elder Dempster was sold in 1989 to Delmas and Ocean Steamship Co. withdrew from deep sea shipping.

After the sale of the OCL holding, Ocean Steamship Co. was in possession of a large amount of cash in 1986, and this attracted an unwelcome takeover bid from New Zealand entrepreneur Ron Brierley. The company successfully resisted this and focused on investing all its resources in building up its core businesses: sea freight, air freight, logistics, marine services, and waste management. In particular, it invested in overseas companies, with the result that its business was very widely spread around the world by the late 1980s.

The company's name changed twice in the latter half of the twentieth century to reflect its changing activities. In 1973, after the Cory takeover, it became Ocean Transport & Trading Ltd., and in 1990 it adopted the Ocean Group name. The last director with a family connection retired in 1976, and the company's head office moved from Liverpool to London in 1980, and then to Berkshire in 1992. Nicholas Barber, who joined Ocean Steamship Co.  in 1964, took over as chief executive in 1987.

By the early 1990s, Ocean Group's main business was international freight management. Its largest subsidiary, MSAS Cargo International, was one of the world's leading freight forwarders and was among the top five companies in air freight forwarding, with over 220 offices in 30 countries.

Ocean Group's other businesses also centered on transport. Its distribution services sector included McGregor Cory, which undertook contract distribution and warehousing in half a dozen European countries, and Panocean Storage & Transport, which specialized in moving and storing bulk liquids in Europe and the United States. Its marine services sector included O.I.L. Ltd., which provided support services for the offshore oil industry worldwide and was the second largest in the world, while Cory Towage provided towage services in certain parts of the world.

By this time, the company had also built up a stake in the environmental services industry. In the United Kingdom, it disposed of a fifth of London's refuse, among other contracts, and in the United States it operated a chain of 20 environmental testing laboratories.

Final Years

Despite its restructuring efforts, Ocean Group's lackluster performance of the early 1990s left it repositioning once again. Prompted by investor disinterest in the company, Ocean Group management began looking for a new leader to revamp the company. "We needed someone to reshape the headquarters and the operating units with a modern set of solutions, not the concepts of the 1950s and 1960s, which were still evident," claimed former chairman Peter Marshall in a 1998 Management Today article. Management decided on business executive John Allan, who was named CEO in 1994.

Under Allan's leadership, Ocean Group began to shift its focus to global logistics. The strategy appeared to pay off. In 1998, revenues increased by nearly 20 percent over the previous year while operating profit grew by 32 percent. That year, the company created MSAS Global Logistics, uniting all of its logistics businesses, including MSAS Cargo International, under the new name.

The company was also involved in strategic ventures and key acquisitions during this time period. In 1996, the company established a joint venture in China and subsidiaries in Finland and Korea. The following year, Intexo and Marken were acquired, and ventures were set up in Brazil, India, and Chile. Acquisitions in 1998 included Oslo Havnelager, Mercury, Laker Cargo, Skyking, A.W. Fenton, and Dutch Air. Additional purchases followed in 1999, including Mark VII, Malenstein, Parkhill Reclamation, and Aerocar Spedition AB. Then, in 2000, Ocean Group set its sights on National Freight Corporation (NFC), which had recently restructured into a supply chain management firm.

In 2000 Cory Towage was sold to the Dutch company, Wijsmuller Group. This eventually became Switzer as part of the A.P. Moller - Maersk Group. Then Ocean plc and NFC plc merged in 2000 to form a major logistics group as Exel plc. In 2005 Exel PLC was taken over by DHL (a subsidiary of Deutsche Post World Net) and now operates as DHL Exel Supply Chain.

Thus Alfred Holt's Ocean Group, which had started off back in 1865 as the Ocean Steamship Company and parent company for Alfred Holt & Co. (Blue Funnel Line), one of Britain's great shipping groups, disappeared due to mergers and consolidation in the shipping industry and globalisation. It is truly the end of a glorious era.

DHL (Excel Supply Chain)
www.dhl.com

Singapore Airlines
www.singaporeair.com

Malaysia Airlines
www.malaysiaairlines.com

Maersk Line
www.maerskline.com

Switzer
www.switzer.com

Delmas
www.delmas.com



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