Norwegian Shipping in The 20th Century

PALGRAVE STUDIES IN MARITIME
ECONOMICS
Stig Tenold
Norwegian Shipping
in the 20th Century
Norway’s Successful
Navigation of the World’s
Most Global Industry
Palgrave Studies in Maritime Economics
Series Editors
Hercules Haralambides
Erasmus School of Economics
Erasmus University Rotterdam
Rotterdam, The Netherlands
Elias Karakitsos
EN Aviation & Shipping Research Ltd
Athens, Greece
Stig Tenold
Department of Economics
NHH – Norwegian School of Economics
Bergen, Norway
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Stig Tenold
Norwegian Shipping
in the 20th Century
Norway’s Successful Navigation of the
World’s Most Global Industry
Stig Tenold
Department of Economics
NHH – Norwegian School of Economics
Bergen, Norway
Palgrave Studies in Maritime Economics

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For havets folk – A la gent del mar
For those who sailed, for those who worked long days in the office,
and for those who waited at home.
Acknowledgements
This book is the result of more than two decades of research on Norwegian
shipping. Along the way, I have benefitted greatly from the conferences
and publications of an international community, centred around the
International Maritime Economic History Association (now the
International Maritime History Association). The most important pilot
in these academic waters was Skip Fischer (1946–2018), and this book is
dedicated to his memory.
Over this period I have had interesting discussions with many people,
who have shaped my ideas on maritime history in general, and the
Norwegian dimension, in particular. I am grateful to Yrjö Kaukiainen
and Jari Ojala in Finland; Gelina Harlaftis and Ioannis Theotokas in
Greece; Lars Chr. Bruno, Espen Ekberg, Even Lange, Eivind Merok and
Lars Fredrik Øksendal in Norway; Jesús Maria Valdaliso in Spain; Martin
Bellamy, Peter N. Davies, Roy Fenton, Maria Fusaro, Hugh Murphy,
Sarah Palmer, David J. Starkey, David Williams and the late John
Armstrong in the UK. In Copenhagen I have collaborated closely with
CBS Maritime, in particular Martin Jes Iversen, René Taudal Poulsen
and Henrik Sornn-Friese, and in London I have had the pleasure of shar-
ing the vast shipping experience of Otto Norland and Martin Stopford.
At home in Bergen I have learnt much from discussions with Dag Bakka
jr., Bjørn Basberg, Geir Belsnes, Camilla Brautaset, Jan Tore Klovland,
Victor D. Norman, Bjørn Sjaastad, Siri Pettersen Strandenes, Arnljot
vii
viii Acknowledgements
Strømme Svendsen and Roar Ådland, as well as colleagues at the Bergen

Maritime Museum and NHH – Norwegian School of Economics.
The majority of this book was written when I was on Sabbatical at the
Department of Scandinavian Studies at the University of Washington in
Seattle. I know that this stay has made the book different, and I believe
that it has made it better. I am grateful for the warm welcome from
Christine Ingebritsen, Lars Jenner, Andy Nestingen, Tina Swenson,
Olivia Gunn and Terje Leiren; the last two have also been particularly
useful in discussions about the contents.
Although this is not a textbook, I “tested the waters” with students in
my Maritime History and Economics class, who commented upon the
first two chapters. Their reward was getting their names in an academic
book. Well done, Kristoffer Bringslid, Nils Petter Farstad, Thomas Rødahl
Fossland, Sindre Gripsgård, Benjamin Hui, Ruth Søyset Jensen, Nekane
Larrañaga Pesquera, Boudewijn Leereveld, Jørgen Fie Padøy Mathiesen,
Herman Hjort Rabsch, Steven Orpheus Sacopayo Schmidt, Samme
Snakkers and Ruben ten Berge. Bjørn Basberg and Sina Øilo Tenold have
also read parts of the manuscript, and provided useful comments.
Four people have read and commented in detail on the manuscript,
and deserve a special mention. Jan Tore Klovland, Hugh Murphy, Klaus
Remme and Marit Øilo have been very helpful, and have uncovered mis-
takes and inconsistencies that slipped through my net. Any remaining are
of course my own responsibility, but I am extremely grateful for their
help and enthusiasm.
Academic publishing is rapidly changing, and new possibilities are
opening. The costs of the Open Access-publication of this book have
been paid for by Norges Rederiforbunds Fond for NHH [The Norwegian
Shipowners’ Association’s Fund for NHH] and Norges Handelshøyskoles
Publiseringsfond [The NHH Publication Fund]. I am lucky to have their
help in disseminating my research. I would also like to thank Taiba
Batool, who commissioned this book project, as well as Publisher Rachel
Sangster and Editorial Assistant Joseph Johnson at Palgrave Macmillan
for their patience and support during the writing process.
Contents
1 A Brief Introduction to Norwegian Shipping 1
2 The Starting Point: A Small Country, but a Major

Maritime Nation 21
3 The First World War: The Neutral Ally 63
4 Crisis? What Crisis? Norwegian Shipping in the Interwar

Period 91
5 The Second World War 133
6 Bigger and Bigger: Shipping During the Golden Age,

1950–73 159
7 The Shipping Crisis 195
ix
x Contents
8 Rebound: The Return of Norwegian Shipping 231
9 Onshore and Offshore: The New Maritime Norway 259
10 Epilogue: A Century of Norwegian Shipping 275
Index 311
List of Figures
Fig. 1.1 Norway’s merchant marine (1000 grt) and share of the world
fleet, per cent, 1900–2000 6
Fig. 1.2 The Norwegian foreign-going fleet, share of total by region,
1900, per cent 13
Fig. 2.1 Norwegian foreign-going shipping 1900, by country and
region, per cent 26
Fig. 2.2 Shipping volumes (1000 grt, left axis) and freight revenues
(million kroner, right axis) 1900 28
Fig. 2.3 Estimates of the Norwegian fleet, 1800–1900, 1000 net regis-
ter tons 41
Fig. 2.4 Average annual fleet increase and decrease by source, 1851–
1900, 1000 net register tons 43
Fig. 3.1 Norwegian losses during the First World War by year, 1914–
1918, seafarers and 1000 grt 79
Fig. 3.2 The shipping speculation boom, stock exchange indices
(1913 = 100), 1914–1921 82
Fig. 4.1 Gross freight earnings, nominal and real, 1900–1939, NOK
million98
Fig. 4.2 Steam and motorship shares, per cent, 1900 and 1938, based
on gross tonnage 111
Fig. 4.3 The number of tanker companies in various Norwegian regions,
1919–1939114
xi
xii List of Figures
Fig. 4.4 Norwegian lay-ups, quarterly estimates, 1920–1939, 1000

dead weight tons (dwt) 122
Fig. 5.1 Losses during the Second World War, persons and 1000 grt,
1939–45146
Fig. 6.1 GDP per capita, long-term trend and actual development
(1000 1990 Int.$), 1900–2000 162
Fig. 7.1 Average economic growth, based on PPP-adjusted GDP, 1950–
73 and 1973–2001 198
Fig. 7.2 Seaborne crude oil transport demand, trillion ton-miles, 1962–
1973 and 1974–1985 202
Fig. 7.3 Supply and demand in the tanker market (1970 = 100), 1970–
1987203
Fig. 7.4 The crisis index. The Norwegian fleet and tankers, number of
seafarers and shipping companies and net freight earnings
(1970 = 100), 1970–1987 215
Fig. 7.5 Norwegian market shares, world fleet and major segments,
1973219
List of Tables
Table 2.1 The world fleet and seaborne trade of leading countries, 1900 23
Table 2.2 The Norwegian fleet, transport and revenue, 1900 30
Table 2.3 Norwegian ships’ most important port calls and voyages
around the turn of the century 31
Table 4.1 The 10 leading Norwegian shipping companies, 1 September
1939, fleet size and structure 120
Table 7.1 The break in development; output growth, inflation and
unemployment, 1965–1985 197
Table 7.2 From good to bad—a comparison of strategic indicators at
the start of the shipping crisis 206
Table 7.3 Leading Norwegian niches and niche companies 222
Table 8.1 The development of important OECD fleets, 1973–1987 233
Table 9.1 The 15 most important maritime countries and territories,
January 2001 267
xiii
1
A Brief Introduction to Norwegian
Shipping
For the past 15 years, Norway has topped the Human Development Index,
a world ranking of the standard of life in different countries reported by
the United Nations Development Programme.1 The ranking takes into
account factors such as health, education and income.
Norway’s high Gross Domestic Product (GDP) per capita and a far-
reaching—but expensive—welfare state, explain the pole position.
Norwegians have practically free access to health provisions and educa-
tion, financed through a high level of taxation. Although the per capita
GDP is boosted by substantial revenues from petroleum exploration, the
country was a high-income economy—with a standard of life that was
above average in a European context—even before the discovery of oil.
However, Norway had an economic structure that differed from practi-
cally all other “developed” economies.2
1
In twelve of the fourteen reports published after 2001, the country was number one, toppled only
by Iceland in 2007 and 2008; see UNDP (2014), Table 2, 164. Based on revised figures, following
a 2010 reformulation of the equation used to calculate the Human Development Index, Norway
ended up at the top in 2007 and 2008 as well.
2
For a discussion of the atypical Norwegian development, see for instance Sejersted (2002) or Brox
(2016). The best English-language presentation of its economic development is still the slightly
© The Author(s) 2019 1

S. Tenold, Norwegian Shipping in the 20th Century, Palgrave Studies in Maritime
Economics, https://doi.org/10.1007/978-3-319-95639-8_1
2 S. Tenold
Given that Norway is a small economy, relations with other countries

are particularly important for economic welfare. Unlike other wealthy
nations, the Norwegian economy was not built on the production or
exports of manufactured goods. The high living standards in the latter
half of the 20th century were primarily the result of a combination of
exports of staples—petroleum and fish—and services. As such, the devel-
opment followed an already established pattern.
The modern Norwegian economy took shape in the second half of the
19th century. It was built on three export pillars; wood, fish and shipping
services. These continued to be the major exports until the large-scale
exploitation of offshore oil and gas reserves from the 1970s onwards. By
far the most important of these three was the seaborne transport of
goods—shipping—which typically made up between a third and half of
the export revenues. Norwegian shipowners and seafarers sold their ship-
ping services all over the world, ensuring revenues that were necessary to
finance the imports of essential foodstuffs, raw materials and manufac-
tured goods.
An Important Maritime Nation

Seaborne transport is the lifeblood of the world economy. Shipping ties
countries together in a system of production where raw materials, inter-
mediate goods and finished products are efficiently moved between coun-
tries and continents. Reductions in transport costs have encouraged
specialization and division of labour on a global scale, ensuring a massive
growth in production and income. World welfare increased as economic
relationships between nations tightened, and more and more countries
became involved in the development of a truly international economy.
Seafarers, shipping companies and shipbuilders have thus made our
increased standards of living possible.
Throughout the 20th century, Norway was one of the world’s leading
maritime nations. This small country, situated in the north-western
outdated Hodne (1983), but see also Moses (2005). A new and convincing story, unfortunately
only in Norwegian, is Sandvik (2018).
A Brief Introduction to Norwegian Shipping 3
c orner of Europe, at times carried more than 10 per cent of all cargoes
that were transported by sea. When manufacturing production spread,
first within Europe, then to North America and onwards to Japan and
other countries in Asia, Norwegian ships and seafarers ensured safe and
efficient transports of inputs and outputs within an increasingly complex
system of production. Moreover, the merchant marine played a particu-
larly important role during the two world wars, aiding the Allied cause
and ensuring the supply of vital goods at high economic and personal
costs.
Shipping is the most global of all industries. The main means of pro-
duction—the ship—usually operates outside national boundaries.
Therefore, the rules are different in shipping than in other types of busi-
ness. The international character of the industry makes it possible to
combine inputs from different countries to a much larger extent than in
other types of production. The 20th century saw Norway develop into
one of the world’s wealthiest countries, with a high standard of living and
matching wage levels. Still, Norwegian shipping companies remained
competitive in the cutthroat international shipping industry. This posi-
tion is testament to a favourable starting point, as well as skilful adapta-
tion to new technologies, markets and conditions.
The country’s important role in the maritime industry was a source of
pride already at the start of the century. In the official Norwegian publi-
cation for the 1900 Exposition Universelle World Fair in Paris, the mari-
time heritage is explained in the long-winded flowery prose of the time:
“The geographical position and physical condition of Norway and the
natural disposition of the Norwegian people, have always caused their
intercourse with other nations, through commerce and shipping, to be of
the greatest importance to the country, both as regards the economic and
industrial life of the people and the whole national and cultural develop-
ment […] The long coast-line, with its many well-protected harbours,
renders shipping a livelihood especially adapted for our country; and the
Norwegians have at all times excelled in their inclination and ability for
this occupation.”3
Kiær (1900, 403). As the following discussion will show, the term “at all times” should be taken
3
with a small shipload of salt.

4 S. Tenold
Therefore, at the very beginning of the 20th century, Norway tried to

project an image of a major maritime nation, where the close relationship
to the sea was an inevitable, instinctive inclination. There is undoubtedly
an element of truth in this; Norwegians—primarily men—were drawn to
the sea in large numbers. However, this “destiny-based” explanation
undermines an important aspect of the development: the pragmatic
explanation. Seafarers took to the sea out of necessity, not because it was
in their nature. Shipowners invested in shipping because it was profit-
able, not to facilitate their compatriots’ desire to sail the world.
The aim of this book is to explain how Norway managed to maintain
its position as a leading maritime nation throughout the 20th century,
despite fierce international competition and a series of technological and
institutional changes. It is a story about a small country and its increas-
ingly close economic relations with the rest of the world—a country that
has benefitted greatly from, but also been challenged by, economic
“globalization.”4 We will follow the development in four different are-
nas—or, rather—one arena, where our focus varies between four inter-
related perspectives; the international, the national, the regional and the
company perspective.
The International Shipping Industry

In order to see the complete picture, we have to start at the international
stage. Here, Norwegian shipping companies found a demand for trans-
port that they could satisfy, as well as significant competition from for-
eign shipowners. It is difficult to explain the development of Norwegian
shipping without paying close attention to the underlying basis: the
international economy, with its ebbs and flows and with the associated
fluctuations in shipping demand and supply. Norwegian and interna-
tional shipping went hand in hand, and it is impossible to understand
one, without also taking into account the other.
4
For extensive discussions of history and globalization, see Osterhammel and Petersson (2005) and
O’Rourke and Williamson (1999). Starkey and Harlaftis (1998), contains a series of papers on vari-
ous aspects of shipping and globalization.
The shipping industry has changed tremendously during the 20th cen-
tury—technologically, commercially and institutionally. The first decades
are typically associated with the emergence of the large luxurious ocean
liners that steamed across the North Atlantic. Ships such as Deutschland,
Kronprinz Wilhelm, Vaterland, Lusitania and the iconic Titanic repre-
sented Anglo-German rivalry in the quest for the Blue Riband—the speed
record across the Atlantic—for size records and for market dominance.
Still, this was the high-end of international shipping. For the Norwegians,
the starting point was very different and much less glorious.
Norway—not even a fully independent nation until 1905—was a
minor in world politics. Similarly, the country did not have the resources
to participate in the bells and whistles race for the domination of the
Atlantic liner trade. Instead, most of the ships plied the world’s oceans,
looking for business opportunities and using the skilful seamanship of
their captains and crews as their main selling point. Norwegian ships
handled transport needs all over the world. As the European dominance
of international trade and world politics declined later in the century, this
global approach turned out to be a fortunate strategy.
In 1900 Norway had a substantial, but increasingly uncompetitive,
sail-dominated fleet, much of which had been bought second-hand
from countries that had modernized their merchant marines. According
to some, Norway was at the time known for its “excellent sailors and
rotten ships.”5 Nevertheless, the country’s shipowners had managed to
establish a number of profitable niche markets, where ships and seafar-
ers could be put to good use. These were usually not in the liner trades—
the regular “bus services” of the sea—but in the so-called tramp trades,
where the Norwegians would offer to “transport anything, anytime and
anywhere.”
This vast international arena will be the backdrop of our story, the
stage on which the players perform. The international arena restricts the
room to manoeuvre and influences development. However, a book about
Norwegian shipping clearly has to have a national dimension. Within this
national setting, we find the pre-conditions for the sector’s growth; the
entrepreneurs, the resources, the networks, the skills, the traditions, the
Hovde (1948, 259).

5
6 S. Tenold
values and the policies. Thus, with regard to the national level, we will
have to answer two crucial questions:
• If we want to learn about the development of the shipping industry in

the 20th century, why is Norwegian shipping more relevant than, say,
Swedish, Italian, Nigerian or Argentinian shipping?
• Which factors—specific to Norway, either alone or in combination—
can explain the country’s leading role in international shipping
throughout the 20th century?
Finding the answer to the first question is relatively easy: the Norwegian
influence on world shipping was simply greater than that of most other
nations, which makes the country’s role more relevant. Figure 1.1 is an
illustration of the size of the Norwegian merchant marine and its share
of the world fleet. This is a far from straightforward measure, and over
time both the sources and the manner in which the share is calculated
has changed. Still, as a rough indication, the pattern in Fig. 1.1 is useful.
30000 12
1000 gross tons - left axis
25000 10
Percentage of world fleet - right axis
20000 8
15000 6
10000 4
5000 2
0 0
1912
1924
1952
1964
1980
1992
1900
1904
1908
1916
1920
1928
1932
1936
1940
1944
1948
1956
1960
1968
1972
1976
1984
1988
1996
Fig. 1.1 Norway’s merchant marine (1000 grt) and share of the world fleet,
per cent, 1900–2000. (Source: Statistics Norway (2000), Table 417, 348–350. See
footnote)
On average, for all of the 20th century, almost 6 per cent of the world’s
fleet was in Norwegian hands. And—for comparison purposes—the
Norwegian share of world population in the period declined from around
1.3 per cent to less than 0.8 per cent, illustrating the disproportionate
Norwegian participation in world shipping.
Figure 1.1, shows the development of the Norwegian fleet, and the
country’s market share, throughout the 20th century.6 The fleet grew
slowly around the start of the century, though the ongoing transition
from sail to steam provided a structural quality improvement that is
obscured in the data, and thus also in the figure. The losses of the First
World War led to a temporary decline in the fleet, before an interwar
growth that was atypical in an international perspective and led to a
growing share of the international market.
The Second World War led to massive losses, and the pre-war tonnage
volume was not recovered until 1949. From then on, the Norwegian fleet
increased at an enormous pace—doubling in the 1950s and doubling
again in the 1960s—before the market crashed spectacularly during the
great shipping crises of the 1970s and 1980s. The subsequent reduction
of the fleet was unprecedented—by some measures, the decline amounted
to more than 75 per cent from 1977 to 1987—but in the late 1980s, a
policy shift gave the Norwegian merchant marine a new lease of life.
6
Figure 1.1: Data on the Norwegian fleet from Statistics Norway (2000), Table 417, 348–350.
Based on sailing ships larger than 50 gross register tons (grt) and steamships and motorships larger
than 25 tons. In order to get a consistent series, the following conversions have been made for the
period 1900–1909: Conversion from net to gross tonnage by adding 8.6 per cent for sailing vessels
and 65 per cent for steamships and motorships. Reduction by 10.9 per cent for sailing vessels and
0.8 per cent for steamships and motorships in order to neutralize the inclusion of vessels smaller
than 50 tons (sailing ships) and 25 tons (steamships and motorships). Conversion factors estimated
on the basis of 1909 data. Data from 1987 onwards include the Norwegian Ordinary Register and
the Norwegian International Ship Register. Share of world fleet estimated on the basis of data for
steamships and motor vessels in Lloyd’s Register, various issues; OECD, Maritime Transport, various
issues; and UNCTAD, Review of Maritime Transport, various issues. Estimates before 1907 are
based on data from Statistics Norway. Given the late transition from sail to steam in Norway, the
share of the world fleet is more than one percentage point lower in 1900 than if sailing vessels were
included, but the discrepancy decreased as sailing ships were phased out in Norway as well. Due to
changes in definitions across time, the series should be seen as an approximation. For instance, if
we include Norwegian ships flying foreign flags, and use deadweight tonnage as the basis for the
comparison, the Norwegian share in the year 2000 would almost be double the 4 per cent shown
in the figure.
8 S. Tenold
The bounce-back was spectacular, with the fleet multiplying by a

factor of three over a four-year period. The introduction of the
Norwegian International Ship Register (NIS), which enabled the use
of low-cost foreign seafarers on Norwegian-flagged vessels, was the
most important reason for this strong influx of new tonnage. Even
though the pre-crisis position was never regained, the country remained
one of the most important players in the international shipping
industry.
Norway’s significant position in international shipping at the start of
the 20th century reflected the prominent role that shipping played in the
Norwegian economy. In an article published in the prestigious Journal of
Political Economy in 1893, Anders Nikolai Kiær, Director of Statistics
Norway and the leading international maritime statistician at the time,
presented data on tonnage per capita in the leading maritime nations in
1890. Norway’s 1100 tons per 1000 inhabitants was more than double
that of the second-ranked “Great Britain and Ireland.”7
The fact that the average Norwegian “controlled” more than a ton of
shipping capacity is a good illustration of how much of the country’s
resources must have gone into this sector. Such per capita calculations
are “statistical doping,” though. Relative measures might be mislead-
ing, and they can give small countries an appearance of importance
that is not necessarily warranted. However, in the case of shipping, the
Norwegian position shines even without such trickery—the country
established its position among the five leading maritime nations in the
1870s, and largely maintained such a rank over the subsequent
century.
So, clearly a book about the Norwegian merchant marine can tell us
a lot about the development of the international shipping industry in
the 20th century. The crucial roles played by Norwegian ships, ship-
ping companies and sailors make their experiences relevant. The
answer to the second question above—about how Norway’s leading
role can be explained—is not as straightforward. It will take a book to
answer.
Kiær (1893, 361).

7
What Is “Norwegian Shipping”?

There is one major challenge, however. As suggested in connection with
Fig. 1.1, the national dimension is evasive, and even more so as we move
closer towards today. At the start of our period, it was relatively evident
and uncontroversial to define what “Norwegian shipping” implied and
what a “Norwegian ship” was. The flag, the crew and the ownership all
pointed in the same direction. Subsequently, and particularly in the past
decades, this link between the industry, the nation, the workforce and the
assets—or capital—became eroded. Consequently, one of the things to
address in this book is the manner in which the concept of “Norwegian-
ness” has changed. Gradually the ties between the home country and the
ship have been transformed, or in some cases even severed.
A related question is whether it is possible to distinguish a “Norwegian
way of doing shipping”, what we could call a “typical” Norwegian busi-
ness strategy. There are undoubtedly some strategic elements—for
instance related to the organization of ownership and investments, the
market orientation, the choice of technology, etc.—that have distin-
guished Norwegian shipping companies from those in other countries.
At the same time, even these strategic elements have changed across time,
influenced by technological possibilities, market developments, policies
and domestic and international conditions.
Differences in strategy among shipowners in different countries led to
a variation in the type and condition of ships, and these national prefer-
ences were even evident to outsiders. In his book Fish Story—“regularly
described as a seminal work on the theme of globalization”—the American
photographer and critic, Allan Sekula, refers to what he called “a biased
national physiognomy of vessels.” In his scheme, at a point in time that
he imprecisely refers to as “in the past,” Norwegian ships were “neat,”
while the ships that belonged to their Greek competitors were “grimy.”8
However, neither the strategies nor the “national physiognomy” were
static. Today, there is little reason to expect that there will be such
8
Roberts (2012, 3) and Sekula (1995, 12). This phenomenon—why Norwegian ships were more
modern and well-kept than Greek vessels—had a relatively simple economic explanation; see the
analysis of the differing strategies of the two countries’ shipping companies in Tenold and Theotokas
(2013).
10 S. Tenold
variations between Greek-owned and Norwegian-owned ships. Greek

ships are no longer generally grimy, Norwegian ships are not necessarily
neat. Vessels from these two nations might in fact be indistinguishable—
identical down to the ensign flown at the stern of the ship, which could
belong to Panama, Liberia or the Marshall Islands.
Shipping changed, ships changed and Norway changed. In broad
terms, Norwegian shipowners entered the last century with a fleet that
consisted of a high share of outdated sailing vessels, went through periods
with investments in relatively modern and large ships, in particular oil
tankers, before finishing the century with a fleet that was known for
being expensive, technologically advanced and geared towards certain
smaller niche segments. Yet, while this broad pattern represents the typi-
cal Norwegian development, it clouds the diversity of the country’s ship-
ping sector.
There have been substantial strategic differences among Norwegian
shipping companies, and some of these differences also follow a geo-
graphical pattern. With regard to the level of activity and the interna-
tional orientation, the sector has been much more important in the
southern part of the country than in the northern part. Moreover, it is
possible to identify a traditional East Coast/West Coast dichotomy—a
tool favoured by everyone from marine biologists to poets and rappers.
This difference between the east and the west has been evident when it
comes to investments, networks and market orientation. It becomes
clear by looking at the fleets and how the ships are employed, and anec-
dotal evidence and interviews with industry participants underscore
the contrasting attitudes between the eastern and western parts of
Norway.
Regional Differences
Although their markets were found all over the world, the Norwegian
shipping companies used to have strong links to their home base in a
specific city or region. At the start of the 20th century, these companies
were usually local businesses, with workers and funding often found in
the neighbourhood—but used globally. Gradually labour and capital
would be sourced from locations further away—even crossing interna-

tional borders in the last quarter of the 20th century. Some of the older
Norwegian shipping companies successfully managed this transition,
from local ventures to multinationals, while others were unable to trans-
form their business models and disappeared.
The aggregate company developments—the business histories—make
up the whole. Here we find the reasons for the growth and demise of
individual businesses and of maritime cities and regions; the latter often
referred to in political parlance as “maritime clusters.” There is a tendency
for companies in the same environment to act in a similar manner—
either because of identical stimuli or due to a common mind-set. Local
fortunes depend upon the success or failure of individual companies, and
when these act in the same manner, the whole region becomes affected by
their development.
An example of such a regional paradigm is the Agder-region, on the
south coast of Norway. In the late 1870s, Agder shipowners controlled
around a third of the Norwegian fleet. Given that Norway at the time was
the world’s third largest shipping nation, with around 6 per cent of the
world fleet, investors in the Agder-region owned around 2 per cent of the
world’s merchant marine. This was a spectacular share for a region with
only 150,000 people. In the middle of the 1870s, Agder controlled more
sailing ship tonnage than did Russia, Sweden, the Netherlands or Greece.9
The position was not sustainable. The shipping hegemony in Agder
was based on a business and ownership structure that initially had been
associated with the building of wooden ships at local yards. This implied
that the investments were closely linked to the increasingly uncompeti-
tive sailing ship technology, as was the region’s subsequent demise.
Shipping companies in Agder—many of them organized as part owner-
ships in possession of only one sailing ship—followed their vessels on the
path to extinction. When the ships were demolished—or perished at
sea—there were seldom sufficient funds to reinvest in new tonnage.10
9
Computed on the basis of data in Jeula, 1875. If we count “a ton as a ton”, and consider both
sailing ships and steamships, the Agder fleet would be marginally larger than the fleets of Sweden
and Russia.
10
In this instance, “shipping company” refers to the part ownerships that were the formal owners
of the ships; a corresponding owner might manage a larger fleet and have interests in more than one
12 S. Tenold
By 1925, the Norwegian share of the world merchant marine had been
reduced to 4.5 per cent, and Agder’s share of the Norwegian fleet had
plummeted to 5 per cent. Therefore, within the span of two generations,
ownership in the Agder-region had gone from 2 per cent to 0.2 per cent
of the world fleet.11
The Agder example is extreme, but it illustrates the fact that local dis-
tinctions are important. Based on the pattern of ownership in 1900, we
can identify a set of broad geographical typologies that had developed
over the previous decades. The capital, Kristiania (now Oslo), was big,
but unsophisticated. Kristiania had the largest tonnage, measured in sim-
ple terms, but was surpassed by Bergen when we take into account the
quality of the ships, specifically the fact that steam vessels were more
advanced and could transport larger amounts of goods due to their higher
efficiency.
Bergen had a distinct lead in the transition from sail to steam, with a
diffusion that very much mimics the British experience. Steam tonnage
surpassed sail tonnage in Bergen in 1884—an impressive 25 years before
the same thing happened for the fleet registered in the rest of the coun-
try.12 While Kristiania and the homeports around the Oslofjord held an
intermediate position in the transition, the South Coast was clearly the
home of the traditional sailing ships. As the subsequent development
would show, by 1900 these sails represented a dying technology that lost
out in one market segment after another.
Norway is a long country, stretching from the 57th parallel to the 71st
parallel north. Most of the population, as well as the cultural, political
and economic centres, are situated in the southernmost quarter of the
country. This imbalance has characterized the shipping industry as well—
in 1900 more than 95 per cent of the Norwegian fleet was owned in this
part of the country.
ship. However, the part ownership functioned like today’s project investments. After the end of the
project, the remaining capital—the sales price, the demolition price or insurance money—was paid
out to investors.
11
See Johnsen (2001) for an analysis of the development. Agder shipping was subsequently rejuve-
nated, before another spectacular haemorrhage during the shipping crises of the 1970s and 1980s.
12
Pettersen (1981, 45).
50
Steam tonnage
45
Sail tonnage
40
35
30
25
20
15
10
5
0
Oslofjord east Oslofjord west South West North
Fig. 1.2 The Norwegian foreign-going fleet, share of total by region, 1900,
per cent. (Source: Statistics Norway (1902), Table 1d, 9–10. See footnote)
Figure 1.2 illustrates the large geographical differences in the owner-

ship of the Norwegian fleet at the start of the 20th century. The figure
shows Norway divided into five regions, with their respective shares of
the country’s sail and steam tonnage.13 The differences between the west
of Norway, which includes Bergen, and the south, are striking. Data for
the ships engaged in foreign trade show that South Coast shipowners
owned more than a third of the country’s sailing tonnage, but only slightly
more than 5 per cent of the steamships. Shipowners in the western part
of Norway owned almost half the foreign-going steam fleet, but only
slightly more than 10 per cent of the sailing ship fleet.
13
Figure 1.2: Statistics Norway (1902), Table 1d, 9–10. Based on ships of all sizes engaged in the
foreign-going fleet. Vessels engaged in domestic coastal trade and sealing and whaling (including
walrus hunting) are excluded. The categories include the home ports in the following regions:
Oslofjord East: Smålenene, Akershus, Kristiania
Oslofjord West: Buskerud, Jarlsberg and Larvik, Bratsberg
South: Nedenes, Lister and Mandal
West: Stavanger, Bergen, Søndre Bergenhus, Nordre Bergenhus
North: Romsdal, Søndre Trondhjem, Nordre Trondhjem, Nordland, Tromsø, Finnmarken.
14 S. Tenold
This geographical division becomes even more striking if we look at

individual ports. By 1900, steamships made up almost 97 per cent of the
Bergen fleet—even when we count “a ton as a ton” and disregard the fact
that a ton of steam capacity was much more efficient than a sailing ship
ton.14 In southerly Arendal, on the other hand, the white sails still ruled—
sailing ships made up around 90 per cent of the city’s tonnage.15 Other
ports on the South Coast were clinging even harder to the old technol-
ogy. The home port of Lillesand housed only one steamship—68 tons of
modernity—but in excess of 40 sailing ships, amounting to more than
21,000 gross tons. Moreover, seven other towns, mainly on the South
Coast, had substantial sailing ship fleets, but not a single steamship above
50 tons.
Shipping’s important economic role was of course reflected at the local
level—in investment and employment, naturally, but also in status and
politics. In a country where nobility had been abolished by law at the
start of the 19th century, wealthy shipowners came to play crucial roles in
their communities. When the playwright Henrik Ibsen wrote about The
Pillars of Society, the main character was an impatient businessman
involved in shipping and shipbuilding.16 This is a literary example of the
privileged positions that shipowners had in towns and cities along the
coast—and art imitated life. The maritime men were important at the
national level as well—three of the first five Prime Ministers in “indepen-
dent Norway” were shipowners. Egeland points out the remarkable fact
that Michelsen, Mowinckel and Knudsen, “the three dominating
Norwegian politicians – one should indeed use the word ‘statesmen’ – in
the first four decades [of the 20th century] came from the shipowning
profession.”17
14
This and subsequent calculations based on vessels above 50 tons in Statistics Norway (1902); see
Fig. 1.2 for an explanation.
15
Though, to be fair, the sails were far from as white as they are usually depicted, and they were also
substantially more patched. Perhaps a better description would be “sails in 25 shades of white and
another 25 shades of black.”
16
An alternative title, favoured by the Royal Shakespeare Company, is The Pillars of the Community,
which perhaps better reflects the local dimension. The main character of the play, Karsten Bernick,
was allegedly modelled by Henrik Ibsen on Morten Smith-Petersen, a Grimstad shipowner who
was married to the author’s second cousin.
17
Egeland (1973, 73).
Shipping Companies
The skilled and lucky ones could make a fortune from shipping, but it
was also a risky undertaking. Compared with other countries and other
Norwegian industries, the “turnover” of shipping companies was very
high. Throughout the 20th century, in booms as well as crises, established
companies went bankrupt or ceased operations for other reasons—bro-
ken partnerships, deaths, succession challenges, low profits or high com-
petition. However, the businesses that disappeared were usually replaced
by new companies—with the exception of one particularly violent period,
during the crisis of the 1970s and 1980s.
This turbulence was not all negative. In fact, to a large extent the mod-
ernization of Norwegian shipping took place through the establishment
of new companies—and removal of old ones—rather than as a result of
transformation within existing organizations. Out with the old and in
with the new. This does not mean that there are no shipping companies
with long traditions in Norway. Among the largest shipping companies
in Norway at the start of the 21st century, we find quite a number of “old
timers”; of the 30 largest shipping companies in Norway in 2003, 18
were established before 1960, and another three had links—though not
unbroken ones—to companies that existed in 1960. However, an inter-
national comparison reveals that the turnover was substantially higher
than, for instance, in neighbouring Denmark.18
Just like the shipping sector itself was transformed, the shipping com-
panies’ business models changed dramatically during the 20th century.
Shipping companies have faced major shifts in markets, technology,
infrastructure, capital, competence and policies—shifts that have been so
dramatic that, in current management consultancy lingo, they would be
labelled “disruptions.” To prosper and survive, the companies had to
adapt their business models and long-term strategies to the new circum-
stances. Those that did not, lost out in the competition and ultimately
failed, replaced by entrepreneurs that understood the new regimes.
The 20th century saw the shipping companies’ business models develop
from single vessel partnerships based on local factors of production, to
18
Compare the developments in Tenold (2012) and Sornn-Friese, Poulsen and Iversen (2012).
16 S. Tenold
stock exchange-listed multinational conglomerates that drew labour and

investment funds from a global pool. This development took place against
the backdrop of a series of technological “revolutions” that changed the
manner in which shipping companies went about their business. The
transformations that first spring to mind are the changes in shipping
technology. New building materials and shifts in the means of propul-
sion—from wood and sail, to iron and steel, steam and diesel—changed
the skill set necessary to build, operate and commercially manage ships.
Moreover, as ships became more expensive, the need for financing and
insurance changed, as did the competence necessary to manage a ship-
ping company.
Likewise, innovations that were not directly related to shipping also
played important roles. Knowledge—often determined by access to
information—is essential to make good decisions in shipping, as in most
other industries. However, shipping companies have to base many of
their decisions on information from markets that are far away. In the
19th century, sailing vessels often had very little contact with the “head-
quarters” on land, making the ship’s master particularly important for
decision-making.
During the 20th century—with the exception of the two major wars—
the access to and quality of information constantly improved. As a result,
the fabric of the shipping industry changed. Innovations in communica-
tions technology—first from the telegram to the telephone, then from
the telex to the telefax, finally to the internet and satellite links to ships at
sea—muted the effect of distance. The technological improvements
changed how decisions were made and who made them.
The changes in the business model also had ramifications for the spa-
tial distribution of shipping companies—a process sometimes referred to
as “a dislocation of the comparative advantages.”19 As the infrastructure
changed and the need for capital and managerial competence increased,
Norwegian shipping became increasingly centralized. Proximity to infor-
mation sources—and to other shipping industry participants—became
more important. The captains, far from home, were no longer the main
decision-makers. Now the shipowners, with improved access to
Fritz (1980, 148).

19
information, increasingly decided the business and instructed the cap-

tains by means of telegraph.
While the ownership of sailing vessels had been extremely dispersed at
the start of the 20th century, now the large towns and cities gained a clear
advantage. Most shipping company headquarters were located in the
larger cities by the second half of the 20th century. Still, the industry
continued to play an important economic role in more remote areas.
With regard to employment, in particular, the shipping industry pro-
vided job opportunities for people based in rural districts and in sparsely
populated parts of the country.
The number of Norwegian seafarers reached a post-war peak in 1960.
That year, more than 53,000 seamen paid tax in bygder [non-urban
municipalities]. In fact, the proportion of seamen in such rural areas was
almost twice as high as the proportion of seamen in the cities.20
Consequently, due to the employment opportunities in the merchant
marine, Norway could maintain a relatively scattered population, partly
neutralizing the trend towards urbanization. Country boys did not have
to go to the city to find work—they could go to sea.
Another long-term effect is through family life and gender relations.
Norway is known for being a country with gender equality in most areas,
and the shipping industry might have influenced this. In many families,
the male breadwinner would be at sea for long periods. As a result, many
Norwegian women were given organizational and economic responsibili-
ties that would be uncommon in other countries.21 Moreover, towards
the end of the 20th century, when seafarers’ journeys home were more
frequent, it was often expected that men would take care of the house and
the children. Both of these factors might have contributed to the lauded
Norwegian gender balance.
These two examples illustrate how activities in foreign waters have had
profound implications for the development of Norwegian society on
land. Shipping has influenced the nation and the population in ways that
are neither intuitive nor obvious.
20
Statistics Norway, Tax Statistics (1961, 74). Not all of these seafarers were engaged in foreign-
going shipping.
21
See Lønnå (2010), for a number of examples.
18 S. Tenold
Norwegian Maritime History: An Update

The standard work on Norwegian shipping, Den norske sjøfarts historie
[The history of Norwegian shipping], was 40 years in the making.
Originally intended to be one 560-page volume, in the end it counted
more than 3000 pages across six large books.22 One reviewer acerbically
remarked that no detail was considered sufficiently insignificant to be left
out, and “glimpses of genius” were marred by “free-hand drawing” where
“the imagination was given free rein.”23
The scope of this book is more modest, just like the period under
investigation is more concise. The book is structured as a chronological
voyage through Norwegian shipping in the 20th century. It is not an all-
embracing or definitive history, and that has never been the intention.
Rather, it is an attempt at describing the major long-term trends, while at
the same time analysing how Norwegian actors—authorities, shipping
companies and seafarers—have adapted to the challenges and opportuni-
ties in one of the world’s most competitive industries.
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22
The full title of the series can be translated as “The history of Norwegian shipping from the earli-
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23
Schreiner (1952, 267, 259 and 256). After the harsh review—which also called parts of the series
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20 S. Tenold
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2
The Starting Point: A Small Country,
but a Major Maritime Nation
Norway is larger than anyone knows:

Every ship, under the waving flag,
On the endlessly empty sea
Is a new part of Norway adrift1
At the start of the 20th century, the sentiment of the Nordahl Grieg
poem quoted above undoubtedly rang true: Norway and its flag was
everywhere. The country’s ships were anchored in or voyaging between
ports all over the world, facilitating the growth of commerce and enabling
the formation of a truly international economy. Through ships, sailors
and shipowners, this small country on the outskirts of Europe reached
very far.
Norway had the world’s fourth largest merchant marine, trailing only
supremely dominant Great Britain—with around half of the world’s sea-
borne transport capacity—Germany and The United States. Around 6.6
per cent of the sailing fleet and 3.6 per cent of the steamship fleet were
flying the Norwegian flag.
Grieg 1922, “The Flag” from Rundt Kap det gode Haab, author’s translation.
1

22 S. Tenold
Shipping had continued to increase in importance after Kiær made his

international comparison a decade earlier. Norway’s merchant marine
amounted to 1227 tons per 1000 inhabitants—so the “average”
Norwegian actually owned more than one ton of shipping tonnage.
Consequently, the shipping capacity per capita was high—much higher
than the UK in second place, more than three times higher than Denmark
in third place and more than four times higher than fourth-placed Greece.
In other words, no country had put such a large share of its investments
in ships.2 No country depended as much on shipping.
Table 2.1 provides an overview of the world’s merchant marine and the
seaborne trade volume of the most important participants in the interna-
tional economy in 1900.3 The left side of the table shows the size of the
fleets; the sailing fleet, the steamship fleet and the total tonnage. The
column “effective tonnage” is the best measure of the carrying capacity of
the fleet; here the figures have been adjusted to account for the higher
productivity of steam vessels. Britain clearly dominated the oceans, with
more than half of the steamships and more than 48 per cent of the “effec-
tive” world fleet.
The column “seaborne trade” shows the seaborne exports and imports
of the various countries. Great Britain was in the lead here as well, with a
demand for transport that was higher than the sum of the next two coun-
tries, the United States and France. However, the country’s hegemony
within world trade was on the wane—slightly less than 24 per cent of the
total shipping demand was accounted for by British trade.4
2
See Table 2.1 for sources. There is a theoretical possibility that another country might have had a
higher relative share of its investments in shipping (for instance if total investments were much
lower than in Norway). However, based on what we know about the economic structure of the
countries at the time, the claim that Norway had put the highest share of its investments in ships
is undoubtedly true.
3
Table 2.1: Statistics Norway (1902a), Tables I and K, 168–169. Based on vessels above 50 tons, 31
December 1900. Tonnage figures for Russia refer to 1895, and do not include ports on the Caspian
Sea and the Pacific, while the tonnage figures for Italy refer to 1898. US tonnage figures refer to 30
June 1900. British American seaborne trade refers to Canada, and British Australian to Victoria
and New South Wales. Tonnage per capita refers to estimated tonnage, where one steamship ton is
equal to 3.6 sailing ship tons. For a more precise description of the data behind the shipping move-
ments, which include vessels in ballast, see the original source, Table K.
4
Refers to the countries included in the sample in Table 2.1. In 1874 the British share of the world
fleet had been more or less identical to this, but the share of world trade was higher. On the rela-
tionship between merchant marines and trade, see Ojala and Tenold (2017).
Table 2.1 The world fleet and seaborne trade of leading countries, 1900
Sail tons Steam tons Sum tons Effective Tonnage per Seaborne trade Shipping per
(1000) (1000) (1000) tonnage (1000) 1000 inh. (1000 tons) 1000 inh.
GB and Ireland 1923 7150 9073 27,663 667 98,524 2377
Germany 558 1347 1905 5407 96 30,208 536
USA 1405 938 2343 4782 63 45,312 595
Norway 930 499 1429 2725 1227 6159 2773
France 394 597 991 2543 66 40,097 1039
Italy 483 374 857 1830 56 17,005 547
Spain 91 435 526 1657 91 25,695 1408
Japan 148 330 478 1336 31 7386 168
Sweden 256 257 513 1181 230 14,984 2917
Br. Australia 164 234 398 1006 182 13,889 5390
Denmark 111 245 356 993 405 11,754 4798
The Netherl. 68 252 320 949 186 17,061 3343
Br. America 446 103 549 817 109 14,543 2708
Russia 152 173 325 774 7 14,451 124
Greece 176 165 341 770 298 5622 2176
Austria 14 184 198 676 26 4718 180
Finland 252 46 298 418 154 4058 1496
British Asia 73 92 165 404 1 NA NA
Brazil 77 77 154 354 24 NA NA
Belgium 0 96 96 346 52 14,526 2170
Hungary 10 63 73 237 12 1846 96
Argentina 41 38 79 178 36 14,543 2609
Portugal 56 24 80 142 26 15,341 2826
The Starting Point: A Small Country, but a Major Maritime Nation
Chile 35 28 63 136 41 NA NA
Rumania 4 11 15 45 8 1939 328
Source: Statistics Norway (1902a), Tables I and K, 168–169. See footnote
23
24 S. Tenold
The fact that Great Britain had 48 per cent of the tonnage and 23 per
cent of the seaborne trade movements suggests that Britain’s fleet exceeded
the country’s shipping needs by a factor of more than two. In other words,
more than half the shipping services it produced was “exported” and took
place between other countries. This makes sense when we consider the
manner in which British shipping lines served ports, particularly Empire
ports, all over the world. The only country with a larger surplus of ship-
ping capacity relative to its own trade was Norway, which was 16th of the
countries with regard to the volume of seaborne imports and exports, but
fourth with regard to the size of the fleet.5
To illustrate how the world had been divided into countries that per-
formed shipping services for others, and countries whose trade was trans-
ported on foreign keels, we can consider a hypothetical world where shipping
services were not traded internationally. If the ships only carried the coun-
tries’ own seaborne trade, each Norwegian “ship ton” would transport 2.26
tons of cargo annually, while each British “ship ton” would carry 3.56 tons
of cargo.6 At the other end of the scale we find Portugal where, if the coun-
try’s trade was transported solely on Portuguese ships, each “ship ton” would
have to carry more than 100 tons of commodities on an annual basis.
By 1900 the Portuguese depended upon ships from other nations—for
instance Norway—to carry their cargoes. That year, 187 Norwegian ships
called on Portugal, and only one Portuguese ship came to Norway. Less
than 10 per cent of the Norwegian ships that went to Portuguese ports
came directly from Norway—more than 170 ships were involved in the
trade between Portugal and other countries.7
5
A caveat: the volume of seaborne trade in itself does not determine the need for shipping capacity.
In order to fully find a country’s actual “transport demand,” the distance that the cargoes are trans-
ported must be taken into account as well. Thus, the almost 14 million tons of Australian exports
and imports—much of it going to or coming from Europe and the Americas—led to a higher
demand for tonnage than the around 17 million tons of Italian seaborne trade—much of it trans-
ported in vessels pottering about in the Mediterranean or on short voyages to other European
countries.
6
The “world average” would be 7.4 tons of cargo per ship ton, based on the countries where we
have data for both fleet and shipping. Six countries—in addition to Norway and the UK, Japan,
Germany, Austria and Greece—were below the world average, and can be considered “theoretical
net exporters of shipping services.” Of course, a lot of confounding factors imply that this calcula-
tion is imprecise. However, it can at least give us an indication of the countries that had large fleets
relative to their trade, and vice versa.
7
Statistics Norway (1902b, 54–55 and 25).
The Starting Point: A Small Country, but a Major Maritime Nation 25
The Portuguese example illustrates that maritime hegemony is not per-

manent. The Iberian country that four centuries earlier had become
famous for its first-class explorers, whose exploits were based on superior
technology and outstanding nautical knowledge, had become insignificant
in international shipping by the start of the 20th century. Indeed, four
Norwegian cities—Bergen, Kristiania, Tønsberg and Stavanger—had
larger fleets than Portugal. The Bergen fleet alone was more than four
times larger than the Portuguese merchant marine. The descendants of
Henry the Navigator had clearly lost their course.
The Norwegian ships, on the other hand, were all over the place, serv-
ing the needs of world trade. Although sailing ships had gradually been
squeezed out of most short-distance trades by the more efficient steam
vessels, Norwegian sailing ships remained competitive in certain market
segments; copra from the Pacific, wheat from the Americas, coal from
Australia and guano and nitrates from the western coast of South America.
Here, voyages were long, and there was little reason to pay a premium for
speedy transport of such cargoes, so the sailing ship technology was still
viable. Moreover, ships make money when they are carrying cargo from
A to B, not when they are lying still. In ports with inferior facilities,
where loading and unloading was cumbersome and slow, it made eco-
nomic sense to have an old, cheap sailing vessel lying idle for months,
rather than a modern and expensive steamship.
While some owners had found niches that suited their old sailing
ships, others operated at the diametrically opposite end of the market,
focusing on modern vessels and shorter distances. Bergen-based steam-
ship owners held such a strong position in the US fruit trade that ques-
tions had been asked in the US Congress about the Norwegian
dominance.8 In East and Southeast Asia Norwegian ships found favour
with local customers, as they were seen as less intrusive and threatening
than those of the leading colonial powers, the UK, Germany and
France.9
To illustrate the manner in which the Norwegian fleet was utilized—
where the Norwegian ships were engaged—we can look at two different
8
New York Times, 08061894, 5. Of the 63 ships included in a survey of the fruit trade, 37 were
Norwegian.
9
See Brautaset and Tenold (2010).
26 S. Tenold
Other Europe
Main
Continental
Americas
United Kingdom Other
Asia
Australia
Scandinavian Africa
Fig. 2.1 Norwegian foreign-going shipping 1900, by country and region,

per cent. (Source: Statistics Norway (1902a), Table 55, 73. See footnote)
sources from the start of the century. The first is the official Norwegian
statistics, while the second is the voyage information provided by Lloyd’s
List. The quality of the contemporary Norwegian statistics is considered
particularly high in an international perspective, reflecting the fact that
Anders Nicolai Kiær, the Director of the Central Bureau of Statistics,
since 1869 had been given a “special responsibility” for the compila-
tion, coordination and comparison of international shipping
statistics.10
Norwegian ships had a market share of around two-thirds in the coun-
try’s own imports and exports. The most important competitors were
British ships—carrying slightly more than 10 per cent of Norway’s for-
eign trade—followed by Danish, Swedish, German and Russian/Finnish
ships.11 The home trade—slightly more than 4 million tons—only made
up around one-eighth of the volumes carried by Norwegian ships.12 In
other words, more than 87 per cent of “the production” took place
between foreign ports.13 Figure 2.1 gives an indication of the most impor-
10
See Lie and Roll-Hansen (2001), Bjerkholt and Skoglund (2012, 22–27) and Kiær (1876–1892).
11
Calculated on the basis of Statistics Norway (1902a, 70). Perhaps surprisingly, the share is more
or less identical regardless of whether we include vessels arriving and leaving in ballast.
12
See Fig. 2.1 for details. The figure differs from that in Table 2.1, where ballast movements were
included.
13
Statistics Norway (1902a, 73).
tant markets—though again, it is important to remember that the effect

of sailing distance is not taken into account.
Figure 2.1 shows that around two-thirds of the cargoes that the ships
carried came from or were bound for Europe.14 With more than a quarter
of the entries and exits, the UK was the single biggest market for
Norwegian ships, reflecting the crucial role that the British Empire played
in international trade around the turn of the century. Interestingly,
Norwegian ships transported more cargoes to and from “the Americas”—
North, Central and South America—than to and from Scandinavia.
Revenue-wise, Britain also appeared to be in the lead, with gross freight
earnings of more than NOK73 million, as shown in Fig. 2.2.15 Earnings
from the American market were only marginally smaller, at NOK69 mil-
lion, but were in fact more important. The reason for this is the manner
in which the business was conducted: many of the ships trading on the
Americas operated on time charters, where the Norwegian owners did
not have to pay bunkers and port costs.16 So, when it comes to the amount
14
Figure 2.1: Data refer to total tonnage and are taken from Statistics Norway (1902a), Table 55,
73. The statistics are based on the tonnage of the ships cleared, rather than the weight of the cargo.
While ships in ballast are reported separately, but included in these figures, the statistics are not
adjusted to reflect ships that are not fully laden. There are some missing reports in the data, see
Statistics Norway (1902b), Tables 18–20, 54–81. Given that vessels are registered both on their
ingoing and outgoing voyage, their transported volumes are counted twice, but this has a minimal
impact on relative shares.
The groups include the following categories from the statistics:
Scandinavia: Norway, Sweden and Denmark (including Iceland and the Faroe Islands).
UK: Great Britain and Ireland.
Main Continental: Germany, the Netherlands, Belgium, France, Portugal and Spain.
Other Europe: Russia/ Finland; Italy, Malta and Austria-Hungary; and Turkey, Rumania and
Greece.
The Americas: North America; West Indies, Mexico and Central America; South America.
15
Figure 2.2: Data refer to ingoing and outgoing laden tonnage, excluding vessels in ballast, and are
taken from Statistics Norway (1902a), Table 55, 73. There are some missing reports in the data, see
Statistics Norway (1902b), Tables 18–20, 54–81. Given that vessels and revenues are registered
both for the ingoing and outgoing voyages, transported volumes and gross freight earnings are
double-counted. The category “adjusted gross freight earnings” includes vessels operating on time
charters, and are not included in the data presented in Statistics Norway (1902a), Table 55, 73.
Groups are the same as in Fig. 2.1.
16
Almost 40 per cent of the earnings in the Americas were reported after coal and port costs had
been deducted, compared with less than 10 per cent of the British earnings. In the trades on Japan
and China, practically all of the earnings—more than 99 per cent—have been categorized as
timecharter revenues in the statistics.
28 S. Tenold
3000 80
Ton in
70
2500
Ton out 60
2000
50
Gross freight (right axis)
1500 40
30
1000
20
500
10
0 0
Scand. UK Main Other Eur. Africa Asia Australia Americas
Cont.
Fig. 2.2 Shipping volumes (1000 grt, left axis) and freight revenues (million kro-
ner, right axis) 1900. (Source: Statistics Norway (1902a), Table 55, 73. See
footnote)
of money that was returned to Norwegian sailors and investors, the most
important market at the start of the 20th century was the Americas, par-
ticularly the United States, which was responsible for two-thirds of the
gross freight earnings from that region.
The gross freight earnings do not show profits, as they usually do not
take into account the costs accrued abroad when “producing” the trans-
port service. Operating costs were typically higher for steamships than for
sailing ships, due to their appetite for coal. However, there were substan-
tial variable costs for sailing ships as well—although the wind was free,
sailors had to be paid and fed, and ropes and sails had to be maintained,
and were changed with surprisingly high frequency.
The tonnage data in Fig. 2.2 do not include ships travelling “in bal-
last”—ships that were sailing from one port to another without revenue-
generating cargoes. Differences between ingoing and outgoing volumes
thus reveal the disequilibria in the trade of the various parts of the world.
Continental Europe and Africa, in particular, had much larger volumes
entering than going out, while there was an export surplus, volume-wise,
from Australia and the Americas.
Thanks to A.N. Kiær’s insatiable appetite for shipping statistics, we

also have data that can illustrate the differences between various types of
vessels. Table 2.2 provides a snapshot of the differences in efficiency and
revenue between sailing ships and steamships at this point more or less
midway through the transformation from sail to steam.17
It may seem surprising that the revenue per ton transported was more
than NOK19 for the sailing ships, compared with NOK11 for the steam-
ships. Two factors can explain this. First, we know that sailing ships trans-
ported their cargoes relatively far, which is not captured when a simple
ton measure is used as the basis. Second, the difference in efficiency
between the two ship types shines through; the average steamship trans-
ported more than 10 times as much cargo in a year as the average sailing
ship. Even though the sailing fleet was almost twice as large as the steam-
ship fleet, the latter transported more than three times as much. Gross
freight earnings per ship were more than six times higher for steamships,
and in 1900 each “steamship ton” earned 186 kroner, compared with 55
for each “sailing ship ton.”18
The data above provide information about where the Norwegian ships
were employed and suggest some differences between regions and vessel
types. Although the Norwegian statistics inform us about the countries
that were visited, they only include a single locational marker for each
voyage—either country of departure or country of arrival. In order to
understand both where ships came from and where they were going, as
well as the importance of individual ports, we can turn to the British
periodical Lloyd’s List. With London still very much the centre of world
transport and commerce, Lloyd’s List provided producers, charterers,
traders, brokers and others involved in the shipping industry with news
and information.
17
Table 2.2: Information on number and gross register tonnage (grt) from Statistics Norway, 1901,
Table 35, 51. Based on vessels listed as part of the foreign-going fleet, 31 December 1900.
Information on volumes and revenues from Statistics Norway (1902a), Table 55, 73. To avoid
double counting, volumes and gross freight earnings are estimated as the average of inward and
outward volumes and values.
18
Higher variable costs would offset some of the steamship profits. The differences between esti-
mates per ship and per ton are accounted for by the fact that the steamships in this part of the fleet
were on average 85 per cent larger than the sailing ships: 670 versus 361 tons.
30
S. Tenold
Table 2.2 The Norwegian fleet, transport and revenue, 1900

Grt Volume Transport Ballast Kroner/laden Kroner/fleet Kroner/
No. (1000) (1000 t.) total (%) ton ton ship
Steamships 720 482.2 7877 24,257 35.1 11.4 186.4 124,813
Sailing 2562 923.7 2659 8606 38.2 19.1 54.8 19,773
ships
Sources: Statistics Norway (1901), Table 35, 51 and Statistics Norway (1902a), Table 55, 73. See footnote
Table 2.3 Norwegian ships’ most important port calls and voyages around the
turn of the century
Per cent of Per cent of
Port calls From—to voyages
1 New York 3.8 Cardiff—Vera Cruz 0.4
2 Liverpool 3.3 Cardiff—Pernambuco 0.4
3 Cardiff 3.0 Cardiff—Bahia 0.3
4 London 2.8 Quebec—London 0.3
5 Hamburg 2.1 Laguna—Hamburg 0.3
6 Pensacola 1.9 London—Quebec 0.3
7 Buenos Aires 1.7 Trapani—Stavanger 0.3
8 Quebec 1.6 Hamburg—New York 0.3
9 Savannah 1.5 Pensacola—Buenos Aires 0.3
10 Rio Janeiro 1.3 New York—Stettin 0.2
11 Newport 1.2 Belize—Goole 0.2
12 Philadelphia 1.2 Cardiff—Maranham 0.2
13 Clyde 1.1 New York—Hamburg 0.2
14 Table Bay 1.0 Cadiz—Rio Grande 0.2
15 Marseilles 1.0 Liverpool—Halifax 0.2
Source: Lloyd’s Weekly Shipping Index, various issues, 1882, 1892 and 1902. See
footnote
Ports all over the world were regularly visited by Norwegian ships,
captains and crews, but Table 2.3 illustrates that some were more impor-
tant than others.19 The high concentration of world trade is evident—the
12 most important ports made up more than a quarter of all port calls in
the data from Lloyd’s. But Norwegian ships of course travelled to more
exotic locations as well. In the decades around the turn of the century,
they were registered in at least 1200 different foreign ports, according to
19
Table 2.3: Lloyd’s Weekly Shipping Index, various issues, 1882, 1892 and 1902. Lloyd’s Weekly
Shipping Index compiles listings from the Lloyd’s List daily, and for simplicity, Lloyd’s List is referred
to in the text. Based on a purpose-built database of 9660 voyages by Norwegian vessels in 1882,
1892 and 1902. For each vessel listed in Lloyd’s Weekly Shipping Index, two random voyages—one
in the first half of the year and one in the second—have been selected. See Brautaset and Tenold
(2010, 203–222) for more detailed information about the database. Due to the nature of the mate-
rial included in Lloyd’s Weekly Shipping Index—it records “all mercantile vessels on ocean voyages”,
but with some exceptions—ships trading locally in Europe are likely to be underreported. This
refers primarily to sailing vessels “on voyages from one port to another in the Continent of Europe,
between the White Sea and Cape Finisterre” and “between the UK and ports on the Continent as
far south as Cape Finisterre”, as well as steamships “trading between the UK and ports on the
Continent, between the Scaw and Loire” and “trading between ports on the Continent between the
North Cape and the Loire.”
32 S. Tenold
Lloyd’s List.20 Places such as Nash Creek in New Brunswick, Canada

(population: 150), with a post office, a store and a factory specializing in
the production of doors and doorframes, were clearly a contrast to the
New York or London metropolises.21
The voyages listed above were the most frequent ones for Norwegian
vessels. To some extent, they reveal the Norwegian specialization; trans-
port of bulky cargoes from British coal ports and North American timber
ports. The highways of the seas, where the infrastructure was good, the
traffic density was high and the conditions were usually predictable, were
less important for the Norwegians. Many of these passages were domi-
nated by the large liner conferences, where the mighty British, American
and Continental shipping companies colluded to reserve cargoes and
ensure high freights. The voyage Paspébiac–Llanelly does not have the
same ring as New York–Liverpool, but Norwegian ships could not afford
to discriminate.22 They travelled everywhere—from Aalborg to Zarate;
from Wuhu to Ha Ha Bay.23
This snapshot of Norwegian shipping in 1900 shows a small country
that is clearly “punching above its weight” in the international shipping
industry. In the 1870s Norway had the third largest fleet in the world; by
1900 the country had been relegated to fourth place. But in no other
country had local investors put so much of their resources into ocean-
going ships. How can the strong position that shipping held in Norway,
and the country’s central role in the international shipping market, be
explained?
20
This figure is likely to be underreported. Information from smaller ports was less likely to get to
London and the compilers of the Lloyd’s List in time. Moreover, the publication did not report
extensively about smaller ports on the European continent; see the note to Table 2.3. The economic
historian Jan Tore Klovland, who has meticulously collected information on more than 200,000
voyages from the period 1835–1920, has more than 2400 different ports listed in his material. It is
likely that the majority of these were visited by Norwegian ships.
21
Information on Nash Creek from the Provincial Archives of New Brunswick.
22
And it was a dangerous trip. Captain Hansen’s barque Pons Aelli, the only Norwegian ship regis-
tered between these two ports in 1902, had to be abandoned in the middle of the ocean.
23
Aalborg (Denmark) and Zarate (Argentina) were quite common destinations. However, the data
set contains only one observation each for Wuhu (China) and Ha Ha Bay (Newfoundland).
Why Norway? Geography, History and Culture

At the start of the 20th century, three fundamental features combined to
explain how this small country had managed to become one of the world’s
leading maritime nations; geography, history and culture. The land and
the sea shaped experiences, and experiences influenced values and atti-
tude. The result was Norway, the maritime nation.
The first factor that can explain the Norwegian advantage in interna-
tional shipping is geography. Without resorting to environmental deter-
minism, it is evident that the sea and its firm grip on the coast and its
inhabitants implied that Norway was destined to become a maritime
nation. In fact, the name of the country—the Norðvegr—refers to a pro-
tected sailing route along the coast, it is “the way to the north.” Thus,
whereas the names of other countries usually refer to the territory on land
and the people living there—Francia, Scotland and Denmark—even the
name Norway refers to the sea and to movement.24
The shape of the country implied that the sea was a much more impor-
tant means of communication and transport than the land. The topo-
graphical conditions—the high mountains that separated the fjords and
the modest settlements along the coast—forced Norwegians to take to
water and undoubtedly played a decisive role in the development of mari-
time know-how and their orientation towards the sea. Water provided
the most important means of transport and was a significant source of
supplies. The geography in the coastal areas had created the archetypal
Norwegian sailors—the Vikings. Their ability to build advanced ships,
their navigational skills and seamanship, as well as their outward orienta-
tion—all were features that we can see traces of in Norway in the 19th
and 20th centuries. We see these traces, not due to an unbroken line from
Viking exploits to modern Norwegian shipping, but because the geogra-
phy that promoted and honed these skills remained constant.
During the 20th century, telecommunications, airplanes, cars, trucks
and high-speed trains have revolutionized human interaction. However,
to understand the role of the sea, it is important to remember that these
Skre, Dagfinn (2014, 34–44). This is of course the opposite of nominative determinism; the
24
country got its name because it represented the way to the north.
34 S. Tenold
are new phenomena. Well into the 20th century, water bound people
together, while land separated them. Water transport was the least costly
and most efficient way of carrying cargo and people, and maritime skills
thus became a means for economic and cultural survival in a country
such as Norway. The sea connected markets and districts, while dry
land—mountains, in particular, but also forests—kept communities
apart.
Norway was a relatively large country size-wise—it has the longest
coastline in Europe—but had a fairly limited agricultural resource base
and low population density.25 This encouraged the people to trade with
others in order to get vital supplies; a domestic surplus of fish and wood
was exchanged for necessities such as grain and textiles from Continental
Europe. Much of this trade had been performed by vessels from the
German Hanse and subsequently from the economically and politically
advanced Dutch Republic. By the middle of the 17th century, Bergen
was the only Norwegian city that had been able to build up a substantial
merchant fleet; in 1640 it amounted to 3500 lasts and locally owned
ships transported 40 per cent of the city’s trade.26
The country’s position—in the northern part of the European conti-
nent and cut off from vibrant markets—stimulated trade in general, and
medium-distance trade in particular. The central role played by the sea,
both in local communications and in the harvesting of resources, gave
Norwegians an advantage in seaborne transport. Subsequently, in the
19th century, when markets were opened and international trade
25
At 25,000 kilometres (km), Norway’s coastline is the seventh longest in the world and longer
than the coastlines of for instance the United States, New Zealand and China. According to data
from CIA’s World Factbook it is almost twice as long as that of Greece, which is second in Europe
(not counting Russia and Greenland). Data from the Norwegian Mapping Authority suggest that
the length of the coastline increases to more than 100,000 km when fjords, bays and islands are
included; Statistics Norway (2015, 6).
26
Figenbaum et al. (2009, 7). A læst [last] was an old measure of the size of ships, in Norway usually
measured in terms of barrels of grain (12) or coal (18). However, the “commercelæst” was defined
in the statistics as a weight measure (equal to 5200 pounds) before 1846, and as a volume measure
(equal to 165 cubic feet) after 1846; see Statistics Norway (1948, 238). With the transfer to the
Moorsom measuring system in 1876, a common means of translation was to set one last equal to
around 2.1 net register tons. Almost half of the Norwegian sailings to the Baltic in the period
1575–1654, as registered in the Sound tolls, were by Bergen vessels. Around 1730 the city’s
monopoly in the trade on Greenland and Iceland was transferred to Copenhagen, reducing the
need for tonnage.
increased, this skill became a selling point in itself. Moreover, the fact that
Norway was not a major power actually helped business abroad, securing
market access due to the apparent lack of colonial pretensions.
There is another geographic factor worth noting: Norwegian shipping
was a widely dispersed economic activity. The ownership of vessels
engaged in international trade was not confined to a handful of industri-
ous cities or trading towns, but spread all along the coast. There was the
aforementioned concentration in the southern part of the country, as
fishing was the favoured maritime activity further north. However, in the
south, although sea transport primarily was an urban activity, numerous
small communities along the coast and in the fjords invested in tonnage
and supplied seafarers for the international market.
This wide geographic dispersion of Norwegian shipping declined
slowly. There was clearly a technological and financial element to the
decline—in the first decades of the 20th century the ownership of expen-
sive steam tonnage was primarily a city phenomenon, and showed much
higher concentration than ownership of the more affordable sailing ships.
In 1900 the three leading cities, Bergen, Kristiania and Tønsberg, con-
trolled almost two-thirds of the steamship tonnage, while the three lead-
ing sailing ship ports, Kristiania, Arendal and Stavanger, controlled less
than a quarter of the sail tonnage. Moreover, around 16.5 per cent of the
foreign-going sailing ship fleet was registered in bygder [villages] along the
coast. This was more than twice as high as the corresponding figure for
steamships.27
Geography is intimately intertwined with the second reason for the
strong Norwegian position in the shipping industry; history. The mari-
time dimension put its mark on the lives of the Norwegians: “In the his-
tory of the Norwegian people, the sea provides an eternally fluctuating
course. Our national character and our culture have been determined by
it, just like our political, social and economic life.”28
Within Norway, the legacy as a maritime nation has always been very
visible, even on shore; “in Western Norway [almost everybody] is a sailor.
27
Based on Statistics Norway (1902b), Table 1, 3–9. See also Schreiner (1963, 14–19), for a discus-
sion of the development in the period up until 1914.
28
Egeland (1930, 3).
36 S. Tenold
The hotel porter has an anchor tattooed on both forearms; the taxi-driver
and the waiter talk the uninhibited English that is the lingua franca of the
sea.”29 Statues and memorial plaques have been dedicated to courageous
sailors, while streets, buildings, museums and galleries carry the names of
prominent and generous shipowners.
The shipping industry is more present in Norwegian society than in
practically all other European nations.30 Some shipowners have estab-
lished wealthy foundations that donate money to art and research, while
other foundations target social issues, providing support for seamen’s
widows, their surviving children or sailors “in economic difficulties.”31
Some shipowners are highly visible public figures, while others—ironi-
cally—are famous for their anonymity. Finally, a large number of people
still work in the offices of shipping companies, maritime insurance and
financing companies, in shipping banks, ship brokers and other related
business, or are engaged in a variety of maritime activities. They are part
of the maritime legacy, and continue to be an important economic
reality.
But even history has to start somewhere, at some time. Norway’s rise
as a major maritime nation was a protracted and erratic journey, one that
did not achieve sustained and rapid growth until the second half of the
19th century. After the Dutch lost their dominant position in the trade
on Norway in the middle of the 17th century, a specific pattern devel-
oped with regard to the advance of Norwegian shipping. When the major
European powers—the UK, France, the Netherlands, Spain—were
involved in wars, the Norwegian fleet increased. During periods of peace,
or—even worse—when Denmark-Norway was involved in wars with
their Nordic neighbour, the market share fell.
29
The Norwegian Joint Committee on International Social Policy (1959, 20).
30
Again, the exception would be Greece, where the maritime legacy also has a dominant position,
in particular in Piraeus and on the islands. For a good introduction to the regional and family
dimensions of Greek shipping, see Harlaftis and Theotokas (2004).
31
In the early 1970s, the book Norske sjømannslegater og stiftelser [Norwegian seamen’s endow-
ments and foundations] was around 250 pages long and contained information on more than 400
individual endowments by shipowners, consuls, captains and their wives. Fittingly, the book was
published by a fund established by the Norwegian Shipowner’s Association to honour the memory
of Norwegian sailors during the First World War; see Norges Rederforbunds Sjømannsfond av
1918 (1973).
The first half of the 18th century was a difficult period, and from 1696
to 1745 the size of the Norwegian fleet declined by almost two-thirds.32
Still, seaborne transport at this time was not the specialized activity that
it is today. Rather, shipping was closely linked to local trading houses and
most of the transport was related to Norwegian exports and imports.
Luckily, from a shipping point of view, many of the commodities that
were exported from Norway—forest products, fish and minerals, mainly
copper and iron—were bulky cargoes that needed a lot of cargo space
relative to their value.33
The extent of third-country shipping was limited in the first half of the
18th century. However, shipping activities increased immensely before
Denmark-Norway was drawn into the Napoleonic Wars, with the num-
ber of ships and sailors almost trebling in the two decades after 1776; “the
country’s merchant marine saw a larger expansion within a few years than
it had during a whole century.”34 The basis for the growth was a combina-
tion of political stimulus, high demand abroad—a well-known phenom-
enon also during subsequent wars—and low operating costs.35 According
to a contemporary British source, the lower operating costs were a result
of the fact that Norwegian sailors were “being paid a certain stipend for
the voyage out and home, and not by the month (as is the custom [in
Great Britain]).” The effect of this incentive was clear; it “becomes in the
interest of these foreigners to use every exertion in their power to accom-
plish the voyage in the shortest time possible.”36 Even in the late 18th
century it was not uncommon to blame workers in other countries for
their high productivity…
32
Denmark-Norway re-entered The Great Northern War in 1709. In the period 1710–1713,
Bergen lost 55 ships, almost half of the pre-war fleet, to privateers (who were basically government-
sponsored pirates); see Dyrvik (1979, 107). In order to avoid privateers, ships could take to the sea
when the sailing conditions were bad. This of course increased the probability of wrecking. When
Denmark-Norway was involved in wars, Norwegian ships were sailing between a rock and a hard
place.
33
In the 19th century, another bulky cargo, ice, was added, and in the peak years around 1900
more than a million tons of ice was exported annually. Technological advances onshore—improved
refrigeration and production of plant ice—led to a market meltdown, and the Norwegian ice
exports had more or less dried up by the outbreak of the First World War.
34
Schweigaard (1840, 131).
35
Johansen (1992, 488–489).
36
Quote from merchant’s testimonial to a 1786 Board of Trade inquiry; Johansen (1992, 487).
38 S. Tenold
The majority of the new ships were built in Norway, particularly on

the South Coast.37 Given current controversies in shipping, it is worth
noting that in the first years of the 19th century, some of the vessels on
the Norwegian register were owned by “foreigners, who by means of pro
forma-documents enjoyed the advantage of our country’s neutrality.”38
Thus, according to contemporary sources, Norway appears to have been
an early example of a Flag of Convenience, enticing foreign owners by
providing beneficial conditions. This was not the first time Norway was
used to create a false sense of neutrality, but subsequent research has sug-
gested that though the assertion is correct, the scale of this practice was
limited.39
Again, Norway did well as long as the country stayed away from the
conflict, but when Denmark-Norway was dragged into the war, there was
little consolation in the Norwegian flag. In 1807, following the pre-
emptive British bombardment of Copenhagen and the Danish-Norwegian
entry into the war, more than 550 ships, as much as a third of the fleet,
was lost. The effect on Norwegian shipping was devastating. In the sub-
sequent years, British authorities continued to confiscate Norwegian
ships, and by the end of the war more than 5000 Norwegian sailors had
been put in prison in the UK, some for as long as seven years.40 Although
Norwegian privateering partly balanced the picture, the British might at
sea was too strong.
In the short term, the Danish-Norwegian participation on Napoleon’s
side in the conflict had dreadful effects; famine, un(der)employment,
increasing mortality, economic decline, financial and monetary col-
lapse—“one of the bleakest periods in modern history.”41 In the longer
term, the fact that Denmark was on the losing side, meant Norwegian
freedom.
37
Dyrvik (1979, 177). According to a survey of the pre-war fleet in Den Norske Rigstidende, 1
February 1815, 1 the three main shipbuilding areas were Arendal (174 ships), Bergen (170 ships)
and Øster-Riisøer (Risør, 115 ships).
38
Schweigaard (1840, 183).
39
See for instance Kiær (1893, 333), or more detailed discussions in Thue (1980, 150–151), Tveite
(1965) or Schreiner (1952).
40
See for instance Berit Eide Johnsen’s fascinating book on the cultural exchange that this entailed;
Johnsen (1993).
41
Eitrheim et al. (2016, 84–85).
At end of the war, Norway’s status as a Danish province ended after

almost three centuries.42 Despite the introduction of a Norwegian consti-
tution, the country’s independence was very short-lived. In November
1814 the recently established parliament was forced to accept a union
with Sweden. The attempt at full independence thus ended in futility and
political compromise, and Norway became the “little brother” in a per-
sonal union with Sweden. In addition to the parliament and the constitu-
tion, Norway retained executive and judiciary powers, but the two
countries shared the monarch—from the Swedish house of Bernadotte—
and the foreign policy was conducted by the Swedish Ministry of Foreign
Affairs.
The change in union partner had a positive effect on the Norwegian
foray into world shipping. In terms of international trade, Sweden-
Norway was not a minion. The countries exported large amounts of tim-
ber and wood; one of the most traded, and also most volume-demanding,
commodities. Up until the middle of the 1820s Swedish timber exports
were reserved for Swedish keels. Subsequently, as a result of an extension
of Mellanrikslagen [the Interstate Laws] and the abolition of Produktplakatet
[the Commodity Ordinance aka “The Swedish Navigation Act”],
Norwegian ships were from 1825 allowed to compete on even terms with
local ships in the transport of Swedish cargoes, for instance timber.43
With Swedish protectionism out of the way, the lower-cost Norwegian
vessels became an attractive alternative for Swedish importers and export-
ers. The share of Norwegian ships in Sweden’s trade increased from 4 per
cent in 1819 to 34 per cent in 1849.44
This expansion of Norwegian shipping in the first half of the 19th
century was not based on long-distance trades, but that soon changed. In
a Parliamentary discussion on maritime skills in 1839 it was emphasized
that “it is not common – but rather an exception – that our captains sail
42
The Kalmar Union between Denmark, Sweden and Norway was formed at the end of the 14th
century. Sweden finally withdrew at the start of the 16th century, and Denmark gradually strength-
ened its grip on its Norwegian partner.
43
On the effects of the Navigation Acts in Scandinavia, see Ojala and Räihä (2017). A provisionary
decree that abolished the restrictions was introduced in May 1825 and confirmed by a law in
August 1827.
44
Kiær (1893, 34).
40 S. Tenold
the distant seas.” Consequently, the politicians saw the need for formal
nautical education as limited. The reason was that the ships primarily
operated in the North Sea—“at most extending to the Baltic”—where
“experience to some extent can neutralize the lack of navigational
knowledge.”45 In the second half of the 19th century, this local, northern
European focus became relatively less important. Again, the basis was
primarily political, and again, the political decisions were not made
within Norway.
The aggressive acquisition of market shares in Sweden in the 1830s
and 1840s was a prelude to what happened in the second half of the 19th
century—though by then the backdrop was not just advances at the
expense of a neighbour, but the lifting of restrictions on a global scale.
After 1850 practically the whole world was opened up to Norwegian
shipping, and the competence that Norwegian shipowners and sailors
had built up became much sought after. The liberalization paved the way
for a massive expansion of Norway’s shipping interests.
In June 1849 Queen Victoria signed the Act that repealed the protec-
tionist Navigation Laws, which had limited the participation of foreign
ships in British trade and transport. At this time Great Britain was the
centre of global commerce, and now the country opened its trade to ships
of all nations. For Norwegian shipowners, the prey suddenly got much,
much bigger, and the combination of low costs and high efficiency was a
formula that triumphed in the British market. From 1850 to 1860 the
Norwegian tonnage cleared in British ports increased by 191 per cent,
and only the United States had a larger absolute increase in the transport
of British trade.46 Freed from the limitations of Sweden-Norway’s imports
and exports, and no longer hampered by protectionist measures abroad,
Norwegian shipping flourished.
45
Norway, Parliament, Odelsthinget, 13071839, 679 and 685. The politicians’ powers of prediction
were no better in the 19th century than they are today. Less than 18 months after this discussion,
the first Norwegian vessel rounded Cape Horn. Among the cargoes that the brig Preciosa carried
was aquavit, a traditional Norwegian potato spirit. Even today, aquavit is transported on ships
crossing the equator, where humidity, continuous movement and temperature changes affect the
maturation and the final taste. Preciosa became so famous that the Norwegian poet Henrik
Wergeland wrote a shanty specifically about the ship. See Nordlyset, 05071844, 3 and Blom (1977,
177–180).
46
Glover (1863, 14).
3000
1000 net register tons
2500
1000 compensated tons
2000
1500
1000
500
0
1800
1804
1808
1812
1816
1820
1824
1828
1832
1836
1840
1844
1848
1852
1856
1860
1864
1868
1872
1876
1880
1884
1888
1892
1896
1900
Fig. 2.3 Estimates of the Norwegian fleet, 1800–1900, 1000 net register tons.
(Source: Statistics Norway (1949), Table 126, 241–242. See footnote)
The liberalization of the international market was a necessary condi-

tion for the enormous expansion that took place in the second half of the
19th century. Figure 2.3 shows that the Norwegian fleet growth was char-
acterized by strong fluctuations in the first decades of the 19th century,
followed by a slowly upward-sloping trend from 1830 onwards.47
However, the expansion in the period 1830–1850 was uneven, character-
ized by two steps forward and one step back.48 From the middle of the
47
Figure 2.3: For a good discussion of the problems of estimating the size of the Norwegian fleet in
the 19th century, see Brautaset (2002, 118–128). Due to the considerations presented there, the
data used here should be seen as a minimum, and are based on the following sources 1800–1809
from Dyrvik (1979, 177), 1815–1830 converted from the data in Commerselæster by the factor
2.1 from Kristiansen 1925; 1830–1865 based on Brautaset (2002, 258). Both of these sources have
adjusted the official statistics, but refer to the full fleet, rather than the ships trading abroad; see also
Broch (1876, 81). Data from the period after 1865 are taken from Statistics Norway (1948), Table
126, 241–242; the data on “compensated tonnage” imply that steamships have been multiplied by
a factor of 3.6 to account for their higher efficiency.
48
The data in Brautaset (2002, 261) suggest that the annual export of shipping services declined in
30 per cent of the years in the period 1830–1850, compared with 13.3 per cent in the period
1850–1865. The only years with decline after 1850 were 1857 and 1858, and are thus closely
associated with what Hughes 1956, 194 refers to as “the first world-wide commercial crisis in the
42 S. Tenold
century the development changed dramatically. In the period 1850–1875

the growth was both much stronger and more persistent than before.
The average annual growth rates increased from 0.18 per cent
1800–1830, a period with a see-saw pattern of growth and decline, to
3.85 per cent from 1830 to 1850. In the subsequent 15 years the
Norwegian fleet grew at an astonishing 5.75 per cent annually, before
falling back to 0.44 per cent in the years up to the turn of the century.
The latter stagnation, however, was mitigated by the transformation from
sail to steam. In fact, when we take into account the higher productivity
of the steamships, the fleet continued to increase, with only a handful of
hiccups, until the losses in connection with the First World War.49 In
terms of “compensated tonnage”—a measure of transport capacity that
takes into account the superior efficiency of steam vessels—the average
annual growth was 3.7 per cent from 1865 to 1900. This was a reduction
compared to the previous 15 years, but still a relatively large increase and
far higher than the growth in the economy in general.
After the removal of political restrictions had “opened up” the interna-
tional market in the middle of the 20th century, there was a self-sustaining
element to the Norwegian shipping industry. Regardless of whether we
call this “path dependence” or “tradition,” the fact of the matter is that
Norway’s fleet was very competitive in the international shipping market.
It could offer reliable transport at a reasonable price. This was partly
explained by the conditions at home: Norwegian shipping enterprises
were very competitive in the quest for domestic capital and labour.
In the 1850s, the first decade of this expansive period for Norwegian
shipping, additions to the fleet were to a large extent built domestically.
The industry had access to “the raw materials and the builders needed to
manufacture first-class ships”—particularly on the South Coast.
Moreover, “shipbuilding geniuses such as for instance Annanias Dekke in
Bergen” competed among the leading shipbuilders internationally.50 The
demand for ships outstripped the local supply and, from the 1860s
history of modern capitalism.” For the Norwegian dimension of this crisis, see Eitrheim et al.
(2016, 156–164).
49
Estimates are average annual compound gross rates based on net registered tonnage; for informa-
tion on the data, see Fig. 2.3.
50
Egeland (1930, 31).
200
150
100
50
0
-50
-100
-150
-200
1850s 1860s 1870s 1880s 1890s
Built in Norway Bought from abroad Wrecked and condemned
Sold abroad Net change
Fig. 2.4 Average annual fleet increase and decrease by source, 1851–1900, 1000
net register tons. (Source: Statistics Norway (1968), Table 176, 364–365. See
footnote)
onwards, a larger share of the new ships was imported.51 One reason for
the increasing imports was the fact that the authorities during the 1850s
twice reduced, and then finally removed, the “naturalization levy,” a tax
on ships bought abroad.52 This tax had been to the benefit of shipbuild-
ers, but to the detriment of shipowners.53 The other main reason for the
growth was that shipowners in other countries—in particular the UK—
modernized their fleets by investing in steam tonnage. Consequently, a
large number of relatively inexpensive second-hand sailing ships were for
sale in the international market in the last decades of the 19th century.
Figure 2.4 illustrates the sources of the Norwegian fleet growth.54 The
figure reveals that although more than half of the tonnage added in the
51
Statistics Norway (1968, 364).
52
Hodne (1980, 167).
53
Though, at this time, there was a much larger overlap between these groups than today.
54
Figure 2.4: Statistics Norway (1968), Table 176, 364–365. Net increase and decrease based on
individual columns, which differ from the aggregate figures given in the original source.
Supplemented by information from Statistics Norway 1949, Table 129. The original source points
out that the figures for the early period are “incomplete, due especially to difficulties in securing
exact data as to the great number of vessels not registered.” The “unregistered” vessels are sailing
44 S. Tenold
period 1850–1870 was bought from abroad, there was at the same time
a strong increase in shipbuilding within Norway. The production peaked
in 1875, when more than 264 ships, amounting to around 75,000 net
register tons, were built.55
Fritz Hodne refers to shipping as “the leading sector” in Norwegian
economic development in the period after the Navigation Acts were
repealed. With its impressive growth rates, the shipping industry clearly
outshone other large sectors. According to Hodne’s calculations, shipping
investments amounted to around 30 per cent of total gross investments
in the quarter century after 1850.56 As pointed out above, the main driver
behind the demand increase was found abroad—more than three-
quarters of the growth came from transport between foreign ports, and
was thus totally independent of Norway’s own transport demand.57
Still, conditions within Norway complemented its international devel-
opment, facilitating the rapid growth of the fleet. There are two main
reasons for the attractiveness of shipping employment and investments in
Norway. First, the alternative employment and investment opportunities
were limited. In the 19th century, Norway did not have large exploitable
reserves of coal or other minerals. Moreover, the modest purchasing
power among domestic consumers and the long distance to larger mar-
kets in Europe implied that the conditions for large-scale manufacturing
production were relatively unfavourable. Nascent textile and mechanical
engineering industries notwithstanding, Norway never went through
industrial revolutions of the British or German kind.58
When life expectancy increased in the second half of the 19th century,
migration became an important safety valve that checked population
ships smaller than 50 net register tons and steam and motor vessels smaller than 25 net register
tons. This poses larger problems for the data on the number of ships, than for the tonnage figures,
as the majority of the unregistered ships were small vessels.
55
Based on the number of ships, production peaked in the second half of the 1860s. However, due
to increasing average size, in tonnage terms the first half of the 1870s saw the largest production;
see Fig. 2.4 for information on the statistics.
56
Hodne (1981, 27). Based on slightly different data and methods from what we used above,
Hodne calculates the annual growth rate of the fleet to be 6.8 per cent for the period 1850–1875.
57
Calculated on the basis of ton-miles data in Brautaset (2002), 259.
58
For a good overview of the discussion of Norway’s industrial breakthrough, see Basberg (2006,
4–7).
growth. Around 800,000 Norwegians left for the new world in the period
1830–1920—in percentage terms, only Ireland had a higher outflow of
emigrants.59 The effect on Norwegian wages and living standards was
strongly positive. The existing arable land would not have been able to
sustain the increased numbers and the conditions were not favourable for
a mass exodus into the secondary sector. With few domestic opportuni-
ties, employment at sea was another manner in which the surplus labour
force could be utilized. Sometimes migration and seamanship was com-
bined; Norwegian sailors had “gained such a reputation for ability and
good conduct that they were eagerly sought by American captains.”60
In a discussion of subsidies to shipping in the US Congress, it was
pointed out that “[n]ecessity compels and tradition invites the Norwegians
to become seamen.” According to the Americans, “[Norwegian] capital
and labor naturally turn to the sea, and laws which in the United States
would be restrictive, in Norway are merely the affirmation of local cus-
toms. Thus the law requiring three-fourths of the crews of Norwegian
ships to be Norwegian imposes no restraint on the growth of Norwegian
shipping, while a similar law in the United States would virtually drive all
our ships in foreign trade to foreign flags.”61
The demographic development ensured an ample supply of seamen. A
combination of local resources and institutions facilitated the investment
in ships on which they could sail.62 The early dominance of Norwegian-
built ships was related to the type of organization—partsrederiet [the part
ownership]—where local communities pooled their resources to invest in
ships. The part ownerships were an ingenious way of raising investment
capital for new shipping capacity, even though access to traditional equity
and credit was limited. On the South Coast, “the forest, the wooden ship
and the part ownership” were considered “the God-given foundation for
shipping.”63 However, this organizational form also had its drawbacks, as
it made long-term investment difficult.
59
O’Rourke and Williamson (1999, 122).
60
Gjerset (1933, 63).
61
The original text says “compels.” US Senate, 1922, To amend Merchant marine act of 1920: Joint
hearings before the Committee on Commerce, Washington: Government Printing Office.
62
Before the strong growth of the country’s own fleet, many Norwegian sailors had found employ-
ment on, for instance, Dutch ships;
63
Tønnesen (1951, 80).
46 S. Tenold
In the early expansionary phase, in the 1850s, when the majority of

the vessels were built in Norway, most new ships were constructed as “a
cooperation between the builder, the timber merchant, the captain and
the supplier. Farmers who delivered wood from their forests, craftsmen
and ships chandlers thus participated with a smaller or larger part based
on their deliveries and resources. The out-of-pocket expenses thus became
very limited.”64 Shipping was a potluck business, where the owners con-
tributed, often in kind, with what they had. The legal regime made the
use of ships as collateral impossible. Although it was possible to borrow
money on the basis of individual parts, it was also common to use dwell-
ings, farms or friends and family as guarantee.
The part ownerships were “projects,” where the investment horizon
was the lifetime of the vessel. Profits were paid out at regular intervals or
as and when they occurred—sometimes after every individual voyage.
When the ship was sold, scrapped or lost, any remaining funds were paid
out to the part owners according to their share of the investment. The
project then ended—the business was over. Investors reduced their risks
by diversifying and participating in several vessels, and it was easy to rein-
vest the funds in new ship parts.
A combination of tradition and agreements—within the boundaries of
a very limited legal framework—served to regulate the part ownerships.
According to Sjøloven av 1860 [the Maritime Act] the vessel could only
be insured if all part owners agreed. If the ship was not fully insured—or
not insured at all—it was possible for individual owners to insure their
parts.
In order to avoid costly foreign insurance arrangements, mutual asso-
ciations were established along the coast. From a slow and late start in the
second half of the 1830s, by the middle of the century around three-
quarters of the merchant marine had been insured in mutual associa-
tions—“an astonishing breakthrough” for a type of organization that was
new in a Norwegian setting.65 It has been claimed that the efficient and
low-cost insurance arrangements helped the Norwegian competitive-
ness.66 The high market share remained well into the 1890s, when a larger
64
Seland (1959, 143).
65
Espeli (2010, 49).
66
Espeli (2010).
share of the ships—in particular sailing vessels—began to sail without

hull insurance.
As shipping played such an important role in local communities
along the coast, “surprisingly large parts of the population became
mobilized in the accumulation process.”67 Due to the in-kind nature of
part of the investment, it would not have been possible to raise the
same amount of capital for other purposes. The integration of ship-
ping—and the other main export sectors, fish and forest products—in
the domestic economy, implied that the export-led economic growth
did not lead to an enclave-like structure of the kind seen in many devel-
oping economies, in particular those based on plantation crops and
mining. Rather, the close integration created feedback-loops that
strengthened the economic development. An analysis from the turn of
the century concludes that slightly less than 6 per cent of the Norwegian
population directly or indirectly depended upon shipping for their live-
lihoods, compared with 1.5 per cent in Denmark and 1.3 per cent in
the case of Sweden.68
Shipping’s role as a leading force with regard to employment and
investment reflected the competitive advantages that the Norwegians had
built up in international shipping—advantages that had become
“unshackled” by the repeal of the Navigation Acts. Over the previous
centuries, the Norwegians had developed skills that made them “formi-
dable competitors” in the international shipping market; “The Norwegians
are born shipowners and have developed the shipping industry for its
own sake to a degree that is rare among Continental peoples,” according
to a British observer.69
The typical Norwegian ship in the second half of the 19th century was
“the never-tiring tramp, which continually scours the Seven Seas in search
of charters, loading from one port to another, and never knowing where
she may have to sail for next, picking up cargo here and running light
there, figuring frequently in the overdue list, and sometimes turning up
after she has been posted missing, but always returning to her home port,
67
Bergh et al. (1983, 113).
68
Kiær (1900, 436).
69
Fayle (1933 [2006], 272).
48 S. Tenold
battered and weather-beaten, ready to sail again after an overhaul in dry

dock and the renewal of her certificate of character.”70
Shipping was hard work, and it was risky. In the last part of the 19th
century, as the sailing ships got older, loss rates increased tremendously.
Still, this dangerous, but profitable, activity lay the foundation for the
Norwegian position as a major maritime nation. By the middle of the
19th century, shipping had become a crucial economic activity all along
the coast in the southern part of Norway. Although the sector often had
to share its key role—some places with forestry, other places with fishing
or whaling—it was an integral part of the market economy, providing
employment, investment opportunities and services. By the turn of the
century, Norway had 10 ships for every factory.
Norwegian Maritime Culture

So far, we have looked at the roles of geography and history—two rela-
tively tangible concepts. The final reason that can explain how and why
Norway managed to build up and maintain a dominant position in inter-
national shipping is more difficult to pin down; culture. Sometimes, “cul-
ture” is considered the refuge of the scoundrel; the trump card which
historians and social scientists refer to when they have run out of argu-
ments and facts. However, culture “remains our default term for covering
the relation between forms and social processes.”71 It may be hard to
define, but we usually know what it is…
In our context, the term “culture” contains two important dimensions.
The first is what we can refer to as “maritime culture,” which refers to the
traditions, structures and practices that make Norwegians see themselves
as a sea-going people and the sea as a natural extension of the land. When
an 80-year-old captain explains that he did “his best” at sea, because he
“wanted to assert Norway’s honour as a sea-going nation with traditions
back to the era of the sagas,” that is the maritime culture talking—“the
spirit of the sea.”72
70
An early 20th century presentation of tramp shipping quoted in Harlaftis and Theotokas (2004,
219).
71
Halperin (2012, 133).
72
Worm-Müller (1951, 487).
The second element is “Norwegian culture,” which covers the manner

in which society was organized, including the norms and values that gave
Norwegian shipowners a competitive advantage internationally.
Specifically, in most coastal communities in southern Norway, work on
and investments in ships was an important activity.73 As the legal infra-
structure was limited, the concept of trust, regulated by and integrated in
informal local networks, became important.
The cultural aspect, and here we are mainly talking about the maritime
element, was clearly linked to the geographical and historical founda-
tions. The influence from the surroundings, and in particular the visibil-
ity of shipping, enticed young males to see a career at sea as the
embodiment of the ultimate dream. Norway was the land of the Vikings.
Vikings went to sea. The sea began just outside the window. However, the
culture also changed across time, hence “when the sailing ship era ended,
a distinctive culture died out.”74 The transition to steam changed the life
of most seamen both at sea and in port, but it did not change the percep-
tion of Norway as a maritime nation and Norwegian men as a seafaring
tribe.
The mystery and attraction of the sea is a staple of seamen’s memoirs:
“I had my heart set on going to sea […] my greatest delight was to roam
the waterfront and watch and listen to the sailors at their work in the
ships’ rigging, and their singing, hoisting and bending sails to the yards
and spars, preparatory to the setting out for voyages to far places. Here
was romance, here was life.”75 With a starting point such as this, it is per-
haps not surprising that the boy in question ends up as a captain.
Another sailor rued “the sad day, when the fever of the sea no longer
makes the pulse of the youth beat faster and no longer stirs their longing
for new experiences and new, always new, horizons.”76 Of course, these
73
In an international perspective, the largest Norwegian cities at the start of the 20th century,
Kristiania and Bergen, clearly had small-city features; among the bourgeoise—the merchants and
shipowners—everybody knew everybody. In 1900, the population of Inner London was three
times as large as that of Norway.
74
Tønnesen (1951, 165).
75
Bratrud (1961, 8).
76
Rasmussen (1952, 14); see also 36–40. Adolescents with romantic views of seamanship and the
call of the sea are found, for instance, in Stamsø (1929), or the interview in Tranøy (1941, 41–43).
50 S. Tenold
seamen’s memoirs themselves—with their exoticism and tales of adven-

tures in far-off places—ensnared new generations of sailors. The differ-
ence between domestic docility and adventures abroad was also
emphasized by contemporary observers. “The wider horizon, the richer
and more varied life abroad, the wonders of art and industry – contrasted
with the monotony of life which often prevails in many small communi-
ties on the sea-coast – how all these must attract young lads,” A.N. Kiær
pointed out in his discussion of the “principal causes” behind Norway’s
standing as a maritime nation.77
Many of the seamen’s memoirs tell stories of boys escaping impover-
ished circumstances in Norway, where the food, lodging and modest
wages at sea become a means of survival.78 For others, sea voyages were a
part of the general education. “A custom that was quite common in sea-
faring towns, in particular in Bergen,” was a period at sea, reminiscent of
the apprentices’ Wanderjahre. The bourgeoisie, businessmen and others
that were involved in shipping, sent their “sons – with reassuring supervi-
sion – on a couple of months’ voyage on a cargo ship, fostering maturity
and giving experiences at an impressionable age.” The voyages taught him
(for it was invariably a boy) about “foreign places and peoples […] and
international trade and business.”79
The allure of the sea around the turn of the century, when the sailing
ships were still frequent guests in Norwegian ports, is self-evident. But
“the call of the sea” kept its power well into the second half of the 20th
century. For many of those growing up in the 1950s and 1960s, a period
at sea became an important rite of passage, a gap year activity that marked
the transition to adult life. For many young sailors there was “one com-
mon element: The dream of seeing and experiencing the wide world that
one otherwise had only read or heard about.”80
77
Kiær (1893, 363). Kiær’s reasoning, “How can these young Viking lads but long for the time
when they, too, are permitted to cross the sea into the wide, wide world?”, is almost poetic in its
prose. The fact that the article was published in The Journal of Political Economy, a periodical that
both then and now ranks among the most important in economics, illustrates the drastic transfor-
mation of economics as a branch of science. Today, authors in the journal argue by equation, not
by interpretation; by positivism, not by prose.
78
See for instance Tønnessen (1996), as an example of someone leaving for the sea out of
necessity.
79
Meidell (1968).
80
Pettersen and Brundtland (2002, 72).
For the 19th and the first part of the 20th century, shipping was the
most important lifeline to large parts of the world. Exotic cultures did
not have many inroads into Norwegian society at this time; the country
had a modest military and colonial presence abroad, and mobility was
slow and limited for most people.81 In the days before low-cost plane
tickets, mass tourism and public broadcasting, information about distant
places came primarily via seamen, missionaries, emigrants and a small
number of merchants and adventurers.
The written seamen’s memoirs were but a small part of the transmis-
sion of life at sea and abroad. More important were the gifts that the
sailors brought home and the “taste of the sea” that they gave by means of
stories, tall tales and songs. Shanties (work songs) and other seamen’s
songs were important culture bearers, anchored in the coastal communi-
ties, where young boys heard about Pensacola and Pernambuc—not Paris
or Berlin.82 Onboard the ships, the shanties had a function—they were
used to coordinate the sailors’ work. Ashore, their call-and-response could
create a sense of community, bringing the sea back to the shore and stir-
ring the adventurousness of those at home.
In seafarers’ songs and shanties, sailors are portrayed as a strange com-
bination of carefree and melancholic; without a care in the world, but
longing for home. Strong drink and hard work are among the main
themes, as well as love and loss. Rio de Janeiro, Hamburg, New York, the
East Indies—foreign places filled with young girls whose main desire was
to meet a “Norwegian sailor boy.” The songs themselves reveal the global
character of shipping; the chorus was often “imported”—sung in “a
sailor-English that was almost as international as the melody.”83
The transmission of seamen’s culture through stories and songs was infor-
mal, but the country’s sailors played a more formal role as cultural ambas-
sadors as well. Several Norwegian museums built up their ethnographic
81
This was an era of great contrasts. Many people never left their home town or village, those who
did often went far—to the other side of the world.
82
“Pernambuc’” refers to Pernambuco, in the north-eastern part of Brazil, the 18th most visited
destination in the Lloyd’s List data set with almost 1 per cent of the port calls. The contraction
makes the word rhyme with the Norwegian sukk [sigh], which the sailor emits when he thinks of
Norway. For the full lyrics to “Sing Sally Oh”, a modern version based on Wergeland’s poem about
the Preciosa, see Brochman (1937, 28–32).
83
Brochmann (1937, 39).
52 S. Tenold
collection on the basis of what sailors brought home from abroad; they were
instructed by the museums about which pictures and artefacts that would
be interesting.84 Foreign memorabilia—souvenirs, novelties, mementos and
exotic objects—were common in the homes of sailors and their families.
The sea was the path to the rest of the world; the seamen were the guides.
The “maritime culture” clearly made its mark on Norway. But how did
“Norwegian culture” influence the country’s foray into shipping?
In his analysis of Norwegian culture and society, the anthropologist
Arne Martin Klausen identifies four features that characterize the coun-
try. Two of these, in particular, may have been important for the expan-
sion of the country’s shipping industry. The first is the fact that Norway
can be characterized as a “small-scale society with a large degree of infor-
mal social control.” This was particularly relevant for the many enter-
prises in towns and smaller cities along the coast, where the informal
framework facilitated investment and partnerships. The second charac-
teristic element of the Norwegian culture and society is the fact that the
ideology of equality (egalitarianism) has a particularly strong position.85
The small transparent communities encouraged the dispersed type of
ownership that characterized the Norwegian partsrederier. In the absence
of a clearly-defined legal framework, the strong social control and the
threat of social exclusion created a quasi-institutional legality. The short-
comings of the public legal system were thus neutralized. In this respect,
the experience is not very different from that seen within some fringe
religious movements, such as for instance Quakers. There was an awful
lot of trust and good faith involved in the manner in which shipping
investments were organized and business was conducted.
Joint investments and other interactions had the properties of a
“repeated game”; you could not cheat your fellow shipowners, because
you would have to look them in the eye when you met them in church or
on the street. Moreover, you needed them to trust you with their resources
in the future as well. Of course, not all business ventures followed this
idealized model, but the “trust” aspect of Norwegian culture and society
84
Austbø (2012). Missionaries made up the other significant group of collectors.
85
Klausen (1999, 32–33) also emphasizes the strong Norwegian welfare state and the strong pres-
ence of the periphery in the political system, but these two features are not relevant in a 19th cen-
tury setting.
clearly enabled and encouraged capital formation on a scale that would

otherwise have been unthinkable.
When more modern types of incorporation, for instance limited liabil-
ity companies, replaced the part ownership, the “old” mechanisms con-
tinued to play an important role. As we shall see, this cooperative
spirit—between investors, but also between for instance shipowners,
banks and insurance companies—continued to be relevant into the 20th
century. The joint projects—sometimes with unlimited responsibility—
were beneficial for all parties when the markets were going up and there
was a need to pool resources to remain competitive, but they also meant
that problems spread rapidly when the demand conditions deteriorated.
Trust between partners and other business relations—both before and
after the existence of a more formal legal framework—was a Norwegian
“character trait” that facilitated the country’s shipping investment. Other
results of this trust—for instance the low insurance premia in local asso-
ciations—gave Norwegian owners a cost advantage that improved their
competitiveness. So, the social control seen in the coastal communities,
through its effect on investment and profits, undoubtedly helped build
up Norway, the maritime nation.
The egalitarian nature of Norwegian society may also have boosted the
maritime presence. Throughout the 19th century Norway was a society
characterized by the absence of nobility, and with class differences that in
an international perspective can be considered relatively low. For sure,
Norway was far from an egalitarian paradise where paupers and princes
went hand in hand. However, the fact that there were relatively weak class
distinctions affected the development of a maritime Norway positively.
For instance, the willingness to accept investments from all parts of the
population—without discrimination—enabled capital formation.
“Practically all and sundry were a shipowner [in the 1860s]. Everyone
that had saved some money usually did not give up until they had invested
it in a part of a ship.”86 As ships became larger and more expensive, the
number of parts per ship increased—from 4 or 16 to 64 or 100. After
around 1890 the number of part owners increased, with many “new
names,” including “common people.” Managing owners approached
86
Vigeland (1943, 170).
54 S. Tenold
“friends and enemies, the learned and the unlearned, the tailor and the
shoemaker […] until the sought-after 100/100 parts were safely anchored
in larger and smaller portions of people’s savings, from all of the city and
from all walks of life.”87
The pattern continued into the new century, when the organizational
form gradually shifted from partnerships to limited liability companies.
The shipowner Olav Ditlev-Simonsen, the pater familias of one of the
most successful 20th century “shipping dynasties,” had ordered a steam-
ship; “it was not like now [1945] that the bank or the yard provided first
priority [mortgage]. All of the capital had to be procured at once.” For a
couple of months Ditlev-Simonsen “travelled the country, like a sales
agent for shipping shares.” The shares cost NOK1000 each “and 90 per
cent of the shareholders were small savers who at most could afford one
or a couple of shares each, seldom more than five. They were tailors and
shoemakers, bakers and wheelmakers.”88
This notion that everyone—“the clergyman, the doctor, the district
recorder, and in particular sailors, merchants, craftsmen, even servant
girls”—had invested in shipping, is a generalization that should be modi-
fied.89 Like investments in general, the majority of the funds came from
the wealthiest. Although Olaf Ditlev-Simonsen claims that 90 per cent of
the shareholders were small savers, his own company “signed up for a
large part.”90 Still, there is little doubt about the fact that the shipping
sector was a vehicle for social mobility.
The sailing ships offered careers for hard-working boys; the best and
the brightest could rise in the ranks until they were masters themselves.
Experience and skills were acquired on-board; along the way, if funds
were put aside, the sailor could become investor. Towards the end of his
career, when the experienced captain signed off, he would use his knowl-
edge and take over as corresponding owner for one or more ships.
Naturally, not everyone managed to reach that far—but the possibility
was there. When Ordinary seamen had signed on a couple of times, they
87
Pettersen (1980, 208 and 211).
88
Ditlev-Simonsen (1945, 79–80).
89
Due (1909), quoted in Sandvik (2018, 84).
90
Ditlev-Simonsen (1945, 79).
became Able seamen, and could progress to Boatswains. Third mates

could become Second mates and then First mates. And First mates could
become Captains.
The two largest shipping companies in Bergen in 1890 had been estab-
lished by former captains, and in the subsequent decade a large number
of “captain shipowners” established new businesses, sometimes—but not
always—in cooperation with clerks from existing shipping company
offices.91 When the Norwegian Shipowners’ Association was established
in 1909, the majority of the founding committee were former captains
who had become “managing owners” or sons of captains who had gone
ashore and continued their careers as investors and owners. “The captain
who ventured his savings on his own vessel – that was once the very basis
for the Norwegian merchant marine.”92 And they remembered where
they came from. The previously mentioned Olaf Ditlev-Simonsen, who
went to sea straight after his confirmation and by the outbreak of the
Second World War controlled one of the largest fleets in Norway, called
his autobiography En sjøgutt ser tilbake [A seaboy looks back].93
The main task of the managing owners was not unlike that of the cap-
tains; to navigate profitably and safely in conditions that were unpredict-
able and difficult to influence. During the great expansion of Norwegian
shipping after 1850, the managing owner had often in practice been little
more than the partners’ book-keeper. Many—or most—of the short-
term business decisions were made by a captain who was far away and
difficult to instruct. As communication channels improved, commercial
decisions about cargoes and trades could more easily be made at home.
Former captains could combine their accumulated knowledge of ports
and markets, with “ears on the ground” and information from other pub-
lic and private sources, and then relay their instructions to the ships.
Decision-making power moved from the sea to the home port.
91
Pettersen (1980, 205).
92
Aurmark et al. (1977, 79): the heading of the chapter, which deals with contemporary shipping
in the 1970s, is called “There is still a room for sailors in the shipowning profession.”
93
Ditlev-Simonsen (1945). At the time of his death, the “seaboy’s” group of companies owned 24
ships, amounting to 365,000 dead weight tons, slightly less than 3 per cent of the Norwegian fleet.
Interestingly, his son, Halfdan—one of three sons that managed a shipping company—called his
own autobiography, published 10 years after his father’s, “A shipowner looks back.” Here, he points
out that “The landlubber-shipowners are in earnest entering Norwegian shipping with the genera-
tion to which I belong”; Ditlev-Simonsen (1954, 14).
56 S. Tenold
The First Decade of the New Century

When the 19th century became the 20th, Norway was not a fully inde-
pendent nation; the monarch and the foreign policy were shared with
Sweden. However, during the 19th century a distinct and separate
Norwegian identity had continued to develop; a national-romantic cul-
tural awakening and increasing knowledge and incomes stirred the flame
of independence. The differences between Norway and Sweden—and in
particular their diverging economic and political interests—became more
pronounced. There is no doubt that the Norwegian emergence as a major
maritime nation was an important part of the picture that led to the dis-
solution of the union and Norway’s independence in 1905.
Due to the widespread activities of the country’s shipping industry,
Norwegians had economic interests and engagements all over the world.
The country’s shipowners thrived under the liberal economic trading
regime that emerged in the second half of the 19th century. Sweden, on
the other hand, had traditionally a European—rather than global—focus.
Moreover, the country’s burgeoning manufacturing industry sought pro-
tection, rather than liberalism. Thus, “Norwegians and Swedes were
divided by basic economic and commercial differences.”94
At this time, consuls—the national representatives abroad—were a
crucial element of the mercantile and maritime infrastructure. These con-
suls were appointed by the Swedes, who were in control of the dual king-
doms’ foreign policy. Naturally, they tended to have Swedish interests at
heart. Norwegian politicians—led by the cunning Bergen shipowner
Christian Michelsen, who was appointed Prime Minister in March
1905—consequently demanded separate Norwegian consuls. This con-
troversy—followed by some clever political manoeuvring—led to the dis-
solution of the union and proper Norwegian independence in 1905.
Other things remained the same, however. Around the turn of the
century, wars continued to create periods of exceptional revenues, while
freight rates were depressed and following a long-term declining trend in
more peaceful periods. The Second Boer War (1899–1902) enabled
“every craft to obtain constant work and at highly remunerative freights,”
Leiren (1975, 224).

94
while The Russo-Japanese War (1904–1905) created “an extensive trade

in all merchandise, contraband and legal, with both belligerents, and a
corresponding demand for tonnage.”95 Both conflicts had a favourable
effect on Norwegian shipping revenues. In 1912 and 1913 freight rates
improved again, not as a result of war, but due to a business cycle boom.
The return from tramp shipping “which for several years had been around
5 per cent of the capital” increased to 25 per cent by 1913.96 But the
eternal problem with cycles is that after they have gone up, they are
bound to go down.
Gunnar Knudsen, president of the Norwegian Shipowners’
Association—who was also Prime Minister of Norway—was in a sombre
mood when he opened the annual meeting of the association in early July
1914. Although the two previous years had been good, shipping supply
was increasing faster than demand and the business cycles were not
favourable. According to previous experience, he pointed out, freight
rates would remain at a low level for at least three to four years.97
He was totally wrong.98 Over the next four years, Norwegian shipping
companies would see their most profitable period ever, and Norwegian
sailors one of their most petrifying.
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right holder.
3
The First World War: The Neutral Ally
In the afternoon of Saturday 5 May 1917, the 19-year-old Fredrik

W. Ilboe was feeding the engine of the Bergen-owned steamer DS Nydal
with coal, as part of the black gang. He had 11 silk stockings on his left
foot—luxury goods from the United States were valuable currency in a
depraved Europe, and Fredrik had come across a box full of them. When
the sight of an empty lifeboat a couple of hours earlier had suggested that
there might be German submarines in the area, he had started to put on
the stockings, the better to save them.1
Before Fredrik had managed to put the remaining 11 stockings on his
right foot, there was a muffled bang that reminded him of a powder
charge. Although the first German bombs were way off their target, the
attacks got gradually closer, and Fredrik and his shipmates were told to
abandon ship. He ran back to his quarters, picked up his best suit, the
watch he had been given for his confirmation and a box of letters from
home, before jumping into the lifeboat, where he landed awkwardly on
the captain’s lap.
1
Based on the recollection in Ilboe (1970, 53–62) and the report from the maritime inquiry in
Sjøforklaringer over norske skibes krigsforlis, 1914–1918. B. 2: 1ste halvaar 1917, 496–499. The
U-boat in question was UC-72, under the command of Oberleutnant zur See, Ernst Voigt.

64 S. Tenold
Fredrik’s ship, DS Nydal, had been delivered to the company DS AS

Vestlandet, managed by Frimann & Pedersen, in January 1917. The ship
had a crew of 23 and was on her way from New York to Bordeaux with
general cargo. DS Nydal had the Norwegian red, white and blue painted
on the side of the hull, in order to signal neutrality. However, this was of
little use after the Germans introduced unrestricted submarine warfare
on 1 February 1917.
Four Norwegian ships—DS Nydal and another steamship, as well as
two sailing vessels—were sunk by German forces on this Saturday in May
1917. All the seafarers—42 persons from the two steamships and 47
from the two sailing vessels—survived, but only after enduring arduous
voyages in the lifeboats. Some of the crew from the frigate Asra were the
most unfortunate. After two tough days in the lifeboats, they were taken
on board the Danish ship Hans Broge. However, less than 12 hours after
they had been saved, and before they had managed to reach land, the
Danish ship was attacked. The sailors had to leave a sinking ship again.2
Being sunk twice in the span of 72 hours was not common, but the
First World War undoubtedly took its toll on seafarers, ships and ship-
ping companies. Norwegian neutrality had been challenged even before
the Germans started their unrestricted submarine warfare. Interruption
of Allied supply lines, by means of mines, raiders and the dreaded
U-Boote, was a key element of the German strategy.
As the war progressed, the threats changed. In 1914, during the first
months of the war, the majority of the lost vessels were victims of mines.
The North Sea had quickly been turned into a veritable minefield, with
only narrow corridors from the UK to The Netherlands and Scandinavia
open to traffic.3 In 1915 more than two-thirds of the lost Norwegian
ships were sunk by torpedoes or grenades. The German cruisers were the
main danger, but their efficiency was drastically curtailed by difficulties in
obtaining sufficient coal. In the final years of the war, the dreaded subma-
rines—invisible and deadly—took over.4
2
Brochmann (1928, 114–115) and the report from the maritime inquiry in Sjøforklaringer over
norske skibes krigsforlis, 1914–1918. B. 2: 1ste halvaar 1917, 501–502.
3
For a captain’s account of the difficulties of navigation in such waters—and in wartime in gen-
eral—see Øvreseth (1932), which also includes maps detailing the extent of the mine operation.
4
Petersen (1949, 203–204).
The First World War: The Neutral Ally 65
By the end of the 1914–18 war, around half the Norwegian fleet had
been sunk or had disappeared, and more than 2100 seafarers had lost
their lives. These substantial losses occurred despite the fact that the
Norwegian government on 4 August 1914 declared neutrality. The coun-
try had less than ten years’ experience of managing their own foreign
affairs, and had no interest in the blocs, rivalries and political power play
that had become an increasingly important part of foreign affairs on the
Continent. Norway had perfected a policy of sitting still and hoping not
to be noticed. When the main European powers started fighting, this
stance was futile.
However, even before the outbreak of the war, the isolationist policy
had peculiar effects. In Berlin in April 1908, six countries signed the
North Sea Declaration, which confirmed territorial divisions and sov-
ereign rights in the North Sea. Norway, with the longest coastline to
the sea, was not among the signatories. Instead, the country relied on
its integrity treaty from November 1907, where the main powers had
assured Norwegian independence, territorial integrity and “the bene-
fits of the peace.”5 The Norwegian desire to have its neutrality formally
secured by the agreement, had been lost in negotiation. This “pre-
served Britain’s freedom of manoeuvre in and around Norway in time
of war.”6
The fact that Norwegian neutrality was neither recognized nor guaran-
teed did not matter much. Shortly after the outbreak of the war, it became
evident that the meaning of neutrality had become very flexible in the
European political context. Germany invaded two neutral countries—
Belgium and Luxembourg.7 Subsequently, the Germans initiated all-out
attacks on neutral ships. However, they were not the only ones redefining
and challenging the concept of neutrality. The Allied powers, with the
UK in the lead, “requested the right to regulate the trade of neutral coun-
tries to a degree that was unique in the history of the world.”8
5
Berg (1995, 71–98). The four major powers signing the integrity treaty were France, Germany,
Great Britain and Russia. For the text of the North Sea Declaration, see Scott (1908, 200).
6
Salmon (1993, 32).
7
In fact, Belgium—sharing the Norwegian naivety and referring to its policy of perpetual neutral-
ity—was the only other North Sea country that had not signed the 1908 agreement.
8
Vogt (1938, 57).
66 S. Tenold
Norway, on her side, stretched the limits of what neutral countries

could and should do. The country started out with a modest pro-British
bias, and gradually moved closer and closer to the Allies. This lop-
sidedness can be explained by ideological, economic and security consid-
erations. In 1917 Gunnar Knudsen, Prime Minister and shipowner,
ensured the Americans that “Under no circumstances would we go with
Germany.”9 However, there had been no animosity between Norway and
Germany before the war. In fact, the links between the two countries had
been strong, both at the commercial and at the personal level. Germany
was Norway’s most important trading partner before the war broke out.10
Moreover, Kaiser Wilhelm II had a particularly close relationship to the
Norwegian coast and the Norwegian people, to the extent that the
Norwegian fjords had been his preferred summer vacation destination for
more than 20 years.11
Slightly more than a week before the invasion of Belgium and
Luxembourg, Kaiser Wilhelm II returned prematurely from Balholm in
the Sognefjord, north-east of Bergen, in his yacht Hohenzollern. According
to his memoirs, he had learnt from Norwegian newspapers about the
worsening relationship between Austria and Serbia, but the very same
newspapers report that he received a dépêche when he was taking his
afternoon walk on Saturday 25th July 1914. After reading the telegram,
he abruptly returned to the ship, and left Balholm without warning at
half past six in the evening.12 At the same time, 38 German naval vessels
9
Berg (1995, 255).
10
With regard to Norwegian goods exports, Germany was the second most important country—
the 1913 share of 21 per cent was only toppled by the 24 per cent going to Great Britain and
Ireland. However, almost 30 per cent of Norwegian imports came from Germany—while the
British share was 25 per cent; Statistics Norway (1914, 55). Still, these figures disregard the trade
in services—including shipping—where Great Britain played the key role. The commodity trade
with Germany exceeded the British trade by 6 percentage points. If we include the gross freight
earnings from shipping services, Norway’s trade with Great Britain exceeded the trade with
Germany by approximately 7.5 percentage points.
11
It has been claimed that Wilhelm II had a particular interest not only in Norway, but also in
Norwegians. Based on the belief that their grandfather was the illegitimate son of Der Kaiser, a
family on the west coast in 2012 changed their name to Hohenzollern; Aftenposten, 15 February
2014, 34–37.
12
Bergens Tidende, 260714, 1. This story clashes with the Kaiser’s memoirs, where he emphasizes
that his returned started when he learned “from Norwegian newspapers—not Berlin—about the
[…] Serbian note to Austria”; http://www.firstworldwar.com/source/julycrisis.htm
that were in Norwegian waters were told to mobilize and return to their
homeland.
When Hohenzollern travelled from the Norwegian coast to
Wilhelmshafen in Germany, these waters were relatively safe. Just a few
weeks later, the North Sea had become a strategically important part of
the playing field and a crucial stage for the war theatre. Given the vital
role that supplies and resources play during wars, the British attempt at
isolating the German fleet and cutting off German supply became a
lynchpin of their war campaign.
The Crucial Role of Shipping During Wars

As the US maritime historian Michael Miller has pointed out, the
1914–18 war at sea was not primarily about naval ships fighting for local
and global hegemony and control. Rather, “the real sea battle in the First
World War pitched German surface raiders, mines, and especially subma-
rines against merchant shipping in an effort to interdict and destroy
Allied overseas supply lines.”13 This was not soldiers against soldiers on
land or marines against marines at sea—this was military might against
civilian seafarers.
The outbreak of wars usually leads to an increase in the need for sea-
borne transport. The belligerents need to move troops and supplies.
Moreover, with normal trade relations interrupted, even neutral coun-
tries are forced to rely on more distant sources of supply, and often ships
have to resort to inconvenient lengthy detours.14 As a result, the demand
for transport capacity increases. Parallel with this, the amount of tonnage
available in the open market falls. Ships are requisitioned by the authori-
ties and ship losses increase as a result of enemy action. Bottlenecks,
13
Miller (2017, 1).
14
For instance, rather than sourcing grain from Europe, Norway had to turn to the Americas. In
1913 Norway imported 50 tons of barley from the United States; by 1916 this had increased to
almost 50,000 tons. Over the same period wheat imports from the United States increased from
2400 tons to 74,000 tons; Statistics Norway, Norges Handel 1913, 1914, 97–98 and Norges Handel
1916, 1918, 105. Imports of rye from Russia and Germany had amounted to more than 176,000
tons in 1913—by 1916 the imports were zero.
68 S. Tenold
restrictions and time-consuming inspections in ports reduce the effi-

ciency of the available vessels, and material and labour shortages make it
difficult to keep up newbuilding activity in the shipyards. Shipping is no
different from other markets. Increased demand and reduced supply usu-
ally have one immediate effect: higher prices.
Norwegian shipowners had previously benefitted from the freight rate
booms associated with conflicts in both near and distant waters. This
time, the situation was even more favourable. The strong increase in
international trade in the second half of the 19th century—often referred
to as the first era of globalization—had already laid the foundation for
the growth of the Norwegian merchant marine. However, the expanding
trade also implied that Europe had become much more dependent upon
foreign supplies to meet everyday needs. When the war broke out, Great
Britain imported almost two thirds of the calories that were consumed, as
well as much of the raw materials that kept the country’s industry going;
cotton, wool, petroleum, various ores and rubber.15 Shipping was more
important than ever.
In the autumn of 1914, the German fleet was the second largest in the
world, but British naval superiority rapidly neutralized the majority of
the ships as the Allies took control of the sea lanes; “almost overnight, the
German merchant flag disappeared from the high seas, not to reappear
for more than four years.”16 Around 14 per cent of the world fleet, the
share that the Central Powers held, was forced to remain in domestic and
foreign ports. However, the blockade of Germany and Austria-Hungary
also led to a decline in international trade, and a corresponding reduction
in the demand for shipping.17
For the UK, superiority at sea was one of their main strengths—their
policy had been “rule of thumb”-like: to have a navy that was at least as
strong as the next two navies. The naval ships could be supplemented by
vessels from the world’s largest merchant marine. Relatively soon after the
war had broken out, British merchant ships were put under Government
control, and the authorities also introduced official maximum rates and
15
Miller (2017, 1).
16
Albion and Pope (1968, 233).
17
Schreiner (1963, 89).
standardized contract terms. By the end of 1915, around 30 per cent of

the British fleet had been requisitioned to contribute directly in the war
campaign, transporting soldiers and other personnel, weapons and
ammunition, provisions, etc.
Suddenly, two of Norway’s most important competitors among the
world’s maritime nations were out of the picture. Some optimistic—and
opportunistic—voices suggested that Norway had to take advantage of
the situation. General Consul Storm, Chairman of Den oversjøiske eksport-
forening [The Overseas Exports Association] pointed out that Norway
had an “opportunity to gain market shares in the world market that we
will probably never see again” and should buy as many of the seized
German ships as possible.18
This opportunistic business attitude was echoed in the press, where
Norges Handels og Sjøfartstidende, the leading newspaper for merchants
and shipowners, presented the dilemma as a choice between the “pov-
erty line” [fattigkasselinje] and the “line of action” [handlingens linje].
The latter alternative “would lead to wealth, just as surely as the former
would lead to ruin.” Neutral Norway “should take advantage of the
situation […] and increase our exports. Our ships shall continue to sail
and earn the high freights that are offered. […] Right now, when the
competition is weaker, it is time to assert ourselves, both internally and
externally.”19
The war years did see a spectacular increase in personal wealth in
Norway, though the distribution was uneven. Speculators made rapid
fortunes, and showed their windfall gains in obscene ways. For the major-
ity of the population, however, the increased cost of living and the diffi-
culties of obtaining crucial provisions were the main preoccupations.
From 1914 to 1920, prices multiplied by a factor of three, and rationing
18
The article, originally in Norges Handels og Sjøfartstidende, 090814, was reprinted in full in
Bergens Tidende, 120814, 1 and by 21 August it had also reached the newspaper Nordkap. This
offensive—in both meanings of the word—attitude was typical of the general consul. After the war,
Storm offered his services to the Ministry of Foreign Affairs. When they declined his offer to act as
“Envoyé Extraordinaire and Ministre Plénipotentiairie” in South America, his response was to
publish an 80-page pamphlet about the politicians’ “obstruction” and “tepidity”; Storm (1920).
Based on the tone of this and other of his writings, it is evident that Storm today would have felt
very at home in the comment section of online newspapers.
19
Norges Handels og Sjøfartstidende, reprinted in Tromsø Stiftstidende, 190814, 1.
70 S. Tenold
and black market premiums aggravated the situation. In other words,

Norway managed to follow both the “poverty line” and the “line of
action”. A similar balancing act was seen in international politics. Norway
stayed neutral throughout the conflict, but was in reality strongly
involved, and ultimately played an important role for the outcome of the
war.
Hands Across the North Sea

Cut off from many of their normal sources by the British blockade, the
German appetite for food and raw materials increased markedly.
Norwegian exports to Germany more than doubled from 1914 to 1915,
and in 1916 export revenues amounted to almost 300 million kroner,
more than four times as much as in 1913.20 Part of this was a result of
increasing prices, but even when we correct for inflation, the Norwegian
exports to Germany multiplied by a factor of more than three. Two types
of commodities were particularly important during the first years of the
war; minerals from Norwegian mines—in particular pyrite, copper ore
and iron ore—and fish that could feed a German population on the brink
of starvation.21
However, in 1916 Norway’s westwards-leaning stance became more
pronounced. This was not surprising—the British pressure for support
intensified. Norway’s position as a major cross-trader implied that politi-
cians and shipowners had always tried to avoid challenging the UK, who
through its navy and its network of bunkering stations was the ultimate
maritime power. Britannia really ruled the waves, as guarantor of security,
as energy provider and—most important for Norwegian shipowners—as
market. The UK was still the centre of world trade, and an important
entrepôt. Before the outbreak of the war, the number of Norwegian port
20
21
Germany was the most important recipient of 24 of the 30 different types of fish and shellfish
listed in Norwegian statistics in 1916; Denmark received more lobster, and the UK more salmon.
With regard to canned fish, Germany was the leading importer in all categories, receiving margin-
ally more than 50 per cent of all canned fish exports; Statistics Norway, Norges Handel 1916, 1918,
131–135.
calls in the UK was more than four times higher than the corresponding
number for Germany.22
This bias was not only linked to shipping, but more generally to the
leading British position in the provision of coal and many other crucial
products. As a result, several Norwegian branch organizations entered
into agreements to ensure supply. In August 1915, The Association of
Cotton Factories [Bomuldsvarefabrikkenes forening], fearing that cotton
would be defined as “contraband”, signed an agreement with the British
Government.23 This is one example of how neutral Norway’s allegiance
would become more and more determined by the question of supplies;
“our foreign policy […] became a petty, mercenary, self-serving policy – a
‘trade policy’ in every aspect, practical and materialistic.”24
A similar situation occurred in connection with fish exports. In
1915, foreign buyers of fish were extremely active in Norway, and it has
been suggested that the Germans tried to corner the market.25 The
Norwegian fishing industry was in a difficult situation. Although
Germany and the Continent were the main targets for their exports,
they needed “coal, petroleum, salt, tin, olive oil, hemp and cotton for
ships and fishing gear”, and it was estimated that the British had a mar-
ket share of around 85 per cent in the supply of these goods.26 For
Norwegian fishermen, this was the worst catch of them all; Catch 22.
They were in danger of losing the German market where they sold their
fish, or in danger of losing the British inputs needed to satisfy this
market.
An agreement on the sale of fish to Britain signed in the beginning of
August 1916 was followed by an agreement on the export of copper ore
22
More than 8000 Norwegian ships entered ports in Great Britain and Ireland in 1913, compared
with less than 1800 ships entering German ports; Statistics Norway (1916, 48). The proportion of
third-country trade was also higher for the British than for the German trade. Although Germany,
as previously mentioned, actually supplied a higher share of Norwegian imports, the essential
nature of the British products—in particular coal—gave them an advantage there as well.
23
See Keilhau (1927, 97–104).
24
Vogt (1938, 54).
25
Hjort (1927, 18).
26
Hjort (1927, 14); on the agreement between the UK and Norway regarding the sale of fish, see
Hjort (1927, 9–193).
72 S. Tenold
and pyrite, signed at the end of the month.27 The fish agreement escalated
tensions between Norway and Germany, and the latter responded by tar-
geting shipping along the Norwegian coast. In the last week of September,
ten Norwegian ships were sunk in the Arctic Ocean, and the ruthless man-
ner in which the German submarines acted created a public outcry.28
With regard to the merchant marine, two considerations had to be
taken into account. On the one hand, transporting cargoes for other
countries had been its main employment, and was an important source
of revenue. On the other hand, the ships played a crucial role in ensuring
that Norway had fuel, food and other necessities. The transport to and
from Norway thus became particularly important during the war, and
the shipowners found that the authorities increasingly restricted their
room to manoeuvre.
In December 1915 the government had introduced a provisional
decree banning the sale of ships abroad, and this restriction was made
into law in July 1916.29 However, the export ban was largely unnecessary.
Norwegian shipping investors were in a buying—not in a selling—mood.
In both 1915 and 1916 the imports of second-hand tonnage were three
times higher than they had been in the years just before the war, and from
the autumn of 1915 Norwegian owners “occupied practically all the
capacity on shipyards in countries that were still neutral, primarily
Norway, Denmark, the Netherlands and the United States.”30 By the end
of 1916, Norwegian newbuilding orders at US shipyards amounted to
around 90 per cent of the country’s annual production capacity.31
The Norwegian fleet reached a peak in August 1916, before the
increased German aggression began to fully take its toll. More than
300,000 deadweight tons were lost in the last four months of 1916,
27
As a result of the British dependence on imported foodstuffs, the entire exports of meat from
Australia and New Zealand, and most of the Argentinian exports, had been bought up by the
Board of Trade.
28
As early as in November 1915 Sweden had denied submarines use of its territorial waters, except
in a surface position in times of distress. A similar Norwegian resolution came 11 months later, and
had only one exception from the total ban—submarines could enter Norwegian waters to save
human lives.
29
Keilhau (1927, 186).
30
Haaland (1940, 18).
31
compared with around 265,000 deadweight tons in the first two years of
the war.32 The combination of a more violent German policy and a strong
increase in the submarine fleet—which more than doubled during
1916—can explain the higher losses.
The UK had by far the largest merchant marine at the start of the war,
but had similar preoccupations as the Norwegians; at home, people and
machines needed foreign inputs to be able to keep going. The authorities
introduced a plethora of regulations, including compulsory voyage per-
missions, maximum freights and requisitioning, but even that was insuf-
ficient to cover their transport needs. They consequently cast their eyes
on the neutral fleets, and had the means to persuade them: foreign steam
shipping depended on British coal. By restricting access to this vital fac-
tor of production, British authorities could influence the manner in
which the vessels were paid and used. In the first half of 1916 they intro-
duced maximum freights for foreign ships on certain routes, and refused
to deliver coal to neutral ships unless they had secured a return cargo that
would bring them back to the UK.33
For a while, the cooperation with the British was organized along the
“one in—one out” principle followed by nightclub bouncers on a busy
Saturday night. Norwegian vessels that were ready to sail to Scandinavia
or The Netherlands with coal cargoes were not allowed to leave until they
were replaced by another Norwegian ship.34 These restrictions were
relaxed when it turned out that the Norwegians reacted differently to
owners from other neutral nations; “the dauntless Norwegians stuck to
the dangerous work, but most others dared not risk their ships.”35
A dispute about Norwegian exports of low quality pyrite to Germany
led to a cessation of British coal exports to Norway from the end of 1916.
However, “it was evident that the dependence of Norway on British coal”
and the Norwegian shipowners’ large fleet made them “genuinely anxious
to employ their vessels in the service of the Allies,” with whom they were
already “on friendly terms.”36 In February 1917, shortly after the Germans
32
Schreiner (1963, 134 and 304); refers to ships lost as a result of war hostilities.
33
Hodne (1981, 448–449) and Klovland (2017, 10–12).
34
35
Schreiner (1963, 166) and Albion and Pope (1968, 241).
36
Fayle (1923b, 47).
74 S. Tenold
introduced unrestricted submarine warfare, the Norwegian authorities

accepted the demands, and the British stopped twisting the Norwegian
arms.
Around the same time, the British Minister of Blockade, Lord Robert
Cecil, approached the Norwegian authorities with the view of purchasing
tonnage.37 The basis for the approach was that “Norway had a greater
amount of tramp tonnage to place on the freight markets than any other
country except Great Britain herself.”38 The German escalation of the
naval warfare—with a large number of much more efficient subma-
rines—implied that the Norwegian fleet had become increasingly valu-
able. This paved the way for the tonnage agreement with the UK,
negotiated in the spring and entering into force in the summer of 1917.
The tonnage agreement was a strange beast; it was negotiated by the
Norwegian Shipowners’ Association and the British legation in Oslo, but
with both countries’ authorities—the British Government and the
Norwegian Provianteringsdirektoratet [Ministry of Provisioning]—loom-
ing insistently in the background.39 The idea was that “all Norwegian
shipping not required for the trade of Norway herself should, so far as
possible, be employed in Allied interests, in return for a guarantee of the
Norwegian coal supply.”40 As a result of this agreement, neutral Norway
devoted its most important asset—the merchant marine—clearly to one
side in the conflict. By this time, there was no doubt about where
Norwegian allegiance lay.
According to the agreement, a substantial share of the Norwegian fleet
was time chartered through Furness Withy & Co., as agents for the
British authorities. Moreover, in the dangerous North Sea trade,
Norwegian ships—which due to neutrality could not be armed—were
replaced by British vessels.41 Consequently, coal to Norway was “carried
37
The fact that the British had their own Minister of Blockade illustrates the crucial role of this
aspect of the war. Ironically, the Rt Hon Lord Robert Gascoyne-Cecil, First Viscount Cecil of
Chelwood, CH, PC, QC, was in reality a keen supporter of free trade, and in 1937 won the Nobel
Peace Prize for his work with the League of Nations.
38
Fayle (1923a, 274).
39
The nature of the agreement implies that there was no signed contract. Instead, the previous cor-
respondence was used as the basis for the arrangement; Schreiner (1963, 176–177).
40
Fayle (1923b, 48).
41
Norges Rederforbund (1960, 17).
by armed British ships, among whom losses were likely to be smaller”

while “the Norwegian steamers should be available for Allied service
elsewhere.”42 The red-white-and-blue on the ships’ side, which had previ-
ously functioned well when neutrality was an advantage, had to be sub-
stituted by war paint and camouflage, because it would otherwise signal
to the submarines that the ship was unarmed.43
In late 1917, around 900,000 dead weight tons of Norwegian ship-
ping, in addition to the requisitioned ships, served the Allies on time
charters to the Executive, or on a trip-by-trip basis in the coal and ore
trades. However, the important thing was not only the number of ships,
but also the willingness to engage them in the most dangerous waters. A
survey from January 1918 shows that 547,000 gross tons of Norwegian
ships were performing Allied service in the war zone, compared with a
total of 141,000 tons of Dutch, Swedish and Danish ships. The differ-
ence is remarkable: although Norway only owned slightly more than a
third of the “neutral” Dutch-Scandinavian fleet, they had almost 80 per
cent of the crucial tonnage servicing the war zone.44
Norway’s novel definition of neutrality was exemplary from a British
point of view: “In striking contrast to the friction which had arisen with
so many neutrals, British relations with Norway were on a friendly
footing.”45 When the United States entered the war in April 1917, the
pressure on Norway intensified. The Americans demanded a complete
termination of Norwegian exports to Germany, in order to secure food
supply to Norway. While the Americans and the Norwegians played dip-
lomatic ping pong, daily life became characterized by rationing, inflation
and civil unrest. The famous explorer and scientist Fridtjof Nansen repre-
sented Norway in the discussions with the United States.46 Initially, he
suggested limiting food exports from Norway to Germany to 40,000
tons of fish and fish products, but only when Norway introduced bans
42
Fayle (1923b, 218).
43
Kloster (1935, 76).
44
Estimated on the basis of Fayle (1923b, 261); ships in national trade with the UK are excluded.
45
Fayle (1923b, 47); see also Hurd (1924, Vol. II, 244).
46
Among the tasks he faced, was securing supplies to Roald Amundsen’s expedition through the
North East Passage, which led to “large and totally unexpected difficulties”; letter dated 040118;
https://urn.nb.no/URN:NBN:no-nb_digimanus_17502
76 S. Tenold
and restrictions on the exports of minerals and other military articles to

the Central Powers was it possible to conclude a Norwegian-American
agreement. The agreement, with severe limits on Norwegian exports to
Germany, came into force in May 1918, after nine months of negotia-
tions. Norway had truly become “the neutral ally.”47
One of the main reasons for Norway’s westward stance was the deterio-
rating view of Germany in public opinion, which made it easier for the
authorities to align their policies with the Allies. The manner in which
submarine warfare destroyed human lives and merchant ships—neutral
lives and neutral ships—changed public opinion and inflamed anti-
German sentiments. For the majority of Norwegian citizens, Germany
and the Central Powers became “the enemy” during the course of the war.
Domestic incidents contributed to the changing attitude. In Bergen,
Den store spionsaken [The great espionage affair] caused public outrage in
the spring of 1917. Members of a spy ring had sold information about
Norwegian ship departures to the Germans, betraying their compatri-
ots.48 The court case led to riots and demonstrations outside the court-
house, where the accused were harassed by a large mob.49 In Kristiania,
in an unprecedented break of diplomatic courtesy, the German diplo-
mat and spy “Baron von Rautenfels”—actually the Finnish-born civil
servant Walter Harald von Gerich—was arrested in June 1917. He had
more than 200 bombs in his possession, some hidden in trunks that had
been sealed by Auswärtiges Amt, Berlin [The Foreign Office, Berlin].
Among the explosives, which totalled almost a ton, were nine bombs
concealed as lumps of coal, to be hidden in the bunkers depots of ships.
Norwegian newspapers linked the case to previous “suspicious accidents
at sea.”50
47
Berg (1995, 228–244); in the end, the fish exports were capped at 48,000 tons. The term “the
neutral ally” is linked to Riste (1965).
48
Four of the 14 spies that were arrested worked for Det Bergenske Dampskipsselskap, Bergen’s lead-
ing shipping company. Due to the company’s relatively limited losses at sea, the British authorities
insinuated that “the owners may not have been completely ignorant of the malpractices”; see
Keilhau (1951, 331–334).
49
Bergens Tidende, 301117, 5 and 7–9. In addition to animosity against the accused, the basis for
the “riots” was the relatively low number of police officers controlling the long queue of curious
onlookers.
50
Dagbladet, 230617, 1; Søhr (1938, 76) and Hambro (1958, 168–185).
The accomplices of “the bomber baron” were given relatively long jail
sentences in Norway. “Baron von Rautenfels” himself was expelled from
the country, but was given an amnesty in Germany and escaped prosecu-
tion.51 This is characteristic of the international political situation during
the war: the Norwegians pretended that they were neutral, and the
Germans pretended that they respected the neutrality.52 During the First
World War, political, economic, strategic and military considerations
overlapped and clashed, creating uncertainty and complexity for indi-
viduals and for businesses.
War Risk and War Losses

Wars greatly increase the risk associated with shipping, and risk is some-
times difficult to deal with from a commercial perspective. Some weeks
after the start of the war, Norwegian shipping companies, in cooperation
with the government, established a compulsory and mutual war insur-
ance arrangement.53 This was an important step—crippling insurance
premiums and lack of access to war insurance immobilized the fleet.
Norwegian ships were already in or on their way to the lay-up buoys.
Insurance premiums of 25–30 per cent of the value of the vessel had been
quoted for some voyages across the North Sea, and the reduced shipping
activity threatened both Norwegian imports of necessities and the freight
revenues that financed them.54
In the UK, Denmark and Sweden the authorities had established
insurance arrangements, but the value of the Norwegian merchant
marine, relatively to the size of the public coffers, made such a solution
difficult in Norway. Moreover, it was claimed that “Norwegian shipown-
ers were known for chartering their ships on risky voyages, almost like a
predilection, if the profits encouraged it”—not a strategy that will
51
Søhr (1938, 72–98).
52
The German Embassy had been invited to the opening of the sealed trunks, but did not turn up.
When it was proven that they had broken the diplomatic rulebook, an obscure military agency was
blamed.
53
Nilsen & Thowsen (1990, 10).
54
Petersen (1949, 177).
78 S. Tenold
convince insurers.55 Regardless of whether or not this claim was correct,

if this was the general opinion, it would negatively affect shipowners’
ability to obtain affordable insurance terms.
A committee was established on 11 August 1914, headed by Joh.
Ludwig Mowinckel, Bergen shipowner and President of the Odelsting,
one of the Parliamentary chambers. The committee worked rapidly, and
the day after it had been appointed suggested the establishment of a com-
pulsory and mutual insurance arrangement, where the authorities granted
a temporary guarantee. Consequently, the costs of every individual loss
would be shared by everyone. This solution was supported by both the
politicians, who wanted to limit their own risk, and the shipowners, who
wanted to limit the authorities’ influence.
The increasing insurance costs were warranted. Neutral Norway suf-
fered heavily during the First World War. More than 2100 seafarers lost
their lives. Almost 950 ships, with a tonnage of more than 1.3 million
gross register tons (grt)—corresponding to around half the 1914 fleet—
were lost.56 Given that they were sailing for a neutral nation, the
Norwegian ships were unable to retaliate when they were attacked.
Figure 3.1 shows the official Norwegian loss figures during the war.
With the introduction of unrestricted submarine warfare in February
1917, and subsequently with the US entry into the war, developments
changed dramatically. The new German policy—targeting all ships
around the British Isles, outside France and Italy and in the Eastern
Mediterranean—implied that the target became the ships, not their car-
goes. The introduction of convoys in the North Atlantic in the spring of
1917 managed to drastically reduce the losses in that region, and the
decline was strengthened by the deployment of Norwegian ships to less-
dangerous waters after the tonnage agreement.
55
Keilhau (1927, 32).
56
See Fig. 3.1, which is based on Statistics Norway (2000), Table 115, 115 and Statistics Norway
(1948), Table 131a, 248. In addition to the data presented there, 943 seafarers and 69 ships with
an aggregate tonnage of slightly more than 60,000 gross tons disappeared during the war, most
likely as a result of mines or torpedoes; Statistics Norway (1919, 63). While these vessels are men-
tioned in the footnotes of subsequent statistics, the seafarers have disappeared there as well.
Moreover, one sailing ship and three other ships sunk by mines in 1919, which left 24 sailors dead,
are not included in the data. Figures for 1914 refer to the period after 1 August, while 1918 refers
to the full year.
800
1914 1915
700
1916 1917
600
1918
500
400
300
200
100
0
Seafarers killed Steam and diesel tonnage Sail tonnage
Fig. 3.1 Norwegian losses during the First World War by year, 1914–1918, seafar-
ers and 1000 grt. (Sources: Statistics Norway (1948, 2000). See footnote)
The acceleration of the German war at sea is evident from the statis-
tics—as is the efficiency of the convoys at the later stages of the war.
Regardless of the high losses, “posts at ships that were sailing in the dan-
ger zone were always in high demand,” according to the economist
Wilhelm Keilhau. With a lack of reality orientation that can often be
found behind a large oak desk, he claimed that “For many [seamen] the
spirit of adventure must have played an important role.”57
The loss of a ship was not necessarily bad for the company’s business.
In the summer of 1917 it was claimed that a share in DS AS Vestlandet,
the company that owned the recently torpedoed Nydal, was “a good
paper,” partly as a result of the income associated with the sinking.58
The ship’s insurance had amounted to more than NOK2.1 million, and
the company had a book profit of NOK1.4 million as a result of the
57
Keilhau (1927, 319–320). Wilhelm Christian Keilhau was Professor of Economics at the
University of Oslo. He gradually reoriented his writings towards economic and business history,
and his prolific authorship includes several books that were written because he had an axe to grind.
Keilhau’s uncle had been Minister of Defense in Norway in 1914, but was replaced two days after
the country had declared its neutrality.
58
Bergens Tidende, 260917, 7. A misprinted telegram about a torpedoed ship plays a central role in
the Norwegian rags-to-riches “yuppie comedy classic” Bør Børson jr.; Falkberget (1920, 182–188).
80 S. Tenold
insurance payout after the Germans had sunk the ship.59 While such
profits were subject to income tax and war gains tax in the first years of
the war, from July 1917 insurance profits became tax exempt if they
were reinvested in new shipping capacity.
For the seafarers on board the ships, the case was of course different.
They received a hazard bonus as a result of the war, and half a month’s
extra pay if the ship was captured or sunk by the Germans.60 This sounds
ruthless, but was in fact not too bad: Danish and British seafarers actually
had their wages stopped from the moment the ship was sunk. There was
also compensation for personal belongings, and here we see the class sys-
tem at play: captains were given 1000 kroner, mates were given 600 kro-
ner and compensation for the rest of the crew was 400 kroner to cover
clothes and other personal items that were lost.61
Jobbetid: The Financial Boom

While the seafarers were counting their blessings, speculators were count-
ing their money. The war led to an enormous increase in freight rates, and
in revenues. In 1916, gross freight earnings—what foreigners paid for
Norwegian transport services—were more than four times higher than
they had been five years earlier, even when we take inflation into account.
This massive inflow of money fostered optimism—shipowners reinvested
their earnings, and shipping investments became attractive even to those
outside the sector.
The war led to an enormous “investment” activity, where some ship-
ping company shares doubled in value, then doubled again, and where
the volume of transactions bordered on the ludicrous. High risk led to
high potential profits: “Yesterday I bought a Tønsberg-boat at eleven in
the morning for three and a half million, and sold it again at one o’clock
for four,” boasts one of the shipowners in Nordahl Grieg’s classic play Vår
59
Bergens Tidende, 180418, 5.
60
Pedersen (1952, 170). In April 1918 this was increased to three months. Some shipowners were
more generous than others; Fred. Olsen offered torpedoed sailors wages for the rest of the year, even
if their ship had been sunk in January.
61
Tønnessen (1960, 116).
ære og vår makt.62 The freight rate boom led to “an almost insatiable appe-
tite for shipping shares and ship parts.”63
Still, economic success was primarily a question of good or fortunate
timing. “The shipowners that had bought ships in the first half of 1914
[…] were winners in life’s peculiar lottery” and for the first years of the
war values increased steadily.64 During 1915 the price of a relatively large
ship multiplied by a factor of five, and the second-hand price exceeded
the newbuilding price for a similar vessel by 80 per cent due to its prompt
availability.65 The price of the shares of shipping companies that owned
such tonnage naturally soared.
From the end of 1914 to the peak in 1918 the value of shipping shares
multiplied by a factor of almost six. Because freight rates showed particu-
larly pronounced boom movements, shipping shares became the favoured
speculative object among those looking for a quick boost of their per-
sonal wealth. There was a real economic fundament for the boom in the
beginning; the high freight rates led to record profits—even after the
increases in coal prices, wages and insurance costs were taken into
account. However, as the war progressed, the development acquired all
the properties of a “bubble.” Investors ventured their money based on the
expectation of continuing share price increases, rather than on the basis
of future revenues.
The important factor was not the company’s revenue stream, but the
ability to sell the shares at a higher price at a later stage. The aim was to
find an even greater fool in a game of musical chairs. Norway “had never
seen a gold fever like that, and probably not a similarly vulgar and pro-
vocative exhibition of money.”66 Figure 3.2 illustrates how the shipping
industry, more than other sectors, was affected by the boom and bust
during the war.67
62
Grieg (1935, 84).
63
Thowsen (1983, 199).
64
Keilhau (1927, 10).
65
Kloster (1935, 40). In one case, the sale price of a ship increased by more than 300 per cent from
May to December; Kloster (1935, 41).
66
Egeland (1963, 9).
67
Figure 3.2: Based on Keilhau (1927, 344–346). Data refer to end of month. The total index
consists of the following indices (weighting in parentheses): Manufacturing (1/3); Shipping (1/3);
Banking (1/6); Insurance (1/15); Whaling (1/15); Transport, etc. (1/30).
82 S. Tenold
700
Shipping
600
Manufacturing
500
Total index
400
300
200
100
0
1914-1
1914-7
1915-1
1915-7
1916-1
1916-7
1917-1
1917-7
1918-1
1918-7
1919-1
1919-7
1920-1
1920-7
1921-1
1921-7
Fig. 3.2 The shipping speculation boom, stock exchange indices (1913 = 100),
1914–1921
From a societal point of view, the development was unfortunate. The

war, inflation and rationing accentuated the difference between the haves
and the have-nots. Shipping investors undoubtedly belonged to the first
group. In 1917 inequality in Norway was at its highest point in modern
history.68 Quite a lot of people became wealthy from speculation, but
most major maritime cities typically had one or two entrepreneurs that
stood out. This development was most pronounced in Kristiania and
Bergen, where we find the most liquid stock exchanges.
In 1915 the shipbroker Christoffer Hannevig jr. in Kristiania invited
investors to buy four old sailing ships that would be fitted with engines,
and promised that one voyage would give a return of “more than 50 per
cent of the purchase price.”69 At this point Hannevig was an outsider—
and even frowned upon by established shipowners—but he still became
the archetypal example of the new-found wealth during this early yuppie
period.70 By 1917 his fortune was allegedly NOK150 million—around
68
Aaberge et al. (2016, 22).
69
See the advertisement in Morgenbladet, 140215, 11.
70
The Norwegian term for the period is jobbetid, referring to the jobbing of stocks—short-term
investments looking for rapid profits, often associated with the British South Sea Bubble in the
18th century.
NOK5 billion in today’s money: “Every child in Norway knows

Hannevig. He has already become a mythical character, a Norwegian ver-
sion of King Midas or brewer Jacobsen, a young Alladin or a new, shining
Askeladd. Even before he started to splash millions about, it was estab-
lished that he was the incarnation of the wonderful fairy-tale called
Norwegian shipping during the World War.”71
Hannevig owned shipyards in the United States and a bank with offices
in Old Broad Street in London, in New York and in Aasgaardstrand—a
Norwegian village of around 300 souls: “incredible fortunes have been
made in a couple of years; shipowners have had to establish their own
banks in order to accommodate the money.”72 In 1921 Hannevig, who
by then was in his late thirties, and several of his companies went bank-
rupt. He subsequently spent a lot of energy on litigation against the US
authorities, claiming compensation for yards that had been confiscated
when the United States entered the war. The First World War’s Norwegian
King Midas died broke in New York in 1950.73
Tryggve Sagen, one of Hannevig’s partners, is another rags-to-riches−
to-rags story in Kristiania, while in Bergen the boom was associated with
Erik Grant Lea.74 He was a serial entrepreneur, who was also the victim
of comparisons with King Midas and Aladdin.75 Like many “jobbers,”
Lea had managed to get a large share of outside capital in his companies;
in the first one he owned only 16 of the 750 shares.76 This made him
vulnerable for shareholder revolts, and in 1917 six of his companies were
taken over by another “typical speculative partnership”—a dog-eat-dog
world. The new managers were Bjørnstad and Brækhus, who also took
71
Dagbladet, 281017, 6. King Midas should be well-known, and “Alladin” is a mis-spelt “Aladdin.”
“Brewer Jacobsen” refers to Carl Jacobsen, founder of the Danish brewery Carlsberg and regarded
as one of the most successful businessmen in Scandinavia. Askeladden is one of the main characters
in Norwegian folk tales, typically succeeding where others fail.
72
Dagbladet, 030319, 4.
73
Hannevig died, but the court cases lived on. In March 1960, the Norwegian Parliament discussed
the aftermath of the case for the ninth time, as a response to a decision in the US Court of Claims
the previous year; Norway, Parliament, Stortingsmelding 60 (1959–1960).
74
On Sagen, see Haugstad (2017).
75
See Tveit (1972) for a biography of Lea and reference to the comparison, and Imset (2009) on
Hannevig.
76
Thowsen (1983, 204).
84 S. Tenold
over DS AS Vestlandet, to benefit from the insurance payout after Nydal

had been torpedoed.77 In the period 1917–1920 Bjørnstad and Brækhus
“raided” 15 different companies to gain control of valuable tonnage.
Ships and ship shares changed hands at high frequency—and usually
at higher and higher prices. Before the war there had been eight stockbro-
kers in Kristiania—during the war the number grew to several hundred,
and informal transactions took place in restaurants and cafes. The boom
and bust in the equity market cast long shadows. Several decades after the
war, the image of the stock exchange was negative to many people, linked
with speculation, unrestrained risk-taking, uninhibited spending and a
gambling mentality that was alien to Norwegian values. Moreover, ship-
ping was seen as the archetypal gambling activity; “old, peaceful Kristiania
[had] succumbed to a deluge of papers, of shares, of warrants and of
contract notes.”78
The speculative fever was fuelled by an abundance of money so large
that even crooks from abroad were attracted to it. The Australian Mister
Angus, who promoted the idea of a self-stopping locomotive, left the
country after having deprived investors of their funds. “There were invi-
tations to subscribe [to new shares] that even the most ignorant must
have understood were meaningless.”79 In the absence of good investment
objects, the wealthy—and in particular the newly wealthy—chose risky
investments and conspicuous consumption.
The abundance of money among the successful speculators was partly
channelled into new investments, fanning the flames of the boom. Still,
there were also funds for other purposes. The phenomenal profits were
channelled into luxurious houses, expensive food and wine, horses and
yachts. Enormous houses of exquisite materials were built, and the news-
papers carried a large amount of advertisements for castles in Sweden and
estates in Denmark. Christoffer Hannevig bought a 154-foot-long racing
sailboat that had previously belonged to Count Gustav Krupp, but had
been taken as prize of war in Germany in 1914. Sailboats were status
symbols, and one investor owned a 12-metre, a 10-metre and an 8-metre,
77
Thowsen (1983, 313).
78
Keilhau (1923, 44). The book was published anonymously, with no reference to the author.
79
Vogt (1938, 143).
in addition to a large motorboat and an inland estate equipped with tele-

phones made of silver.80
Another favoured investment object was fine art. For investors like
Hannevig and Lea, the boom and the wealth were temporary. However,
for Norway, the abundance of funds had long-term cultural effects.81 In
1917 large sums were donated to establish a trustee association for the
Norwegian National Gallery. Tryggve Sagen, who was among the found-
ers, had the previous year donated 60,000 kroner to the gallery earmarked
for the purchase of foreign art—50 per cent more than the gallery’s
annual budget and almost four times as much as the gallery’s public fund-
ing for art purchases. Works of art by famous and soon-to-be-famous
artists were bought inexpensively on the Continent, helped by a strong
Norwegian krone and the desperate circumstances in war-torn Europe;
“the international art market had a broken back, and a group of trustees
in Kristiania had a honeypot bursting with money.”82
Fine art was hardly a concern for the population in general. For most
Norwegians, the abundance of money was seen mainly in rising prices,
and their bitter experience was that wages did not keep up. In 1916 and
1917 demonstrations and strikes were frequent in Kristiania and the
other major cities. “Sailors are drowning, people are starving, capital is
reaping the benefits,” was the disillusioned message on a poster in a rally
against the high cost of living.
As a result of the increasing inequality, social tensions grew—particu-
larly in the cities and other places with manufacturing industry, where
food was bought, rather than grown. Ordinary workers—and even more
so the unemployed—struggled with rationing and the rapid increase in
the cost of living. The lavishness and luxury that characterized the life-
style of the most successful speculators were provocative. The result was a
feeling of contempt and a growing class consciousness—syndicalists,
communists and anarchists gained support. The revolution in Russia had
created hope. Norwegian politics became polarized and was permanently
changed.
80
Vogt (1938, 158).
81
In recent years, two fascinating books that deal with the link between the war profits and the arts
have been published; Haugstad (2015, 2017). The latter book is a biography of Tryggve Sagen.
82
Haugstad (2015).
86 S. Tenold
The authorities increased their influence on the Norwegian economy

during the war. Rationing and maximum prices became the order of the
day. Monopolies were established and public expenses increased rapidly.
The tax burden increased. Johan Schreiner, who has written the most
extensive work on Norwegian shipping during the war, emphasizes that
“the relationship to the authorities was radically changed [as] the tradi-
tional freedom of action was drastically restrained by commands from
domestic and foreign branches of government. […] A similar transforma-
tion occurred in the relationship between shipping company and
seafarers.”83
The Norwegian authorities and shipowners managed the difficult bal-
ancing act that the First World War represented relatively well. At the same
time, it is evident that in public opinion, shipowners lost some of their
sheen—they were now more closely associated with speculators than with
society builders. There were still shipowners who played an important
political role—Joh. Ludwig Mowinckel, for instance, would go on to
become Prime Minister on three occasions in the interwar period.
However, the boom had been particularly pronounced in shipping, and
although fly-by-night “newcomers”—who saw casino-like opportunities
in shipping—had been responsible for the worst excesses, many long-
term, responsible shipowners were also tainted in the public’s perception.
The 1920s would bring economic challenges as well. In the words of
one shipowner, “The transition from the golden boom years was difficult,
prices fell vertically, and many of those who at the beginning of 1920
were millionaires – at least on paper and according to tax reports and
share values – were suddenly stony broke. Every day new bankruptcies
and new misery, frauds and hair-raising stupidity were revealed.”84
When peace returned in November 1918, many things had
changed, both in Norway and at the international stage. As shipown-
ers prepared for the post-war boom, the “first era of globalization”
was still an ideal. Unfortunately, the 1920s and the 1930s never lived
up to the expectations.
83
Schreiner (1963, ii). In 1915 it was decided that the Norwegian Shipowners’ Association would
function as an employers’ organization for the seafarers, and while this was initially of limited
importance, it became an important role when peace returned.
84
Ditlev-Simonsen (1945, 157–158).
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copyright holder.
4
Crisis? What Crisis? Norwegian Shipping
in the Interwar Period
On 14 October 1924, the reputable US newspaper, The Washington Post,

featured an article on the Norwegian ship Sagatind, where the crew alleg-
edly had ended up in a free-for-all fight after a “wild orgy on contraband
cargo.” The ship had been floating “aimlessly 40 miles off New York with-
out a helmsman” two days earlier, when 22 representatives from the US
Coast Guard vessel Seneca boarded. The Americans found “two sailors
asleep in the wheelhouse. Below decks they found the rest of the crew.
Some were asleep, some were in their bunks nursing broken bones, and
some were staggering about in a stupor. Nearly all were nursing black
eyes.”1 According to the newspaper report, the Coast Guard put the crew
of 32 in irons, and confiscated the cargo, which consisted of more than
40,000 cases of liquor.
The crew received a heavy-handed welcome by the US authorities, and
one mate was beaten so heavily that he lost three teeth and had to be
hospitalized after he had tried to stop one of the customs officers from
stealing a bottle of whiskey. Following the seizure, Sagatind was anchored
off the Statue of Liberty. The illegal cargo was discharged to a Brooklyn
The Washington Post, 141024, 10.

1

92 S. Tenold
army base—with around 1000 cases of liquor mysteriously disappearing

during the transfer.2 It is evident that all the hard work during Prohibition
made US officials thirsty.
The owner of Sagatind was AS Reidar, a company controlled by Finn
Friis and Carl Otto Lund—the latter a High Court attorney who had
served as mayor of Drammen in two periods and as a Member of
Parliament from 1916 to 1921. The vessel had been chartered to an
American smuggling syndicate through a French front man, and the ship
had also spent large parts of June 1924 on “Rum Row”—the line of
smuggling ships anchored just beyond the US maritime limit. Although
the Sagatind-debacle received a lot of attention on both sides of the
Atlantic, it turned out that the premise for the arrest of the ship had been
wrong. The authorities wanted to use the Sagatind as a test case, but the
necessary regulation against foreign smuggling ships had not yet been
ratified by the Senate.
The missing legal basis created problems for the authorities, as a legal
technicality implied that the US Coast Guard had no right to enter the
ship 22 miles off the coast. The shipowners considered demanding com-
pensation from the Americans, but after some gentle persuasion the claims
were silently shelved. The seamen, on the other hand, entered into a
drawn-out battle for damages. While the press reports of the contraband
orgy turned out to be an early example of “fake news,” the violence was
real. However, the perpetrators were the US officials, rather than the sea-
farers themselves. Indeed, in some Norwegian newspaper articles the inno-
cence—and sobriety—of the Norwegian sailors, and the heavy treatment
that they had been given, were emphasized.3 The seafarers were adamant
that they deserved compensation for the detention and for the manner in
which they were treated. Even 10 years after the event, they tried to con-
vince the Norwegian authorities that reparations were justified.
The Sagatind incidence was one of the first examples of Norwegian
presence in the less-salubrious part of the shipping sector—and
2
The New York Times, 050225, 5 and Nordisk Tidende, 120225, 4.
3
For a detailed account of the Sagatind story, see Johansen (1994, 13–23) and for a presentation
that is favourable to the crew, see 1ste Mai, 250628, 6. A more sober account—where the crews are
neither angels nor devils—can be found in Arbeiderbladet, 150125, 9. Another good account of the
smuggling business in general in this period is Chapters 1–3 of Lawson (2013).
Crisis? What Crisis? Norwegian Shipping in the Interwar Period 93
ndoubtedly the most publicized. Of course, Sagatind was not the only
u
Norwegian ship engaged in smuggling during the Prohibition era, and it
could be tempting to use the smuggling ships as an example of the
increasing desperation of Norwegian shipping companies during a period
of low activity in the shipping market. However, such an interpretation
would be terribly wrong.
Although it has been claimed that the Norwegians had an exception-
ally bad reputation with regard to smuggling, there are absolutely no
indications that they were overrepresented among smugglers.4 In fact,
while the interwar period generally is considered a bad period for inter-
national trade and shipping, Norwegian shipowners stood out favour-
ably, orchestrated an impressive resurgence and increased their share of
the world fleet. More importantly, while they had controlled a fleet of
relatively old and outdated ships before 1914, by the end of the interwar
period Norway had succeeded in modernizing the fleet and had the
world’s youngest and technologically most advanced merchant marine.
In some ways, the interwar period saw Norwegian shipping culture at
its best. Shipping companies were forced to look for new market oppor-
tunities, and when a viable course had been found, they managed to
exploit the desperation of idle Swedish and Danish yards to secure cheap
tonnage. Based on a combination of experience, knowledge and willing-
ness to take risk—and helped by the requisite portion of luck—Norwegian
shipowners managed to come strengthened out of a difficult period for
world shipping.
Between the Wars
The Great Depression is often the starting point for discussions about the
low economic growth of the interwar period, but the Great Depression
was both a symptom and a cause of more far-reaching problems in the
international economy.
4
For the claim about Norwegian reputation, see for instance Behr (1996). There is limited evidence
to support the claim. In 1925, only 10 of the more than 330 smuggling ships in US waters were
Norwegian; this 3 per cent share was lower than the Norwegian share of the world fleet; Nordisk
Tidende, 050525, 1.
94 S. Tenold
The First World War—at the time referred to as the Great War—
brought an abrupt end to the liberal world economy that had developed
in the decades before 1914. Although there had been signs of increased
protectionism at the start of the 20th century, the benefits of specializa-
tion and division of labour were so large that international trade contin-
ued to grow, spurred by a dramatic reduction of transport and other
transaction costs. Intercontinental migration flows of more than a mil-
lion people annually also created substantial demand for shipping before
the war.
The breakdown of the world economy during the war, the financial
turmoil of the 1920s, the depression of the early 1930s and the sluggish
recovery came as a surprise to most of those involved. When the First
World War ended, there had been considerable optimism about the
demand for transport as individual nations and the world economy itself
embarked on the road to recovery. Although the main merchant marines
had suffered substantial losses during the war, the enormous expansion of
shipbuilding activity, particularly in the United States, meant that the
fleet had actually increased marginally relative to its size before the war.
However, neutral Norway had suffered more than most.5 The coura-
geous—or foolhardy—employment of the fleet during the hostilities had
led to substantial losses. At the end of 1918 the carrying capacity of the
Norwegian fleet was around a quarter lower than it had been at the end
of 1914. At the same time, there had been a structural shift in the fleet;
the sailing ship tonnage had been more than halved, while the steamship
fleet lost around 25 per cent. There was a strong increase in the propor-
tion and tonnage of motorships, but from a relatively low starting point.6
During the war, the Norwegian merchant marine had developed unfa-
vourably—both in terms of quality and quantity. Many of the additions
5
According to data on the period August 1914–October 1918, in Statistics Norway (1919, 191),
three countries had a higher net reduction than Norway (30%); Germany (44%), Belgium (48%)
and Greece (47%). With the exception of Argentina, the fleets increased in all non-European coun-
tries for which we have statistics. The US fleet, increasing by more than 2.8 million compensated
tons (154%), had the highest absolute and relative growth. However, a commonly published over-
view puts the Norwegian losses (49.6%) at the top, followed by Italy and Greece; see Egeland
(1930, 18); Brækhus (1934, 106) or Haaland (1940, 18). This is based on gross losses—not taking
acquisitions into account.
6
Calculated on the basis of Statistics Norway (1919, 62).
from the war years were relatively old, inefficient ships. Although all
capacity was useful during the war boom, Norway’s competitive position
had deteriorated severely, with the share of the world fleet falling by
approximately a quarter—from around 4 per cent to around 3 per cent.
Throughout the war, materials and shipbuilding capacity had been in
short supply, and ships that would under other circumstances have been
considered inferior, easily found employment. There were also some
novel solutions. One innovation was ships made of concrete. When the
first large Norwegian-built ship made of concrete was launched in 1917,
it was heralded as the ship of the future. The advantage of the concrete
ships was that they did not rust and were easy to maintain—the disad-
vantage was that they for all practical purposes were quite useless outside
the harbour, extremely slow and difficult to handle. Less than two years
after the launch, the Norwegian Shipowners’ Association referred to this
“ship of the future” as a “totally unsuccessful vessel” and suggested that it
would benefit the fleet if such “surrogate vessels” were removed.7
The desperate demand for tonnage also spurred a revival of shipbuild-
ing on the South Coast of Norway. When activity peaked in the spring of
1918, some 80 yards that had been dormant for decades or engaged only
in repair, had commenced the building of new ships. Norwegian owners
also ordered almost 150 wooden ships—usually with auxiliary engines—
in the United States and Canada. Some of the US contacts turned out to
be “frauds,” while others used the Norwegian instalments to build up
non-existing yards, with little funds left to construct the ships. As the war
spread, it became increasingly difficult to acquire new tonnage. In the
United States, more than 40 newbuildings for Norwegian account had
been confiscated by the authorities after the Americans entered the war—
these were all steelships, as even the American authorities had limited
interest in the wooden vessels that Norwegians had ordered there.8
Although those who fell victim to the confiscation were promised “just
compensation” the case dragged on after the war. In 1919 most of the
owners saw the return of their paid-in instalments—in total USD34
7
Schreiner (1963, 404–405). For a detailed history of the loss-bringing operation of one concrete-
built ships, see Langfeldt (1980, 76–79).
8
Schreiner (1963, 396–405).
96 S. Tenold
illion plus interest—though with no reimbursement for the fact that

m
the value of the contracts was around three times higher.9 However, a
break-out group owning 15 contracts, initially led by Christoffer
Hannevig jr., refused to enter into an agreement with the US authorities.
When their case was brought to arbitration in the Hague they received a
smaller amount per contract than the less-aggressive owners. However,
the interwar period was characterized by unpredictable fluctuations in
most economic variables, and the recent depreciation of the Norwegian
krone more or less neutralized the negative effect.10
For most shipping companies the Armistice of 11 November 1918
signalled the start of an optimistic period. Many companies had large
funds available from a number of sources; insurance claims from vessels
that had been lost, capital that they had raised from new investors eager
to get a piece of the bullish market, and reserves built up as a result of
the high profits during the war. In tune with this optimism, and encour-
aged by the possibility of avoiding excess tax, many companies had
entered into newbuilding agreements. The ships were intended to go
straight from the shipyards and into the prosperous post-war market,
and the main problem was finding vacant building berths, not financ-
ing the investment. However, due to the high demand for yard capacity,
there was a substantial delay in delivery; some shipowners had ordered
vessels that could not be delivered until 1922. By then, the market had
crashed.
Just like shipping had facilitated “the first era of globalization,” the
rebuilding of the world economy after the war would depend on ship-
ping. Investors acted according to this belief, and in the slightly more
than two years from the end of the war in November 1918 to December
1920, the world fleet increased by 39 per cent.11 The post-war market was
indeed prosperous, but for less than 18 months.12 Shipping cycles peaked
in February and March 1920. Then, abruptly, the market collapsed,
9
Kloster (1935, 126).
10
See Egeland (1973, 146–148); Egeland was present in the United States as representative for the
Norwegian Shipowners’ Association.
11
Klovland (2017, 8).
12
Furthermore, for parts of the prosperous period, regulations from the war, including maximum
freights, were still in force.
reaching a trough around a year later.13 The post-war adjustments were

over more rapidly than anticipated, stocks were high and the interna-
tional economy never really recovered. Shipping was hard hit, as employ-
ment for the ships became extremely difficult to find, even at very low
rates.
During 1920 freight rates dropped by around three-quarters—one
Norwegian shipowner compared the situation to “when the bottom falls
off a barrel.”14 Ship prices followed suit, as lay-ups increased to a level that
had not been seen before—and has never been seen since. The figure usu-
ally quoted is that half of the world fleet was idle at the worst point
around the middle of 1921. The aforementioned Sagatind had made
good money during the boom in 1920, with the owners paying a 10 per
cent dividend, but the ship was laid up from early December 1920 to the
beginning of August 1921.15
Still, this unsurpassed overcapacity was a short-lived shock, and had
limited long-term effects. Although the severity was extreme, the post-
war crisis was brief and more normal conditions returned quite rapidly.
Thus, due to the brevity of the crisis, the overcapacity and high lay-up
rates did not have the kind of detrimental effect on shipping company
revenues and equity that we see during the longer, but less-violent, crises
in the 1930s and 1970s.
In 1920 Norwegian gross freight earnings—shipping income from
abroad—amounted to almost NOK 1.3 billion, a record that would
remain until the Second World War. Figure 4.1 shows the development
of the gross freight earnings in the first four decades of the 20th century,
and the data illustrate the dramatic boom-and-bust that the First World
War and the brief post-war boom represented.16
13
Klovland (2016, 19).
14
See Castelein (2015) or Klovland (2016); quote from shipowner Thoresen in Christensen (1933,
14).
15
When Sagatind started trading again, one of its first cargoes was forest products that were trans-
ported on behalf of the Soviet authorities. This voyage also created quite a stir in the Norwegian
press, as the timber originated with a previously Norwegian-owned sawmill that the “Bolsheviks”
had “nationalized”; Aftenposten, 270722, 3. The Drammen shipowners Friis & Lund really knew
how to pick the right customers.
16
Figure 4.1: Gross freight earnings from Statistics Norway (1948, 277), with real figures deflated
by means of the data in Grytten (2004).
98 S. Tenold
1400
Gross freight earnings - nominal
1200
Gross freight earnings - real
1000
800
600
400
200
0
1904
1910
1912
1918
1924
1930
1932
1938
1900
1902
1906
1908
1914
1916
1920
1922
1926
1928
1934
1936
Fig. 4.1 Gross freight earnings, nominal and real, 1900–1939, NOK million.
(Source: Statistics Norway (1948, 277). See footnote)
The period 1900–1939 was characterized by violent price movements,

both strong inflation and periods of deflation, which obscure the actual
development. In real terms, revenues from abroad during the prosperous
years (1915–1920) were typically around three times higher than in the
period 1900–1914, and twice as high as in the subsequent period of
peace (1921–1938). Consequently, even with the collapse of the 1920s
and the crisis of the 1930s, Norwegian shipping revenues followed a gen-
tly upwards-sloping trend, and the level during the interwar period was
on average around 50 per cent higher than before the war.
This positive development was atypical in an international perspective.
For world shipping in general, the interwar period was characterized by
structural changes, overcapacity and low profits. Freight rates saw a steep
decline in the first half of the 1920s, while the 1930s were another “dis-
mal period for the shipping industry.”17 The negative development of the
shipping market reflected more fundamental problems in the world
economy.
The attempts at rebuilding the international economy after the war
were botched. Although the 1920s were prosperous and “swinging” in
Klovland (2016, 17).

17
the United States, the world economy never rediscovered its pre-war
rhythm. One problem was monetary conditions. The Germans paid war
reparations to France and the UK, that used the money to service their
war debts to the United States. How could the war-torn Germans finance
this? Well, they borrowed money from the Americans. In monetary
terms, the interwar period was a merry-go-round let loose, with mercu-
rial exchange rate fluctuations, hyperinflation and extreme instability in
the world economy.
A second problem was the lack of a hegemonial power; a sunset Europe
that was unable to take responsibility for the functioning of the interna-
tional economy. Before the war, European imports had been financed by
a combination of “invisible earnings” from shipping, return on invest-
ments abroad and export revenues. Following the war, the decline of the
European fleet reduced shipping earnings. Liquidation of investments,
partly to finance the war, partly due to the “disappearance” of large debt-
ors such as Tsarist Russia, implied that Europe had gone from being net
creditor to becoming net debtor. Finally, the reduced advantage in manu-
facturing production—neutral countries had built up their own capac-
ity—aggravated the adverse balance within merchandise trade. The
limited scope for manufacturing exports was made even more difficult as
a result of increasingly protectionist policies in important markets.
For shipping, the most important problem was international trade,
where the First World War and the interwar depression had a negative
effect. The liberal world order, characterized by relatively free trade, did
not recover after peace had returned. Tariffs, quotas and other restrictions
introduced during the war were difficult to remove, and well-organized
interest groups fought to maintain their privileges. Protectionism had
spread to new countries and new industries. For the shipping industry—
whose basis is international exchange of goods and commodities—the
breakdown of the liberal trading regime was particularly problematic.
When international trade sneezes, shipping catches a cold. When
international trade catches a cold, shipping gets pneumonia. The inter-
war period never saw the kind of strong trade growth that had been char-
acteristic for the decades before the war, and with the onset of the Great
Depression international trade collapsed. However, uncritical use of trade
data gives an overly negative picture of the development of shipping
100 S. Tenold
demand. For instance, although the value of world trade decreased by

around 60 per cent from 1930 to 1932, this was primarily driven by a
strong reduction of prices. Ships move cargoes, not money. In actual
terms, the volume reduction—and the effect on shipping—was much
lower.
Despite all the rhetoric about the slow growth of trade and the inter-
war collapse of the international economy, shipping demand in 1937 was
in fact around 75 per cent higher than it had been in 1913, despite the
fact that data on the development of world trade volumes only present a
growth of 25 per cent. Three factors explain the fact that the demand for
seaborne transport grew faster than trade in general. First, trade in raw
materials—relatively heavy commodities that take up a lot of shipping
capacity—increased faster than trade in less shipping-intensive cargoes
such as foodstuffs and finished goods. Second, an increase in average dis-
tances pushed up transport demand. Finally, due to the increased special-
ization and changes in the international trading pattern, ships spent a
larger share of their time in ballast.18
International Shipping in Transition

The best example of the increased specialization is probably the interwar
growth segment par excellence—oil tanker shipping. The main shift in
seaborne energy transport was a relative reduction in the role of coal, and
the concomitant upsurge of oil transports. Consequently, demand devel-
opment was very conducive to oil tankers—and the tanker fleet increased
tremendously. At the beginning of the 1920s, the tanker fleet made up
less than 6 per cent of the world fleet and amounted to slightly more than
3 million gross registered tons. Almost 90 per cent of this was controlled
by owners, mainly oil companies, in the United States and the UK. By
1937 the proportion of tankers had increased to more than 15 per cent,
and American and British interests now controlled around half of this
tonnage. The third largest fleet—slightly less than 20 per cent of all tanker
tonnage—was owned by Norwegian shipping companies.
Seland (1953, 11, 46–49).

18
The growth in the demand for oil transport is only one half of the story
about Norwegian tanker expansion. The other half of the story is some-
thing that most of us tend to think of as a modern phenomenon: out-
sourcing. Starting before the war, but accelerating in the second half of
the 1920s, there was an important shift in ownership of oil tanker ton-
nage. A substantial portion of tanker transport was outsourced from oil
companies to independent shipping companies. In 1900 independent
shipping companies owned around 10 per cent of the tanker fleet, com-
pared with 80 per cent owned by oil companies and 10 per cent by gov-
ernments. By 1923 the independent fleet had increased to 25 per cent of
the tanker fleet, and by 1939 to almost 40 per cent.19 This share increased
amidst a tremendous fleet growth; the amount of independent tanker
tonnage ballooned from 36,000 gross registered tons in 1900 to almost
4.3 million tons four decades later—an average annual growth of 13 per
cent.
By leaving part of the transport to external service providers, the oil
companies freed up resources to do what they did best—look for and
exploit oil resources. However, a considerable share of the independent
tanker tonnage was tied to the oil companies on charters of relatively long
duration. The most famous outsourcing case concerned tankers sold from
Anglo-Saxon Petroleum Co.—the transport arm of Royal Dutch/Shell—
with 10-year charters back to the sellers. An impressive 26 of the 28 ships
that were outsourced in the period 1927–1930 ended up in Norway,
many of them on the South Coast.
Through a combination of purchases of second-hand oil company ton-
nage and an ambitious newbuilding programme, Norwegian shipping
companies built up the world’s largest independent tanker fleet. The oil
tankers—with their highly specialized technology—supplemented liners
and tramp vessels, and also encouraged another technological shift: the
replacement of steam engines by diesel engines. This transformation also
had implications for work on board—coaling jobs were removed and
“the soot angels” were left on the ash heap of history. The character of life
at sea changed dramatically in the decades either side of the turn of the
century. First, the old shanties from the sailing ships were no longer
19
Data from British Petroleum, cited in Middlemiss (1996, 14).
102 S. Tenold
heard, as steam replaced sails and work in the masts was replaced by haul-
ing of coal. Now that new type of labour-intensive activity has gradually
disappeared as well.
The interwar period also saw a major shift in market shares in interna-
tional shipping. There was a strong decline in the supremacy of the two
major maritime powers—the United States and the UK. The United
States had been oriented inwards—the way to the west was more enticing
than the sea—through much of the second half of the 19th century.
Indeed, the shipping and shipbuilding expansion during the First World
War was a break from the norm. After the hostilities had ended, the
United States established a large reserve fleet, to show readiness for
another war situation. However, within commercial shipping, there was
hardly any new investment. In the period from 1923 to 1939, the average
age of the US fleet increased by 11 months annually.20 The United States
was better off leaving shipping to foreigners.
The basis for the British decline was different. In the 19th century,
Britain had large advantages in manufacturing production, and also
oversaw a political and commercial empire that spanned the world.21 The
history of the UK in the 20th century is the story of decline. Step by step
the British advantages disappeared. The knowledge of how to build effi-
cient machines, including steamships and their engines, was transferred
to other countries. British coal was replaced as the main source of motive
power. Finally, Britain’s commercial and political empire was falling
apart.
When the two leading maritime nations faltered, other countries were
ready to take over. Four countries, in particular, managed to grab large
market shares in the interwar period. Germany, starting from a low point
with a practically non-existent merchant marine after the First World
War, regained its former position as one of the world’s leading maritime
nations. In Japan, where the fear of colonization had gradually become
replaced by imperial ambitions, the merchant marine played an important
See Tenold (2006, 123).

20
The song “Rule, Britannia!” was written in the 18th century, as a response to the infamous War
21
of Jenkins’ Ear. The shift from the imperative “Britannia, rule the waves” to the “vulgarly mis-
quoted” statement “Britannia rules the waves” took place in the 19th century; Livingstone (2016,
186–187) and The Windsor Magazine, 1915, 73.
political role.22 The growth of the German and Japanese fleets of course
reflected the countries’ role in the world economy.
The final challengers were less obvious; Norway had already been
established among the Top Five of the world’s maritime nations, but in
the interwar period the Norwegian shipowners really solidified their posi-
tion, increasing their share of the world fleet. While the world fleet prac-
tically “stood still,” in tonnage terms, from 1923 to 1939, the Norwegian
fleet more than doubled.23 The expansion was to a large extent based on
oil tankers with diesel engines, so by the end of the interwar period, the
Norwegian fleet was both bigger and better. However, an increasing focus
on the liner trade and a consistently strong position in old specialties
such as the Caribbean fruit trade also helped the Norwegian fleet’s
expansion.24
The strongest growth in relative terms took place in Greece.25 The
country had been independent since the first half of the 19th century, but
gained important territorial advances, primarily at the expense of the
Ottoman Empire. Today, Norway is the only European country with a
longer coastline than Greece, and the local basis for international ship-
ping is not too different in the two countries.
The Greek expansion partly had the same foundations as the
Norwegian, based on family and local connections. It had a decentralized
pattern, with strong ownership interests on a number of islands. Many of
the shipping companies did not have an administrative structure onshore,
as “the technical and operational management of the ship took place at
sea.”26 The country did not see a movement of shipping to the leading
22
See Chida and Davies (1990), for the best English-language introduction to Japanese shipping.
23
Calculated on the basis of Lloyd’s Register Statistical Tables, various years. Figures do not include
the US reserve fleet; see Tenold (2006, 246).
24
In the middle of the 1920s, Norwegians accounted for around 60 per cent of the ships that were
employed in the US fruit trade. They also had a large share of the transport of fruit from Spain in
the summer—ships that in the winter often carried forest products; Egeland (1930, 43–44).
25
The Greek fleet increased on average by almost 6 per cent annually from 1923 to 1939. For the
basis of the expansion, see Harlaftis (1996, 181–206). For the other main nations, the Norwegian
increase of 4.6 per cent came second, Germany with 2.5 per cent came third, and Japan’s 1.62 per
cent came fourth. The biggest decline was in the United States (minus 2.2 per cent), while the
British fleet’s increase during 1923–1930 was more than neutralized by its decline during
1930–1939, leading to an annual net decline of 0.8 per cent; see Tenold (2006, 117).
26
Harlaftis (1996, 87) and Harlaftis and Theotokas (2004, 30–33).
104 S. Tenold
urban centres, like in Norway. Indeed, when such a shift occurred in

Greek shipping after 1945, it was not only to Athens and Piraeus, but
also to the metropolises of London and New York.
The increase in the merchant marines of Germany and Japan can be
explained by their large and growing economies. The ships aided and
abetted expansive imperial ambitions that would subsequently come to
have disastrous effects. Norway and Greece, on the other hand, had lim-
ited imperial ambitions and were relatively unimportant in international
trade. However, they shared certain characteristics; limited domestic
resources, long coastlines and an even longer maritime heritage. A crucial
point for both countries is that their rise to the top of the shipping mar-
ket has been centred on foreign, rather than home, demand.27
This latter element was even more notable in the case of Panama, the
first of an unlikely group of maritime nations that entered the shipping
market in the interwar period and would go on to dominate it in the last
part of the 20th century. Panama was a small, poor country, but with an
important role in international shipping after the opening of the Panama
Canal in 1914. Five years later, Belen Quezada, a former US navy ship,
became the first foreign vessel to fly the Panamanian flag.
The expansion of the Panamanian fleet is a reflection of the footloose
nature of shipping. Part of the basis for the use of the registry was US
policy—a reaction to the introduction of the labour-friendly Seamen’s
Act in 1915, which increased the cost level substantially for American
ships. Interestingly, the man responsible for the “emancipation of
[American] seamen” was a Norwegian immigrant, “Andrew Furuseth, the
head of the International Seamen’s Union (ISU) and a man of such
implacable determination and virtue that he was frequently compared to
Lincoln and Jesus.”28
The Seamen’s Act included minimum levels of crew size, as well as
requirements for specific skills and payments. These regulations made
ships registered in the United States particularly expensive and uncom-
27
While Norwegian shipping companies had relied on intercontinental trade since the last part of
the 19th century, Greek companies initially had more of a “home waters” bias. In 1938 almost half
of the port entries of Greek ships were in the Mediterranean and the Black Sea, but after the Second
World War Greek owners became more international and more “exiled” than anyone else.
28
Gibson and Donovan (2001, 116).
petitive in many markets, and could be alleviated by the transfer to the

Panamanian flag. Another impetus came from the Prohibition. Belen
Quezada was a smuggling ship, which was followed on the Panamanian
register by two “dry” US cruise ships that feared losing their market if
they were unable to ply passengers with alcohol.
The final consideration that made Panama attractive was tax. The
desire to avoid “double taxation” of profits in the UK and the investors’
home countries was important when the whale ship Vikingen was trans-
ferred to the Panamanian flag in 1931. Subsequently, Honduras became
the second “Flag of Convenience,” primarily promoted by the United
Fruit Company’s desire to transport bananas cheaply.29
Although the first Flags of Convenience were introduced in the first
half of the 20th century, the scale was limited, and the majority of those
that used the new opportunities had specific purposes—they were to
some extent “Flags of Refuge.” The Flags of Convenience did not create
any major controversy until after the Second World War. However, it was
already evident that the special character of the shipping industry—its
operation in unclear jurisdictions—created a need for special, and inter-
nationally coordinated, solutions. In 1920, the second conference of the
International Labour Organization (ILO), held in Genoa, dealt specifi-
cally with shipping. According to the contemporary edition of Encyclopedia
Britannica; “Of all industries, the shipping industry is the most essen-
tially international, and of all callings the seaman’s has perhaps received
the least attention from the legislator.”30 This omission was what the ILO
wanted to rectify, and the global character of shipping meant that it was
a good test case for how the new organization could influence working
practices.
In the early 1920s, ILO introduced a number of conventions regulat-
ing issues such as the minimum age for seafarers (14 years), unemploy-
ment indemnity for shipwrecked sailors, compulsory medical examination
of seafarers under the age of 18, and so on. Another major issue was the
suppression of the system of “crimps”—employment agencies that
29
Carlisle (2009, 2017). Carlisle (2017), Chapter 7 also counts Danzig as the very first Flag of
Convenience, but the juridical basis for this is so specialized that it is not usually taken into account.
30
Entry “International Labour Organization”, Encyclopedia Britannica, 1922 edition.
106 S. Tenold
o perated in a “dark, dark grey area,” sometimes with shady tactics to

ensure income from sailors looking for a ship to sign on.31 Still, although
a framework was in place to protect seafarers, the manner in which this
was followed up in practice was far from impressive, and often the legisla-
tion was simply ignored. In an interwar period with substantial unem-
ployment, workers—even the unionized ones—had been dealt a bad
hand.
he Hare and the Tortoise: From Laggards

T
to Leaders
In Norway, regional seafarers’ organizations dated back to the second half
of the 19th century, primarily for captains.32 However, from the begin-
ning of the 20th century, the various groups of ratings also formed their
own organizations; Bergens Stuertforening organized chief stewards from
1902, while able seamen and stokers started organizing around 1910.
The new organizations and legislation did improve the seafarers’ lot.
However, the main impetus for a safer and healthier life at sea did not
come from unions or authorities. Rather, it was a result of technological
improvements and the modernization of the Norwegian fleet. Although
the conditions were far from luxurious, both the quality of board and
lodging and the overall safety improved appreciably. Food regulations—
partly as a response to scurvy, beriberi and other diseases—became based
on nutritional science, and were helped by improved storage and shorter
voyages.33 Refrigeration improved food storage, and electricity improved
31
See Bruijn (2005, 15–16), Bolle (2006) and Fink (2016), for an introduction to the maritime
work of the ILO.
32
Captains had been organized in guilds, with specific rights and obligations, centuries before this,
but the first Captains’ Associations [Skipperforeninger] were established in the middle of the 19th
century.
33
There were no requirements with regard to the quantity or quality of onboard food before the late
19th century. See Kloster (1942, 64–87) for an overview of the regulation of onboard provisions,
with an emphasis on food. Based on contemporary sources, Kloster characterizes the victualling
before 1840 as “meagre,” although with ample servings of spirits, to “wake up” the crew in the
morning when the ship was in port, and several times daily if work was particularly hard. From
1840 to 1870 spirits had usually been replaced by coffee, but the food was “much better, but still
sanitation. Still, the main technological advance was not related to wel-
fare: “Comfort may be overestimated, but the technology that creates
safety, cleanliness and convenience for passengers, at least deserves
respect.”34
Better food and cleaner surroundings helped seafarers in the long
term; improvements in communications reduced the short-term dan-
gers. The interwar period is known as the Golden Age of Radio, where
the new technology had a massive cultural influence, in particular in
the United States. At sea, the cultural impact was limited, but the over-
all effects even more important. In 1931 the first international radio
code was published; still organized in a manner similar to the old flag
signals, though vastly more useful over longer distances and when visi-
bility was limited.
The frequently used Lombard code book contains more than 1200
pages of five-letter codes, and the amount of detail is staggering. It con-
tains, for instance, around 22,500 codes denoting ports and places, more
than 17,000 codes covering particular ships and at least 14,000 company
addresses. The largest portion of the book—general codes—covers in
excess of 830 pages. Among the more than 187,000 codes can be found,
for instance, CLRKK (absinthe), GMRDA (drunkenness) and FPBDU
(accidental death).35 Another recent invention was radio navigation;
“undoubtedly the best aid for safe navigation both on the ocean and
along the coast.”36
The improved communication became particularly important when it
was combined with progress in other areas. Advances in the science of
meteorology—to a large extent originating in Bergen—made the
improved access to information particularly useful. Similarly, a service
providing medicinal advice was established, implying that even small
ships could benefit from access to qualified doctors. By the late 1930s,
more than 400 Norwegian ships had shortwave radios installed, and were
simple.” To illustrate the basic character of the equipment: in the middle of the 19th century,
Norwegian sailors on US vessels were impressed by the fact that there was a medicine chest onboard.
34
Kent (1925, 4).
35
See Lombard (1934).
36
Mohn (1942, 104).
108 S. Tenold
able to stay in direct and frequent contact with the home country from
practically anywhere in the world.37
Many shipowners began to take the welfare of sailors more seriously, and
new vessels—in addition to some old ones—were equipped with book col-
lections, both prose and educational literature. Indeed, seafarers were
encouraged to use their spare time to study, in order to rise in the ranks.
Norwegian owners and officers were also praised for their “admirable inter-
est in and consideration for the crew’s well-being and satisfaction.”38 In
particular, the quality of the cabins and mess rooms was praised; the mess
rooms for engine personnel on Norwegian tankers, were claimed to be of
the same quality as the officers’ mess rooms on British ships.
The most important improvement, however, was probably in the qual-
ity of the ship’s structure—its seaworthiness, manoeuvrability and mate-
rials. In the 1890s, more than four Norwegian vessels were lost at sea
every week. In the 1920s the corresponding figure was just above one,
while in the 1930s “only” 37 ships were lost in an average year.39 One
reason for the decline was that the old, leaking and accident-prone sailing
vessels died out and were replaced by state-of-the-art modern vessels. The
average age of the Norwegian tonnage fell from around 19 years in 1914
to less than 13 years in 1939.40
From the early 1920s to the outbreak of the Second World War, the
average age of the Norwegian fleet remained more or less the same,
around 12–13 years. This had two implications. First, although the aver-
age age was the same, the fleet each year became one year “more modern”;
it is the year the ship is built, not the age, which determines the level of
its qualities. Second, although the Norwegian average age was static, the
international fleet aged substantially in this period, as a result of lacking
investment. In 1923 the average age was more or less the same as in
37
Not everyone was happy about the development; a Bergen captain allegedly said that “We are
indeed flooded with telegrams when we are in port; why should we be bothered by them at sea as
well”; Albretsen (1942, 119).
38
An anonymous British newspaper article quoted in Egeland (1930, 32).
39
Calculated on the basis of Statistisk Sentralbyrå (1968, 177).
40
The figure for 1913 is estimated on the basis of data in Einarsen (1938, 110). Apparently, the
average age around 1880 was more or less the same; rough calculations based on Tønnessen (1951,
141).
Norway, by 1939 it had increased to almost 17 years. Consequently,

compared with other countries, the Norwegian fleet became more mod-
ern, more competitive and more attractive.
The technology historian Håkon With Andersen has referred to the
dramatic interwar transformation of the Norwegian fleet as a develop-
ment from laggards to leaders.41 As previously mentioned, Norway was
no pioneer in the transformation from sail to steam. On the South Coast,
in particular, sailing ships dominated well into the new century, and in
1916 Kristiansand was the sailing ship capital of the world, with almost
70 iron and steel sailing vessels.42
The pre-war tonnage level for steamships was regained in 1921, and
the steamship fleet continued to increase until peaking in 1931. From
then on, the reduction in steamship tonnage was offset by an increase in
motor-driven vessels. By the beginning of 1939, Norway’s share of the
world fleet was around 7 per cent—more than double what it had been
when the war ended, and for tankers the market share was an impressive
18 per cent.
The sailing ship fleet, on the other hand, silently disappeared during
and shortly after the war. Counting around 1000 ships, and more than
600,000 gross tons, when the war broke out, only around a quarter of the
ships were left by 1925. These were primarily the smaller, local vessels—
in tonnage terms, the reduction from 1914 to 1925 amounted more than
90 per cent.43 Around 180 ships, totalling almost 190,000 tons, were lost
during the war.44 In percentage terms the direct war losses amounted to
slightly more than 30 per cent, compared with more than 50 per cent for
the steam and motor ships. However, lack of reinvestment and natural
scrapping of obsolete tonnage meant that the sailing ship fleet declined
by more than half from 1914 to 1918, compared with a net reduction of
roughly a quarter for the steamships. Nevertheless, as late as in 1920
there were still almost 80 sailing vessels larger than 1500 tons in the
Norwegian fleet.
41
Andersen (1992).
42
Seland (1959, 258).
43
Estimated on the basis of Statistics Norway (1948, 242).
44
Vigeland (1949, 256).
110 S. Tenold
The sailing ships had remained competitive in certain trades—in par-

ticular the transport of potassium nitrate from Chile—and on long dis-
tances. However, they were clearly a dying breed—and a large proportion
of them died from “natural causes.” One example is Skaregrøm, one of
Norway’s last commercially operated square-riggers, built in Port Glasgow
on the Clyde in 1903. When the vessel was bought second-hand by the
Grimstad-based shipowner Johan Bang in 1924, it was renamed after an
old wooden barque that the owner’s grandfather had built at his own yard
in Grimstad in 1877. The first Norwegian-built Skaregrøm was lost on a
trip from Marseille to New York in 1891. The name Skaregrøm is thus a
good example of both the changing strategies (and the unchanging fates)
of ships and shipowners on the South Coast.
In November 1926 the Scottish-built Skaregrøm finished loading tim-
ber in Fredrikshald (Halden), on the east side of the Oslofjord, and set
sail for Australia. The captain, Peder Johannessen, had brought his wife
and two of their children on the voyage. A week before Christmas, a
major storm destroyed the rigging, leaving only the foremast and “a
stump of the mizzen-mast.” Johannessen managed to take the ship to the
Azores, where Skaregrøm was condemned. The ship was subsequently
towed to London, where the valuable cargo was sold. Captain Johannessen
received a gold medal, and also a gold watch from the cargo’s insurer.45
The sailing ship era was undoubtedly over in the interwar period, and
in its final years the decline went rapidly. The shipping company
S.O. Stray in Kristiansand, which owned 20 sailing ships in 1920, had
disposed of all by 1925.46 The city’s sailing ship fleet declined from almost
50 ships in 1920 to 34 in 1922 and only four in 1925. Many of the
Norwegian sailing ships were scrapped, others were lost and some were
sold to foreign shipowners, for instance Åland’s Gustaf Erikson, who
operated windjammers in the South Australian grain trade.47 Some had
45
Based on Bakka (1998, 14–15), Vigeland (1949, 257–258), Drevdal (1994, 137–140).
46
With wonderful irony, the main reason that S.O. Stray was liquidated some years after the last
sailing ship was sold, was its badly timed investment in three modern motor ships, not the fact that
the majority of the company’s fleet had been sailing ships in the era of steam and diesel; Seland
(1959, 226–229).
47
See Newby (1956). Although the Skaregrøm had an unfortunate fate, Pommern, a former
Eriksson-ship and a close, slightly larger cousin—also built in Port Glasgow in 1903—has survived
and is today a museum ship in Mariehamn, Åland. See also Kåhre (1977, 1980).
The UK
The Netherl.
Germany
Japan
Denmark
World avg.
France
Russia
Sweden Steam 1900
Greece Motor 1939
Italy
The US
Norway
Portugal
Finland
0 10 20 30 40 50 60 70 80
Fig. 4.2 Steam and motorship shares, per cent, 1900 and 1938, based on gross
tonnage. (Source: Statistics Norway (1902, 168; 1939, 324). See footnote)
more unconventional fates. The Stray-vessel Alastor, after a stint in

Finnish ownership, ended up as the restaurant ship Bounty in the harbour
of Margate in Kent after the Second World War.48
Figure 4.2 clearly illustrates the transformation of the Norwegian fleet
from a technological laggard at the start of the century to a technological
leader at the end of the interwar period.49 Only relatively poor and tech-
nologically backward countries such as Portugal and Finland had a higher
share of sailing ship tonnage than Norway at the start of the century.
While steamships made up almost 64 per cent of the world fleet, in
Norway the share was less than 35 per cent. Less than four decades later,
more than 60 per cent of the Norwegian fleet consisted of the most
48
Motorboating, December 1949, 31.
49
Shares in 1900 refer to the end of the year fleets of vessels larger than 50 tons and are calculated
on the basis of Statistics Norway (1902, 168), with no adjustment between steam and sail tons.
Figures for Russia refer to 1899, and include vessels smaller than 50 tons but not ships in the
Caspian Sea and the Pacific ports. Italian figures are estimates. Shares in 1939 refer to the June fleets
of steam and motor ships larger than 100 gross tons and sailing ships larger than 100 net tons and
are calculated on the basis of Statistics Norway (1939, 324). The share for Great Britain and Ireland
is calculated on the basis of data that include the Dominions and colonies, but this is unlikely to
change the overall picture much, due to the large share of British tonnage (around 85 per cent).
112 S. Tenold
modern technology—the motorship—compared with less than a quarter

for the world fleet.
The underdog is loved by history—or, more precisely, by historians.
And the underdog—in the shape of the once-proud sailing shipowners
on the South Coast of Norway—has traditionally played an important
part in the narrative of Norwegian tanker shipping in the interwar period.
These shipowners—left by the wayside (or the seaside?) during the trans-
formation from sail to steam—saw a Phoenix-like return in the interwar
period, emerging successfully in the transition to the “new” technology,
the oil tankers. The Anglo-Saxon vessels were their tickets in the tanker
lottery. As the seller provided financing, the purchase of these vessels was
a good deal for cash-strapped companies, and 16 of the 28 ships were
eventually sold to companies based on the South Coast.
Closer analysis has revealed that the Anglo-Saxon purchases were but a
small part of the Norwegian tanker tale.50 The main growth occurred
among newly established companies, particularly in Oslo, that had close
relationships to yards in Denmark and Sweden.51 The expansion was thus
a pan-Scandinavian effort. Ships were built at yards in Sweden (around
35 per cent of the newbuilt tanker tonnage) and Denmark (around 15
per cent), but operated by Norwegian shipping companies, sometimes on
long charters to the oil companies, at other times not.52
One of the main drivers behind the tanker investments was Hugo
Hammar, managing director at Götaverken in Gothenburg, who walked
around Oslo like a missionary, selling tanker tonnage as the economically
attractive escape route from the depressed shipping markets. Helped by
eager Oslo brokers, a substantial pressure was built up from the supply
side, where both ships and mortgages were on offer.53 The authorities in
several European countries, eager to ensure employment in their
shipyards, contributed by offering generous financing that limited the
50
Tenold (2007).
51
The Norwegian capital was characterized by a sense of identity crisis around the turn of the cen-
tury. In the official Norwegian nomenclature, Christiania became Kristiania in 1877, while the city
authorities accepted the name change in 1897. The name was formally changed to Oslo in 1925.
52
Market shares based on the more than 200 diesel tankers built during 1925–1939 and listed in
Det Norske Veritas, 1939.
53
See Gunnerud (1992) for a comprehensive analysis.
need for Norwegian equity and enabled the entry—or re-entry—of com-
panies with meagre resources. The credits offered by Hammar and
Götaverken were initially 50 per cent over five years, but in the 1920s
they were increased to 70 per cent, at the same time as the repayment
period was increased.54
The equity needed to buy a newbuilt Swedish tanker in the late 1920s
was around NOK 650,000—a petty sum when we consider that quite
ordinary ships could cost 3–4 million or more during the First World
War. Typically, the money was raised from a large number of sources:
families, friends, business associates and—in many cases very impor-
tantly—brokers eager to get commissions. A very telling example of a
small and dynamic entrepreneurial venture is Moltzau’s Tankrederi,
which began its operations in the corner of the shipping company Ivar
An. Christensen’s waiting room. Ragnar Moltzau was Christensen’s secre-
tary.55 His first tanker contract, a ship in the UK ordered for delivery in
the autumn of 1930, had to be resold as he was unable to secure financing
following the stock market collapse. In the summer of 1930 Moltzau
managed to raise NOK 750,000 in share capital. One-seventh of this
came from two broker companies—one in Norway and one in the UK—
in exchange for exclusive brokering rights for the ship.56
Figure 4.3 shows the strong increase in the number of Norwegian
tanker-owning companies, from 11 in 1919 to 107 in 1939.57 Regionwise,
the East shot forward, led by Oslo, the South recovered and the West
struggled to keep up. It is also very clear that the main basis for the tanker
expansion was Oslo; while the number of tanker owners in Bergen dou-
bled, the number in Oslo multiplied by a factor of 48. The late, but sig-
nificant, addition of the South Coast is also clear; Arendal—which got its
first tanker-owning company in 1928—had as many companies as
Bergen 10 years later.
54
Bohlin (1989, 81).
55
See Fasting (1955).
56
Kolltveit (1977, 49).
57
Figure 4.3: Based on information from various issues of the Veritas-registry. The dominant cities
in the “Other” category are Tønsberg, with eight companies, Stavanger with six and Sandefjord
with five companies in 1939. South Coast includes Arendal (eight companies), Farsund (three),
Flekkefjord (one), Grimstad (two), Kristiansand (five), Risør (two) and Tvedestrand (one).
114 S. Tenold
50
40
Bergen Oslo
30
South Coast Others
20
10
0
1919 1924 1929 1934 1939
Fig. 4.3 The number of tanker companies in various Norwegian regions,

1919–1939. (Source: Veritas, various issues)
Parallel with the transformation of the Norwegian fleet, the manner in

which shipping was conducted in Norway was modernized. With the
demise of the sailing ship era, the traditional part ownerships had increas-
ingly been replaced by limited liability companies. However, as many of
the first limited liability companies were single-ship companies, the exis-
tence of the business was still closely tied to the existence of the vessel.
The interwar period saw a transformation from single-ship companies
to multi-ship companies, which implied that the scope for continuity was
greatly increased. Capital was raised in the same manner as before—with
a relatively wide dispersion of ownership. However, the possibilities of
arranging financing through the shipyard, and the improved access to
outside capital from ship mortgage institutions, reduced the demand for
equity.
The multi-ship companies allowed continuity, but also had advantages
with regard to insurance, ship operation, access to credit and preserva-
tion of company-specific knowledge. This latter element had been taken
care of through managing owners that oversaw the business of several
companies, though the First World War showed how easily a hostile
takeover could take ships out of the hands of the managers. Another
advantage was the multi-ship companies’ ability to “smooth out” the
effects of business cycles on tax payments, dividends and employment—
by definition the fate of the single-ship companies had been tied directly
to their one vessel.
The transformation from traditional single-ship to multi-ship compa-
nies has been put forward as one explanation of the geographical shifts in
Norwegian shipping in the interwar period. From 1920 to 1939 the fleet
registered in Oslo increased substantially faster than that of Bergen, and
that of Norway in general.58 Contemporary sources suggest that the reli-
ance on an antiquated ownership structure explains why Bergen “was
unable to keep up with the development of technology and business
practice.”59
In his classic book on the decline of Great Britain’s maritime hege-
mony, British Shipping and World Competition, Stanley G. Sturmey draws
a parallel between the lethargy of British shipowners and the shipowners
in Bergen. In both cases, a conservative attitude is used to explain why
others took over the advantage.60 In the case of Oslo, the offensive atti-
tude of the city’s own shipping companies also got external help. The
capital’s growth in the first half of the 20th century was strengthened by
the relocation of shipowners from other parts of the country; A.F. Klaveness
from Sandefjord in 1907, Wilh. Wilhelmsen from Tønsberg—at the time
the country’s largest shipping company—in 1916 and Sig. Bergesen d.y.
from Stavanger (1939).
The increasing reliance on motor vessels was not only a tanker phe-
nomenon, but also related to another structural change in the operation
of the fleet—the gradual reduction of tramp trade at the expense of ships
operating on fixed schedules in dedicated lines. Liner companies were the
royalty of international shipping, vehicles for transport and national pres-
tige in the case of the UK, France and Germany.
58
This is the main point in Thowsen (1983), which—though focusing on Bergen shipping—
through its comparative perspective is perhaps the best source of information on Norwegian ship-
ping in the interwar period.
59
Magnus (1942, 101).
60
Sturmey (1962). Gjermoe (1964, 9–15) suggests that Bergen’s problem was the number of older,
smaller companies, with limited capital, that were based in the city.
116 S. Tenold
As opposed to the tramp trade, the liner trade was not characterized by
free competition and flexible prices. The major liner companies cooper-
ated in “conferences,” cartel-like structures that fixed prices and sailing
schedules and restricted capacity. The Norwegian companies had neither
the financial muscle nor the networks needed to acquire a major position
in the Atlantic trade. However, they managed to build up substantial
niches in various parts of the world, sometimes on their own initiative
and sometimes by initially providing a service for foreign interests, for
instance by time-chartering vessels to foreign lines.
The first lines began as a vehicle for Norwegian exports—not the “third
country”-shipping that had become characteristic of Norwegian compa-
nies. Thoresen’s Den subvenerede Norsk-Spanske Linie [the Subsidized
Norwegian-Spanish Line] relied on a government subvention of 75,000
kroner and the transport of timber and fish to Spain and Italy when it was
established in 1894, and G.M. Bryde’s line to Mexico—the first overseas
line, established in 1908—also received some government support. The
consortium behind the Den Norske Afrika og Australia Linie [the
Norwegian Africa and Australia Line], established 1911, entered into
“peace agreements”—non-competitive clauses—with lines on the
Continent. They were granted a hegemony position in Scandinavia, if
they refrained from picking up cargoes to and from Continental Europe.
When plans for a joint Scandinavian line were shelved, Den Norske
Amerikalinje [the Norwegian America Line] became an almost national-
ist and patriotic project. The first vessel, Kristianiafjord, was launched in
the summer of 1913, with King Haakon VII, the cabinet and a large
number of Members of Parliament among the dignitaries that joined on
the first leg from Kristiania to Bergen.61 The line was not big enough to
challenge the major conference participants, but small enough to be left
alone by the otherwise predatory established lines. Still, before the war,
the scale and scope of Norwegian liner shipping was limited.
In the interwar period the activity in the liner sector increased, and in
his book on the Norwegian liner trade, Dag Bakka jr. refers to the i nterwar
period as “The great expansion.” By 1939 Norwegian shipping compa-
nies operated around 30 different lines. However, the number of
Sebak (2011, 101–124).

61
shipping companies involved in this business was not much larger than
this, as several of the major companies participated in more than one
line—Wilh. Wilhelmsen participated in seven and Fred. Olsen and
J.L. Mowinckels Rederi both participated in four different lines.62
Whaling
Shipping was not the only industry that sent Norwegians to distant
waters. In the second half of the 19th century a whaling community
developed in the Vestfold-cities Sandefjord and Tønsberg, on the western
side of the Oslofjord. Expeditions of 20–40 ships travelled to the coast
outside Finnmark, in the north of Norway, to catch rorquals, finwhales
and blue whales. A central premise for this development was the bomb-
tipped “grenade harpoon,” developed by Svend Foyn and mounted on
small steam vessels—the whale catcher boats. Foyn, who came from a
shipowner family, had trained as a captain and moved on from the trans-
port of wood cargoes to sealing and whaling.
The new technology developed by Svend Foyn, “the father of modern
whaling,” was deadly efficient—a fact that was good for business in the
short term, but harmful in a longer perspective. In 1904 a 10-year mora-
torium was introduced in Norwegian waters due to overexploitation of
the resource—the grenade harpoon had increased the takings and threat-
ened the local stocks. Around this time Norwegian whalers started a mas-
sive global expansion, venturing into both the Northern and Southern
hemispheres and ending up with a leadership position in the Antarctic.
There, land-based whaling stations at South Georgia—referred to as “the
Island” by whalers—were complemented by floating whale factories
around South Shetland.63
In the 1920s, the development of whale factory ships took the industry
into the high seas, independent of shore facilities—what is usually
referred to as “pelagic whaling.” This activity was closely related to ship-
ping along several dimensions. The two industries competed for investors
62
Bakka (2008, 19–42).
63
See Basberg 2006 for an interesting discussion of the economic history of the Antarctic.
118 S. Tenold
and labour, and several individuals—workers, investors and entrepre-

neurs—were engaged in both sectors. There was also an element of com-
plementarity; the main product from the whaling was oil, and the whale
factories could also be used to transport mineral oils.
In the 1920s revenues from whaling were substantial and provided
important export revenues in a generally difficult period. However, with
the improved technology, prices fell and the monopsony power of the
main purchasers created problems. In the 1930–1931 season a total of 41
whaling expeditions, with more than 220 boats, produced more than 3.6
million barrels of oil.64 The Norwegian market share was more than 60
per cent; Norwegians operated five shore stations and 29 floating facto-
ries, supported by a total of 160 catcher boats. The Norwegians caught
more than 25,000 whales, producing almost 2.3 million barrels of oil,
with a value of almost NOK 150 million.
As share of Norwegian production, whaling reached a peak with
slightly less than 5 per cent of GDP in the 1930–1931 season. In the
subsequent season the market for fats was saturated, and most of the
Antarctic whaling fleet was laid up. Production fell from more than 2.3
million barrels to 29,000 barrels.65 When activities were resumed, the
Norwegians lost market shares to other nations. In 1927–1928
Norwegians had produced more than 70 per cent of the Antarctic whale
oil, while 10 years later their share of production had fallen to less than
35 per cent.
In terms of economic importance, whaling was never a challenger for
the shipping sector. Employment was relatively limited—less than 6500
persons at the peak in the 1930–1931 season—and the industry had an
enclave-like position, with only limited spillovers, primarily to shipyards
and mechanical industry. However, the spectacular profits from the
industry during the peak—some years return on invested capital was 50
per cent or more—helped lay the foundation for investments in ship-
ping. Several of the leading Norwegian shipping companies in the 20th
century, particularly in Vestfold, made a mint in whaling and channelled
the profits into traditional shipping. Among those that seamlessly
Tønnessen and Johnsen (1982, 385).

64
Statistisk Sentralbyrå (1968, 184).

65
navigated the waters between whaling and shipping was Anders Jahre—
sometimes referred to as “the Prince of Whales.” Anders Jahre represented
a new type of Norwegian shipowner, with academic merits rather than a
seagoing past. Such a background was common for many of the newcom-
ers in interwar shipping.
The New Breed

The interwar period saw a marked shift in entrepreneurial activity.
Though there were still some captains that went ashore and established
their own shipping companies, an increasing share of the new ventures
were founded by a different breed of entrepreneur—by men with univer-
sity degrees. Education in economics and law replaced practical seaman-
ship as the basis for a number of newly established shipping companies.
This included many of the shipowners who would dominate Norwegian
shipping over the subsequent decades.
The previously mentioned Anders Jahre had a degree in law; in 1922
he started to invest in shipping, and in 1928 many of his shipping inter-
ests were gathered under the Kosmos umbrella. Leif Höegh, the most
expansive of the interwar newcomers, was an economist. Hilmar Reksten,
whose growth after the Second World War became almost as legendary as
his subsequent downfall, was educated at the Handelshochshule in
Cologne. Erling Dekke Næss, who established a shipping empire abroad
and played a key role in the early growth of the Flags of Convenience,
followed his economics degree from the University of Oslo with work in
London, where he was heavily influenced by, among others, John
Maynard Keynes.66
Although the new breed became important, few could challenge “the
old guard,” when new generations were ready to take over. In many of the
66
See Næss (1977, 1981) for two fascinating autobiographical accounts of Erling Dekke Næss’
colourful life in shipping, though with the flaws common for autobiographies. Næss claims that he
started his business career speculating in goat cheese during the First World War. He had good
mercantile genes; his father was a merchant-cum-banker who died young, while his grandfather
was Annanias Dekke, perhaps the most innovative Norwegian shipbuilder of the 19th century; see
Chapter 2.
120 S. Tenold
Table 4.1 The 10 leading Norwegian shipping companies, 1 September 1939,

fleet size and structure
% % %
Name City Est. Ships Grt. motor tankers liners
Wilh. Wilhelmsen Oslo 1861 53 324.000 89 2 98
Westfal-Larsen Bergen 1905 34 208.000 75 50 39
Knut Knutsen OAS Haugesund 1897 25 140.000 91 50 50
A.F. Klaveness Oslo 1869 22 118.000 96 45 47
Fred. Olsen Oslo 1886 53 113.000 66 3 71
Leif Höegh Oslo 1927 13 102.000 100 75 25
Den Norske Oslo 1910 17 101.000 30 0 95
Amerikalinje
Det Bergenske Bergen 1851 51 92.000 36 0 47
Dampskipselskap
J.L. Mowinckels Bergen 1898 16 86.000 77 41 35
Rederi
Fearnley & Eger Oslo 1869 19 75.000 84 23 51
older family-owned companies, the idea of the Wanderjahre at sea for the
successors, common before the war, was increasingly replaced by a period
working onshore. The shipowners’ sons would spend time abroad, gain-
ing experience with other shipping companies or brokers. Another way in
which the shipping sector acquired new talent was via marriage—some
shipping companies explicitly barred daughters from taking over, but
sons-in-law were often welcomed into the family business.67
Table 4.1 shows that the majority of the largest companies at the end
of the interwar period had their roots in the 19th century, and only one
had been established after the First World War.68
With the exception of the Bergen companies Westfal-Larsen and
Mowinckels, and the tanker-focused newcomer Leif Höegh, the majority
of the large shipping companies had 40 per cent or more of their tonnage
in the liner segment. The larger Norwegian companies had the financial
muscle to secure berths in the minor and remote conferences, sometimes
using the provision of tonnage to existing participants as a stepping stone.
They also expanded in the US market, where liner conferences were less
67
See for instance the fascinating example of the identical twins that married into two prominent
Haugesund shipping families in Hammerborg (2011).
68
The table is based on the list in Thowsen (1992, 28).
concerned about capacity. Revenues from the tanker sector were in many
cases important to finance the new liner ships. Only Fred. Olsen and the
two “home-based” lines—Den Norske Amerikalinje and Det Bergenske
Dampskipsselskap—expanded without any substantial revenues from
tanker shipping.
Not All Rosy

Although the interwar period can be considered a successful period for
Norwegian shipping per se, this was an era of rapid transformation, and
abrupt changes typically leave victims in their wake. We find these vic-
tims both among the companies that did not manage to cope with the
changes, and among the seafarers that were unable to find work.
Lay-ups reached their highest proportion of the fleet ever after the
freight market collapsed in 1920, but the overcapacity was relatively
short-lived. Figure 4.4 shows that the overcapacity in the 1930s was more
persistent. Lay-up rates amounted to more than 600,000 dead weight
tons from 1931 to 1934.69
The ups and downs of the business cycle, and the effect of the lay-up
rates above, were partly reflected in unemployment among seafarers.
There were substantial differences in the unemployment rates among
various branches of industry, and seafarers, as well as workers in cyclical
industries such as construction, had particularly high rates. On average,
unemployment rates among seafarers were slightly more than 11 per cent
during the crisis in the first half of the 1920s, but more than doubled, to
23 per cent, in the first half of the 1930s.70 As a result of the lack of a
social safety net, these abstract percentages hide some very real personal
tragedies. Seafarers that were out of work in Norway could often rely on
help from family and friends—the situation was more problematic for
those who were far away from home.
69
Figure 4.4: Calculated on the basis of data in Statistics Norway (1929, 84) and Statistics Norway
(1948, 276). Biannual data have been interpolated for the period 1920–1926.
70
Calculated on the basis of data for 1921–1925 and 1930–1934 in Grytten (1994, 177–178).
Average unemployment for the total labour force was 4.8 and 9.2 per cent, respectively.
122 S. Tenold
1800
1600
1400
1200
1000
800
600
400
200
0
1920
1921
1923
1924
1926
1927
1930
1933
1936
1939
1922
1925
1928
1929
1931
1932
1934
1935
1937
1938
Fig. 4.4 Norwegian lay-ups, quarterly estimates, 1920–1939, 1000 dead weight
tons (dwt). (Source: Calculated on the basis of various statistics from Statistics
Norway. See footnote for details)
Some of the most tragic fates could be found in the borough of

Brooklyn, in New York. Ørkenen Sur [the Desert of Shur, a reference to
Exodus] was a Hooverville where a large number of Norwegian sailors and
ex-sailors found temporary shelter in the difficult interwar years.71 The
Norwegian legislation did not provide them with money to get back to
Norway and, in the crisis years, jobs in the declining American merchant
marine were reserved for the country’s own seafarers. A sailor who stayed
more than 60 days in the United States without specific permission
became an illegal immigrant, and had to watch out for the authorities.
Many of the inhabitants of Ørkenen Sur found solace in the Norwegian
Seamen’s Church in Brooklyn, which had moved into new and larger
premises in 1927.72 They were not alone. By the middle of the 1930s
there were more than 600 unemployed sailors in Brooklyn, and the
71
In the Norwegian translation of the Bible, the desert in which Moses and the Israelites wander
around is called “Sur”. The latter word in the text means “sour” or “bitter”, and there is thus a
dimension that disappears in the English translation. See the fascinating story of the desert and its
inhabitants in Gotaas and Kvarsvik (2010).
72
See Knudsen, 1936, for a contemporary account of the seamen’s churches and the mission among
seamen.
church also saw a steady stream of seafarers from ships that still traded.73
In the church, they would find a reading room, where Tante Klara [Aunt
Klara] served waffles that reminded them of their childhoods.74 Some
would find a letter from home, others would use the free paper and enve-
lopes to write back to Norway. The church was busier than most
Norwegian post offices—more than 100,000 letters arrived there every
year—it functioned as a bank for some seafarers, and a safe fixed point for
even more.
The seamen’s churches are a good example of the substantial network
that had been developed abroad to serve the country’s shipping indus-
try.75 The Norwegian Seamen’s Church—established in 1864—provided
Norwegian seafarers with a link to the home country when they came to
foreign ports. In the beginning the churches were located in the seafarers’
“home waters in the Atlantic”—the first one was established in Leith in
1864, while the first location in North America, beginning 12 years later,
was in Quebec in the summer and Pensacola in the winter. In 1933 the
seamen’s church in Shanghai became the first establishment in the Far
East.76
The churches followed the trade of the Norwegian fleet. In 1927 and
1931, respectively, the churches in Newport and Barry, South Wales,
were closed after more than 40 years—there were fewer Norwegian ships
73
Gotaas & Kvarsvik, 214.
74
Tante Klara, Klara Breivik, from Fana near Bergen, began working at the Seamen’s Church in
Brooklyn in 1926 at the age of 20, and helped and supported “her boys” for the subsequent
37 years. She was a “living legend” among the sailors, known for her ability to remember faces and
names, her compassion and her skills at couronne [carrom]—the poor man’s pool. Another popular
“Aunt”—Noel Lowdness in Vancouver—started voluntary work among seamen, before the
Scandinavian welfare organizations decided to “employ her” at a fixed fee in the middle of the
1950s. She received the Order of St. Olaf for her work, and after she died in 1977 her ashes were
scattered from the Egda, owned by Mowinckels in Bergen; see Pettersen and Brundtland (2003,
79–82).
75
A similar institution was the seamen’s homes, operated by Foreningen for skandinaviske sømand-
shjem i fremmede havne [the Association for Scandinavian Seamen’s Homes in Foreign Ports], estab-
lished 1901 and providing safe sleeping facilities for sober seafarers. See Salvesen (1931) for a
contemporary presentation of the Norwegian institutions abroad and their most pressing
problems.
76
There had been activity in Hong Kong and Shanghai for a couple of years during the boom
around the Russo-Japanese war 1904–1905, but these were closed when “the market” disappeared
a few years later—the number of Norwegian ships calling on Asian ports was more than halved
from 1905 to 1907; see Brautaset and Tenold (2010, 207).
124 S. Tenold
involved in the declining coal trade from the area. The increasing oil
trade, on the other hand, created a basis for new “business” near oil ter-
minals and refineries. Churches were established in Constanta on the
Black Sea in 1935, in Stanford-le-Hope in Essex in 1937, and in
Willemstad on the island of Curacao in 1939. By 1939 there were more
than 25 Norwegian churches in most parts of the world—in Europe,
South and North America, Africa and Asia.77 These provided a holier and
healthier alternative to Sjappa, the local bar or dive, where alcoholic and
corporeal cravings could be satisfied, sometimes at an exorbitant cost in
terms of money and health.
The Great Depression affected all types of shipping, even the relatively
buoyant tanker market. However, in that sector, the limited number of
participants made it possible to arrive at solutions that alleviated individual
problems. Effective from the spring of 1934, an international tanker pool
ensured that owners with laid-up ships were compensated by those with
ships that earned revenues. This solution was the brainchild of Harry
T. Schierwater of the United Molasses Company, Ltd., who became the
first Chairman of The International Tanker Owners’ Association. The pool
functioned well due to the participation of the oil companies, which sup-
ported the idea in order to ensure orderly conditions in the tanker sector.
While the Norwegian shipping industry regained momentum in the
interwar period, helped by yards and finance in Sweden and Denmark,
the domestic shipbuilding industry went through a terribly difficult
period. In the period 1900–1904 Norway had built more ships than
Denmark and Sweden combined, and up until the end of the First World
War the production was higher in Norway than in the neighbouring
countries. Still, Norwegian shipbuilding peaked in 1915, and then the
industry collapsed—in the last five years of the 1930s, production was
lower than it had been in the first five years of the century.78
77
The churches did not have a presence in Oceania until after the Second World War, and the
church in Antarctica (South Georgia) had been closed down after two periods of activity 1912–1914
and 1925–1932; see the overview in Johanson (1989, 113–114). The source confuses “Newport
News” and “Newport”; it is quite unlikely that “Newport News” in Virginia, the United States, was
operated as a subdivision of the Cardiff branch. On the work of the churches in Belgium and the
Netherlands, see Hoel (2016).
78
Aamundsen (1941, 7–9).
The Danish and Swedish yards managed the transition to motorship

building, with a focus on large units, while Norwegian shipyards in the
interwar period relied on repair jobs and the increasingly old-fashioned
steamship technology.79 There are many reasons for the relative decline of
Norwegian shipbuilding, compared with its neighbours, in this period.
Currency developments and tax policy worked unfavourably, the access
to finance and credit might have been more limited than in the the rest
of Scandinavia and unfortunate conditions in the labour market and the
structure of the industry might have played a role.80
Mentioning the relative loss of competitiveness in Norwegian ship-
building is perhaps a typically gloomy, northern European way of consid-
ering the development. In reality, the Scandinavian shipping industry
(spearheaded by the Norwegians) and shipbuilding industry (led by the
other two countries) developed very positively in a period that was
extremely difficult for world shipping and shipbuilding.
The Swedish and Danish expansion was clearly atypical in an interna-
tional perspective. The global shipbuilding industry was strongly affected
by the crisis; in the 1920s, on average, 2.8 million gross tons were
launched. In the period 1930–1938, the average was less than 1.8 million
gross tons.81 Just like the Norwegian expansion within shipping—based
on tankers and diesel engines—went against the international trend, the
growing role of Swedish and Danish shipyards—partly based on tankers
and diesel engines—stood out internationally.
The interwar period was characterized by economic and political tur-
moil. International trade stagnated, the monetary system collapsed and
the attempts at international political cooperation were famously futile.
Against this background, the Scandinavian progress is remarkable.
79
In 1927 only 13 ships, amounting to 4838 gross tons were built—less than a tenth of the tonnage
built in 1907; based on steel ships in Aamundsen (1941, 117–123). In contrast, the Swedish pro-
duction in the early 1930s was more than 10 times larger than it had been before the First World
War.
80
See Basberg (1987) for a comparative analysis. An example of the unfortunate conditions in the
labour market is the fact that in the period from 1921 to 1931, more than two years’ worth of
working days were lost due to strikes; Aamundsen (1941, 28).
81
In fact, Norwegian tonnage launches actually expanded marginally from the 1920s to 1930–1938,
bucking the trend as well. Compared with the growth in Denmark and Sweden, however, the
Norwegian increase becomes poor; see the data in Aamundsen (1941, 117).
126 S. Tenold
The Sagatind Aftermath

In March 1938, President Franklin D. Roosevelt recommended to the
US Congress that USD5000 be spent to settle a Norwegian claim “aris-
ing out of the detention and treatment of the crew” of the Sagatind more
than 13 years earlier.82 In May the American Congress accepted the pay-
ment, “as an act of grace and without reference to the question of legal
liability.”83
When the ex gratia payment was paid out, Sagatind was already his-
tory. The ship had to be broken up after running aground in October
1931 near Fedje, outside Bergen on the Norwegian West coast. Sagatind
was carrying timber from Archangel in Russia to London in the UK.84
Although the loss of the ship marked the end of the shipping company
Friis & Lund, the saga continued in the United States.
The Sagatind compensation was one of the more mundane matters
settled in Congress on 13 May 1938. The subsequent piece of legislation
that the American politicians approved that day was to establish a national
holiday on 11 November, commemorating the day when the First World
War ended. The date was “to be dedicated to the cause of world peace and
to be hereafter celebrated and known as Armistice Day.”85
When the first Armistice Day was celebrated, storm clouds were gath-
ering across the sea. Already Norwegian ships had been involved in dan-
gerous and hostile situations in China—for instance during the Japanese
bombing of Shanghai—and in the Mediterranean, where the Spanish
Civil War affected shipping. On the second Armistice Day, in November
82
The New York Times, 290338, 2.
83
United States, Parliament, Made into law on 13 May 1938; Public No. 509, Chapter 209; “An
act to authorise the payment of an indemnity to the Norwegian Government in full and final sat-
isfaction of all claims based on the detention and treatment of the crew of the Norwegian steamer
Sagatind subsequent to the seizure of this vessel by the United States Coast Guard cutter Seneca on
12 October 1924,” Laws and concurrent resolutions enacted during the third session of the seventy-fifth
Congress of the United States of America, 350.
84
Thorbjørnsen (1946, 44). The cargo was sought after by the locals, and “some salvaged what oth-
ers had already salvaged before them…”; see Asphaug (2000, 264–265).
85
Made into law on 13 May 1938; Public No. 509, Chapter 209; “An act making the 11th day of
November each year into a legal holiday,” Laws and concurrent resolutions enacted during the third
session of the seventy-fifth Congress of the United States of America, 351.
1939, things were far more serious. The major powers in Europe were
again at war.
In the first months of the war, Norway remained neutral, and the situ-
ation was not radically different from the case during the previous world
war. The Norwegian fleet was once again vulnerable, and an important
asset in the fight among the big powers. This time, however, Norway did
not remain neutral for long. After the German invasion on 9 April 1940,
Norwegian shipping entered its toughest—and also most heroic—hour.
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copyright holder.
5
The Second World War
The years from 1939 to 1945 were perhaps the most glorious period of
Norwegian shipping; the aftermath of the war was not a particularly
proud time.
Norway’s neutrality policy was scuttled when Nazi Germany invaded
the country on 9 April 1940, but the fleet—the majority of which was in
neutral or Allied waters and ports—remained outside German control.
Instead, the ships were requisitioned by the Norwegian government, pav-
ing the way for Nortraship—often referred to as “the world’s largest ship-
ping company.” The merchant marine played a vital role in the Allied
fight against the Axis powers—but at a high cost. More than 700 ships
were lost, and around 3700 sailors lost their lives.
In 2012 the thriller-author Jon Michelet’s first novel about Halvor
Skramstad, En sjøens helt – Skogsmatrosen [A hero of the seas – The sailor
from the woods], became a surprising best-seller. The initial print run of
the first book was 5000 copies; by 2015 the first four volumes in the
series had gone on to sell more than 600,000 copies, and the film rights
had been picked up by Norsk Rikskringkasting [the Norwegian
Broadcasting Corporation]. With the series En sjøens helt, Michelet and

134 S. Tenold
the fate of his fictional hero entered the national psyche. In a poll by the
leading newspaper, Verdens Gang, in 2014, to commemorate the 200th
anniversary of the Norwegian constitution, the anonymous Krigsseiler
[War sailor] was voted “The most important Norwegian” since 1814.1
This was not the first time that Jon Michelet—who had trained and
worked as a seaman himself—dealt with the sea, seafarers and shipping in
his books. Previously, the author had presented shipowners as unscrupu-
lous capitalist crooks in his crime novels, with some success.2 This time,
however, the angle was more positive—the seafarer as hero, rather than
the shipowner as scoundrel. In fact, the series about Halvor Skramstad,
Michelet’s magnum opus, had a specific purpose: Michelet wanted to cre-
ate a memorial to the Norwegian war sailors.
Michelet’s books are thoroughly researched, generally well-written and
have a gripping plot. However, their immense success undoubtedly reflects
the manner in which the main topic managed to grab the attention of the
Norwegian public. There are three main reasons that Norwegian wartime
shipping, and the history of the merchant seafarers, appealed to readers.
First, the political situation under which the war sailors rose to promi-
nence was dramatic and provides a proud and powerful backdrop to the
novels. Although Norway was occupied by Nazi Germany, the sailors
were working on behalf of “Free Norway,” aiding the Allied efforts at
high risk. The Norwegian military had to rapidly give up their attempts
at defending the mainland Norwegian territory, but the ships and seafar-
ers continued the fight. The transport of oil and petroleum products was
particularly dangerous and difficult, but crucial to the Allied resistance
and eventual victory. The oil tankers were “the artery of the Allied fight
for victory.”3 Winston Churchill’s alleged claim that the Norwegian sea-
farers were worth more than a million soldiers is an oft-repeated quote.4
1
More than 20,000 people voted in the poll, and the anonymous war sailor got 12 per cent of the
votes—more than twice as much as former Prime Minister Einar Gerhardsen in second place;
Verdens Gang, 030314, 16.
2
See, for instance, his debut Den drukner ei som henges skal (1975) or Panamaskipet (1984), as well
as the play Matros Tore Solem og hans skip (1979), coauthored with Gunnar Bull-Gundersen.
3
Admiral of the Fleet, Viscount Cunningham of Hyndhope, quoted in Rasmussen (1964, 9).
4
The origins of the quote are unsure; it was sometimes referenced to an editorial in The Motor Ship,
and has also been attributed to others rather than Churchill, including the US Admiral Emery
Land (see Lindbæk 1948, 17); Anthony Eden (see Steen 1948, 110); President Roosevelt (see
Vikøren 1986, 3); and Carl Joachim Hambro (see Hambro 1945, 24).
The Second World War 135
Second, as maritime employment was still widespread, many

Norwegians had a war sailor in their immediate family. Moreover, these
seafarers were the Norwegian fighters—both their losses and the tactical
results of their struggles exceeded those of the regular armed forces: “For
the majority of the Norwegian population in Norway during the German
occupation, the war years were a challenge of the more prosaic kind. The
aim was human and material survival. […] Norwegian sailors in the
Nortraship fleet had a different wartime experience. They were at war.”5
Finally, there is an element of shame—maybe a “sin of omission”—
related to how the war sailors were treated after the war. Part of this guilt
is related to the so-called “Nortraship-fund” and the manner in which the
war sailors had to fight for their compensation and rights. Jon Michelet’s
book series paid respect to the seafarers. The readers gave them the hon-
our that they should have received shortly after the war.
The seafarers and the fleet played a crucial role during the Second
World War, as part of the war effort and as a source of funding for the
government in exile. Due to the mobility and global reach of Norway’s
most important export sector, money could be made even though the
country was occupied. The massive revenues from the ships that had been
requisitioned gave the Norwegian government in London resources that
far exceeded those that other countries had.
The funding came at a substantial cost. The seafarers were subject to
terrible pressure, stress and trauma, and many found it difficult to return
to normal life after the war. For many Norwegian seafarers the war lasted
for several decades, as they fought personal battles over and over again.
The Second World War also began earlier for the seafarers than for other
Norwegians.
The Forgotten War

In Norwegian history books, the Second World War reaches Norway on
9 April 1940, with the German invasion. For Norwegian seafarers, how-
ever, the battle had already lasted more than six months. Almost 60 ships
had been sunk and more than 400 Norwegian seafarers had been killed
Hjeltnes (1995, 10–11).

5
136 S. Tenold
by the time the German soldiers started marching on Norwegian soil.

The initial months of the war are commonly referred to as “The Phoney
War”—or even “The Bore War”—due to the shadow-boxing among the
belligerents and the lack of substantial military action. However, for
Norwegian seafarers, the Phoney War was very real.
Initially, both the political situation—a mainly German-British con-
flict with Norwegian neutrality—and the challenges were the same as
during the First World War. The war insurance scheme that had been
established to ensure that Norwegian ships could sail, was disbanded
after the First World War. In 1935 a similar institution, “Den norske
Krigsforsikring for Skib – Gjensidig Forening” was established. On the
very same day that France and the UK declared war on Germany, the War
Insurance Fund, after discussions with the Norwegian Shipowners’
Association, Nordisk Skipsrederforening [the Nordic Shipowners’
Association—which deals primarily with legal issues] and the Norwegian
government, ordered vessels in international waters to seek Norwegian or
neutral ports as quickly as possible, and to await further orders there.
Thus, the charterers lost their right to manage the ship.
A substantial portion of the ships that were redirected were on their
way to British ports—the symbiosis between Norwegian shipping and
British trade was still strong. However, with the change in propulsion of
the Norwegian fleet—from coal-driven steam to diesel-driven motor
engines—a British threat of cutting off the coal supply would not harm
Norwegian shipping as much as during the previous war. Moreover, the
large share of tankers—Norwegians controlled around 40 per cent of the
independent tanker fleet—implied that the ships would be particularly
important for the provision of fuel for the British war effort. So, a neutral
Norway—with a need for provisions—and a UK at war—with a need for
transport—clearly echoed the state of affairs from the First World War.
However, the relative strength of the two parties had definitely changed.
Nevertheless, the practical solutions were similar. The Norwegian
authorities worked behind the scenes, gently pressuring the shipowners
to come to a solution with the UK and urging them to send a delegation
to London to negotiate; “in the game [to ensure essential imports]
Norway could use the Norwegian merchant marine as a trump card.”6
Undersøkelseskommisjonen av 1945 (1945, 55).

6
This required control of the fleet. A licensing system for the signing or
renewal of charters was introduced, ensuring that the authorities had
some control. The Board of the Norwegian Shipowners’ Association
reluctantly introduced measures that gave them the authority to manage
the ship on behalf of the owners.7
An accord with the British was reached in November 1939 when a
delegation—with wide authority—entered into what is referred to as the
Scheme Agreement. The agreement was never formally signed. In order
to protect Norwegian neutrality, it was only initialled and made to look
like a “gentlemen’s agreement.”8 Norwegian shipowners put some 150
tankers—around 1.2 million gross register tons (grt)—at British disposal
at agreed freight rates, as well as around 150,000 grt of tramp tonnage.
This came in addition to tonnage amounting to around 450,000 grt that
had already been chartered to the British, and implied that the Allies had
access to around 40 per cent of the Norwegian merchant marine.9
The access to the Norwegian fleet was important—both the Netherlands
and Denmark refused to enter into similar agreements.10 During the First
World War, David Lloyd George, the British Prime Minister, had pointed
out that “The road to victory, the guarantee of victory, the absolute assur-
ance of victory is to be found in one word – ships; and a second word –
ships; and a third word – ships.”11 As in that war, Norway’s substantial
merchant marine meant that the country could play a decisive role in the
outcome. And during The Phoney War, the situation was very much like
it had been some 20 years earlier. Norwegian ships were neutral—but
7
Thowsen (1992, 58).
8
Nilsen and Thowsen (1990, 24).
9
The exact figures differ between various sources, as some include subsequent additions to the
agreement.
10
While Norway was concerned with its access to British imports, the Danes primarily cared about
access for their exports. Not until the British threatened to close their market for Danish agricul-
tural commodities, did the Danes sign an agreement. Given that the agreement was signed in early
April 1940, around a week before the German invasion of Denmark, it had limited practical rele-
vance. When Denmark capitulated, ships available to the Allies were confiscated. Greece (in
February 1940) and Sweden (in December 1939) also entered into tonnage agreements with the
UK, though the amount of shipping capacity was much lower than in the Norwegian case; see
Thowsen (1992, 88–98) for an overview of the neutral fleet.
11
Address to the American Club in London, 12 April 1917; see Horne (1923, 143) for a
transcript.
138 S. Tenold
leaning heavily towards the west. For Norwegian seafarers sailing in

British convoys in late 1939 and the first part of 1940, there were no
doubts at all about which side they were on.
Another similarity with the 1914–1918 war was the question of naval
strength. The German Kriegsmarine had clear geographical disadvantages.
Control of the sea lanes and other naval concerns were part of the basis
for the German decision to invade Norway in April 1940. German sub-
marines, and in particular the surface fleet, could benefit from the long
and rugged coastline, and use its shelter to challenge the British domina-
tion of the North Sea.12 The invasion was partly a pre-emptive strike—
the Germans feared that if Norway fell into British hands, the North Sea
would be completely closed to them. The strategic role of Narvik, as basis
for winter shipments of crucial Swedish iron ore, also played an impor-
tant part in the German decision to invade.
These tactical factors were hardly a secret at the time, but the Norwegian
preparations for a potential German invasion were nevertheless famously
botched. While the Norwegian merchant marine was for the most part
modern, and impressively so in an international perspective, the opposite
was the case for the Norwegian navy. Of its 63 vessels, only 19 had been
launched after the First World War. The majority—including the four
main warships—had been built in the period 1874–1918, and were badly
maintained. Still, the antiquity of the fleet had some practical advan-
tages—many of the reservists that would be called up had not been
trained for more than two decades, and would have had no knowledge
about how to operate more modern vessels.13
As a result of the limited military potential of the Norwegian naval
defence and the strategic importance of the Norwegian coast, the British
had already intervened and infringed upon Norwegian neutrality. In
February 1940, British forces entered Norwegian waters and boarded a
German vessel, Altmark, which was used to transport prisoners of war.
12
While the submarines could perform the kind of hidden and deadly work they had done during
the previous war, the German surface navy was not impressive. Admiral Raeder, Commander in
Chief and one of the staunchest supporters of the attack on Norway, famously confessed to his
diary that the navy was so weak that it could do no more than “show that they know how to die
gallantly”; see for instance Bird (2006).
13
Undersøkelseskommisjonen av 1945 (1945, 42–43).
Given that Norwegian inspections on three separate occasions had failed

to discover the around 300 prisoners that were hidden in the hold of the
ship, the British double-check was warranted.
The Altmark incident provided Norway with a diplomatic dilemma—
the case was a clear sign that neither of the belligerents really respected
Norway’s neutrality. Slightly less than two months later this became patently
evident. On 8 April British forces placed mines in Norwegian waters, and
a Polish submarine, which was part of a Royal Navy flotilla, torpedoed the
general cargo carrier Rio de Janeiro, a ship full of German soldiers on the
South Coast. The approximately 300 German soldiers on the Rio de Janeiro
were on their way to Bergen. A larger group of around 1000 soldiers were
onboard the heavy cruiser Blücher, which was sunk in the Oslofjord in the
early hours of 9 April. The German invasion was underway.
The Blücher sinking “bought time” for the Norwegian authorities,
including the government and King Haakon VII. They were able to leave
Oslo, and make their way slowly and steadily northwards and then west-
wards. At the beginning of June the king, the crown prince and most of
the government arrived in Scotland. From here, they travelled to London,
in order to follow up on their decision of 7 June to move the seat of gov-
ernment abroad.
Although the royal family and the government escaped, the German
attack—Operation Weserübung—succeeded in gaining control of much
of the crucial infrastructure. Among the first installations targeted by the
forces from the Third Reich were the country’s two short-wave radio trans-
mitters, Bergen Radio and Oslo Radio. These were the main—and fast-
est—means of communication between Norway and the valuable merchant
marine. The Germans used them to send out messages urging Norwegian
vessels to return home or go to neutral ports, preferably in Spain or Italy.14
Nortraship
More than 1000 Norwegian ships were sailing in foreign waters, or
anchored in foreign ports, when the Germans invaded. Around 30,000
Norwegian seafarers were suddenly cut off from their home country, with
14
Thowsen (1992, 102–103); see also Rosendahl (2015).
140 S. Tenold
the connections to their homes and families severed.15 The fact that
Norway refused to bow to the Nazi Germans, made the status of
Norwegian ships and seafarers complex. In the case of Denmark, which
had been attacked at the same time and where the government had capit-
ulated, the British authorities confiscated the vessels and gave them
British flag and British terms. A similar solution was likely for the
Norwegian fleet, until the country joined the Allies and their fight. Then
another dilemma arose: striking the right balance between national and
business interests. It is telling that one of the most detailed books about
the manner in which the merchant marine was operated during the war
has the far from subtle subtitle “Profit and patriotism.”16
Preparations for a solution occurred along two parallel tracks. In
Norway, the government fled north, a few steps ahead of the German
forces. Slightly less than two weeks after the invasion, on 22 April, at a
cabinet meeting held in an old coaching inn, they decided to requisition
the right to use all Norwegian ships larger than 500 grt. The Norwegian
merchant marine would be under government control. The shipowner
Øivind Lorentzen, who had been appointed head of the Shipping
Directorate in 1939, was instructed to go to London as quickly as possi-
ble and oversee the practical matters.
Around the same time, in London, preparations were under way to
build an infrastructure that could control and manage the fleet. By the
time Lorentzen arrived at the end of April, the press had been informed
that the Norwegian Shipping and Trade Mission was about to start its
business. Four hours before Lorentzen arrived, the offices at 144
Leadenhall Street in the City had opened their doors.17 The organization’s
leading managers were Norwegian, but the offices were also staffed with
British and American personnel.
The London office quickly grew out of its rented floor in Leadenhall
Street, and Nortraship expanded both within and outside the building.
Due to lack of space and frequent evacuations during the German air
15
Hauge and Hartmann (1951, iii).
16
Thowsen (1992, 104–107).
17
Thowsen (1992, 57–59). The formal name, the Norwegian Shipping and Trade Mission, was
seldom used; the organization was known by its telegram address, Nortraship.
raids on central London, in October 1940 parts of the activities were

moved to Sunningdale, south-west of the city. The facilities—a former
Italian-run convent—were far more agreeable than those in the crowded
City. Garden parties with friendly competitions—tug-of-war and football
matches between seafarers and office personnel—were held when King
Haakon VII arrived for annual inspections. In 1941 he told the partici-
pants that when he looked at the huge office staff gathered in Sunningdale,
he could “better understand his position as the world’s largest shipowner.”18
The daily operation of Nortraship saw a number of challenges. The
lines of command were difficult due to communication problems. On
the one hand, information was vital to operate the fleet; on the other
hand, it was crucial that this information did not fall into enemy hands.
In the end, the solution became a wide network of branches. By the
beginning of 1944 the Nortraship operation in London consisted of 17
individual departments, some divided into as many as five sections, while
the New York office had one department more. Nortraship had 52 branch
offices or representative offices, affiliated with either New York or London,
in 26 different countries.19
Some shipowners were involved at high levels in the organization, and
had to balance their own and Nortraship’s interests, while others were
stuck in occupied Norway and could not influence what happened to
their tonnage. The Germans had been interested in taking control of the
Norwegian Shipowners’ Association, but the Nazi-friendly owners did
not succeed in taking over until the beginning of 1942. Later that same
year, the occupants started to round up shipowners with “unclear” loyal-
ties—typically those with vessels in the Nortraship fleet and a limited
willingness to cooperate. More than 300 owners withdrew from the asso-
ciation, and a parallel organization was established.20
Among the shipowners working for Nortraship, one potential problem
was that they could make decisions and transactions that would benefit
18
Woxholth (1965, 50).
19
Mossige (1989, 283–289).
20
See Pettersen 1992 for an introduction to the fleet in Norway—“the home fleet”—which made
up 45 per cent of the number of ships, but only around 15 per cent of the Norwegian tonnage. For
an interesting and personal account by a shipowner left in Norway, see Høegh (1970, 30–42).
Given that this book deals with Norwegian shipping in the international market, the home fleet
will by and large be ignored here.
142 S. Tenold
their own interests, rather than Nortraship as a whole. Øivind Lorentzen

was criticized for appointing his son to a central position, and it was also
suggested that the two had led to losses for Nortraship by keeping “their
own” Nopal-line in South America going. After long deliberations, a
government-appointed committee in 1943 concluded that there were
reasons for the criticism of some business decisions, but no basis for any
stronger reaction.21
Another challenge was the ability to ensure cooperation among strong
and powerful individuals who were used to being at the top. Antagonism
between Øivind Lorentzen and Ingolf Hysing-Olsen, who built up the
London office before Lorentzen’s arrival, was partly solved when Lorentzen
moved to New York to manage the organization there. Subsequently a
number of strong personalities tried to find their positions in the organi-
zation. Hilmar Reksten, from Bergen, was an excellent shipping man, but
hardly a diplomat, and was involved in a number of controversies both in
London and New York. Erling Dekke Næss commenced his work in New
York with a handicap: he was viewed with scepticism by many of his col-
leagues, as he had built up his fleet under foreign flag.
Arne Sunde, the only Liberal member of the London Cabinet, became
Minister of Shipping when that post was established on 1 October
1942.22 That placed him neatly in the line of fire between the politicians,
who wanted control of Nortraship, and the Nortraship management,
who wanted as little political involvement as possible. He was also a use-
ful lightning rod in the discussions with the British about the allocation
of the Norwegian ships.
Exile on Broad Street

The international orientation of the United States in the interwar period is
a debated topic. While some claim that the United States followed a policy
inspired by the old British ideas of “splendid isolation,” others claim that
21
See Thowsen (1992, 229–240, 243–248 and 281–288).
22
Sunde had previously been Consultative Councillor of State without portfolio, one of two gov-
ernment members not from the Labour Party, and also headed the Ministry of Provisioning. He
arrived in the UK on HMS Galatea, together with Øivind Lorentzen and around 200 crates of the
gold that had been retrieved from the headquarters of the central bank.
the policy was internationalist, but based on economic involvement—

banks not tanks.23 Regardless of the actual situation before Pearl Harbor,
the Japanese attack changed the duration—if not the outcome—of the war.
Just as the United States tipped the scales when it entered the First World
War, the US entry into the Second World War was a decisive moment.
After that, as Winston Churchill famously remarked: “Hitler’s fate was
sealed. Mussolini’s fate was sealed. [The Japanese] would be ground to pow-
der. All the rest was merely the proper application of overwhelming force.”24
Nortraship had a presence in the United States for a long time before
the Americans entered the war, mainly as a result of the substantial ship-
ping activities in and around American waters. It was difficult to control
this business from London, and uncertainty about the British ability to
withstand the German attacks gave another impetus to establish an office
in the United States. When a division of labour between the two offices
was determined at the end of 1940, the New York office, located on
Manhattan’s Broad Street, was given the task to manage around one-third
of the Nortraship vessels. However, a relatively large proportion of these
ships were “free,” in other words not included in the collective agree-
ments with the Allies. Consequently, the shipping activity—manage-
ment, operation, chartering—was much more differentiated than
business conducted from the London office. However, financial responsi-
bility was delegated to the London office, due to its proximity to the
Bank of England and the Treasury, and in order to facilitate cooperation
with the exiled Norwegian Ministry of Finance.
The operation of the fleet occurred more or less on normal terms.
Similar to during the First World War, insurance was an important cost
factor. The ships were insured through Lloyd’s—conveniently located
just around the corner from Nortraship’s offices in the City. For a while
Nortraship partly functioned as own insurer. Although the idea was that
maintenance should take place as usual, this became difficult when the
demands of the war dictated otherwise. The strict discipline of the con-
voys increased wear and tear, and ships sometimes had to take unsuitable
cargoes. Most ships were issued with special equipment—additional life
boats, armour, guns, protection against mines, and so on.
23
See Braumoeller (2010) for an overview of the debate.
24
Churchill (1950, 539).
144 S. Tenold
The US entry into the war implied that the question of the Norwegian
tonnage became a trilateral problem—British, American and Norwegian
interests all had to be taken into account. In late 1942 the remaining “free”
ships flying the Norwegian flag were to be included more closely in the
Allied operation. During the negotiations, Erling Dekke Næss skilfully
played an inexperienced American (David Scoll) against a slightly arrogant
British representative (William Weston). The end result was the Hogmanay
Agreement, signed on New Year’s Eve 1942 and given the Scottish name
for a new year’s gift. In addition to questions about the chartering and pay-
ment of the tonnage, the agreement took into account questions of market
access and tonnage availability after the war, in particular with regard to
the liner trade.25 This dichotomy between the short-term, strategic and
military goals and the long-term question of Norwegian competitiveness
after the return of peace was a crucial element of the Nortraship experi-
ence; the country was “Allied and competitor.”26
One of the most difficult issues in connection with the Nortraship
organization was the question of salaries. In October 1942, the Prime
Minister and other Cabinet members held a meeting with four members
of the Norwegian Seamen’s Mission’s clergy. Their message to the govern-
ment was that something was afoot among the seamen. The previous year
they had tried to talk to the Minister of Finance about the high salaries in
the London administration. Strong words, like “blood money,” were used
about the salaries that the bureaucrats received.27 The “administrators”
working under relative safe circumstances in the Nortraship offices—
even those outside the war zone—were earning more money than the
seafarers risking their lives in the middle of the war theatre.
The transfers of funds from Nortraship to the government were ini-
tially specified as taxes and tonnage fees. Subsequently, the amounts nec-
essary to balance the budgets were just registered as “Transfer from
Nortraship.”28 In total almost £80 million was transferred from Nortraship
25
See Thowsen (1992, 409–423) and Næss (1977, 112–114).
26
This is the subtitle of Basberg (1993), which succeeds Thowsen (1992) and concentrates on
Nortraship in the period from the beginning of 1943 until the 1964 settlement.
27
Undersøkelseskommisjonen av 1945, Volume I, 1945, 27; pages 118–139 deal specifically with
Nortraship.
28
Undersøkelseskommisjonen av 1945, Volume IV, 1947, 94.
to the Norwegian exile government in the period from 1 July 1940 to 30

June 1945—making up almost 90 per cent of the total government rev-
enues in this period.29 The revenues from Nortraship were important
both during the war and in the reconstruction period. The currency prin-
ciple—that revenues should preferably be in dollars, but expenses should
preferably be paid in pounds sterling—turned out to be very wise, and
created some leeway in a period of dollar shortages.
In addition to these pecuniary considerations, Nortraship had another
important role—one that affected the long-term development and com-
petitiveness of Norwegian shipping. Nortraship enabled the Norwegian
authorities and shipping community to establish or strengthen political
and business links to other Allied countries during the war. Moreover, it
created a sense of unity among those in exile. Shipowners, shipping com-
pany clerks, brokers, lawyers, bankers and bureaucrats shared difficult
times and forged friendships and relations that would be very useful in
the post-war period.
At the end of the war, it was estimated that Nortraship had an oper-
ating profit of approximately NOK550 million. However, this under-
estimated charter and insurance transfers, as well as profits on the sale
of ships that the Norwegian authorities bought from the British during
the war. When the books were finally closed, in the early 1960s, they
showed a profit of almost NOK819 million, almost three times the
value of the gold reserves that were rescued in April 1940.30 The more
than NOK800 million that the authorities received was around 18 per
cent of the total Nortraship revenues. The majority of the around
NOK4.5 billion Nortraship settlement was distributed to the various
shipping companies according to a detailed set of calculations on a
ship-by-ship basis. Among the important elements was insurance com-
pensation for ships that had been sunk, which made up around 31 per
cent of the “costs.”31
As Fig. 5.1 shows, the pattern of loss of life and ships during the
Second World War echoes the pattern during the previous war. There
29
Undersøkelseskommisjonen av 1945, Volume IV, 1947, 95.
30
Norway, Parliament, Stortingsmelding 76 (1963–64) 13–15.
31
See Basberg 1993, 327–345 for a detailed overview of the settlement.
146 S. Tenold
1400
The forgotten war 1940 after 9.4
1200
1941 1942
1000
1943 1944
800
1945 to 8.5
600
400
200
0
Seafarers International fleet Home fleet
Fig. 5.1 Losses during the Second World War, persons and 1000 grt, 1939–45.
(Source: Statistics Norway (2000, 115). See footnote)
was a gradual increase in losses as a result of increasing hostilities,

before a combination of a reduction of the submarine threat and effi-
cient measures, again including convoys, managed to alleviate the
situation.32
Slightly more than 10,000 Norwegians—9379 men and 883 women—
died as a direct result of the war.33 The losses of the Norwegian military
accounted for only one-fifth of this.34 The highest single group of casual-
ties among Norwegians came from seafarers in the merchant marine. At
sea, more than 3600 civilians lost their lives—including 70 women.
Consequently, seafarers made up more than a third of all the Norwegian
deaths. Their sacrifice was extremely important for the final outcome of
the war.
32
Figure 5.1: Based on data from Statistics Norway (2000), Table 116, 115. See the original source
for more information on the basis for the original data. The figures differ marginally from those in
Statistics Norway (1948), Table 131b, 248, mainly as a result off differences in the periodization.
Before the German invasion on 9 April 1940, all ships were registered as belonging to the home
fleet.
33
Based on data from Statistics Norway in Søbye (1999). While around 10,000 Norwegians lost
their lives at home and abroad as a direct result of the war, around 13,000 Russian and almost 3000
Yugoslav prisoners of war lost their lives on Norwegian soil; Fure (1999, 37).
34
In addition to the 2000 deaths in the Norwegian military, almost 700 Norwegians died while
fighting for “the other side” on the Eastern Front.
Peacetime: Rebuilding the Fleet

When the war in Europe was over, the challenges facing the Norwegian
shipping industry were substantial. Half of the fleet was gone, and the
remaining ships were not in good shape, as maintenance had not been a
priority during the difficult period. When the war ended, it had not been
decided when the ships would be returned to the owners or how and
when the outstanding balances would be settled. While the shipowners
were interested in regaining control of their tonnage as soon as the war
was over, it was evident that the political desire—at the international
level—was to maintain strategic command of the merchant ships. The
aim was to ensure rational and efficient management of the world fleet,
thus aiding the relief and rebuilding efforts.
According to an agreement from the late summer of 1944, the United
Maritime Authority (UMA) would coordinate the merchant marines of
important Allied countries for a period of six months after the end of
the war. The new intergovernmental organization commenced their
operations in May 1945, but for the first months the Norwegian ships
remained requisitioned by the authorities. In October, the ships were
time chartered on “UMA-terms” to the authorities. Two shipowners
that had fled from Norway during the last stages of the war, Fredrik
Odfjell and Leif Høegh, represented Norway in the United States and
the UK, respectively. The choice of two “industry men” as Norwegian
representatives in the executive of this important intergovernmental
and bureaucratic organization says something about the Norwegian
authorities’ experience with and trust of shipowners following the five
years of cooperation abroad. This kind of delegation would be quite
common throughout the post-war period—even when there was mas-
sive discussion and disagreement about domestic matters, the authori-
ties let the shipowners’ delegates represent the country in several
international institutions.35
John Oscar Egeland, one of the most prominent industry “insiders”
and Director of Norges Rederforbund 1948–1953, sketched two main
35
Egeland (1971, 18).
148 S. Tenold
tasks for the shipowners after the war. The first was to regain control of
their tonnage as soon as possible. The second was to obtain new vessels to
compensate for the wartime reductions in the fleet.36
The main problem was of course the major losses during the war. There
had been some minor additions to the fleet. Twelve Liberty-ships, general
cargo carriers of around 7000 gross register tons (grt), four smaller C1-A
general cargo carriers and eight T2-tankers of around 10,000 grt had
been transferred from the United States in the period January 1943–
April 1945 as part of the Lend Lease agreement.37 However, although
Norwegian shipowners bought an additional 46 Liberty ships from the
US after the war, and another eight second-hand from owners in Denmark
and Panama, both the relative and absolute position of Norwegian ship-
ping was severely deteriorated.38
Still, there was undoubtedly a role for shipping in the Norwegian
economy. A 1947 newspaper article points out that shipping “is a dream
investment” in a national perspective as it has “a high turnover and high
revenues for the country, with only a modest need for labour.”39 The
authorities subscribed to this idea. After the war, the rebuilding of the
fleet became a national priority. The Labour government—which took
over in 1945 supported by an absolute majority in the Parliament—gave
precedence to industries that could neutralize the deficit on the Balance
of Trade and thus secure valuable foreign currency, in other words US
dollars. The mainstay of this policy, in addition to shipping, became
export-oriented and energy-intensive manufacturing.
The idea of shipping as a key industry in Norwegian policy-making is
a stark contrast to a 1953 paper by the leading shipping lobbyist—chief
economist Johan Seland of Norges Rederforbund—who painted a really
grim picture: shipping’s role in the Norwegian economy had declined.
Norway’s position in world shipping in general, and within tanker trans-
ports in particular, was weaker than before the war. Shipping companies
36
Egeland (1971, 17).
37
Basberg (1993, 176–177). In total, more than 500 ships were transferred from the United States
to other Allies. Two countries received more than Norway’s 24 ships—341 vessels were transferred
to the UK and 93 went to the Soviet Union.
38
Fon (1995, 73).
39
Verdens Gang, 190347, 6.
had serious financing difficulties and even if markets were good, they
would see their capital depleted.40 Moreover, the Norwegian tax regime
was worse than in any other shipping nation, and this forced shipping
companies to increase their debts, according to Seland.
What had happened between 1947 and 1953 that gave such different
results?
A crucial element of economic policy is striking the right balance
between the power of the state and the freedom of individual economic
agents. Nortraship and the war experiences had shown that in special
circumstances there were reasons to tilt this balance strictly to one side.
In the first post-war decades, the authorities in Norway took on a much
more active role in economic development than they had done before the
war. This was a development that was similar to most European coun-
tries. However, in Norway the coalition between interventionist politi-
cians and bureaucrats with a strong belief in planning was more powerful,
and lasted longer, than in most countries in Western Europe. One reason
for this was the broad support for the Labour Party [Arbeiderpartiet] in
the post-war elections.
With the gradual rebuilding of Norway, and of the world economy,
access to foreign currency became one of the main concerns of the
authorities. Export revenues were lower than before the war, while pur-
chases abroad were larger, and the central bank had been forced to reduce
its reserves in order to purchase the dollars needed to finance imports.
The rebuilding of the merchant fleet was one of the main expenses abroad,
but this was initially a desired development. The shipping industry was
expected to play a key role as an earner of foreign exchange, and in 1945
and 1946 Norwegian shipowners were allowed to “buy or order all the
tonnage that they desired [and] practically all requests for currency to
buy ships were granted.”41 In total, around NOK2 billion—more or less
equal to the currency reserves earned by the merchant marine during the
war—were granted. The authorities were involved as buyers, mediators
and distributors, in addition to providing guarantees.
40
Seland (1953, 5–6).
41
Thowsen (1986, 11–12). Thowsen’s article is one of the most comprehensive reviews of the recon-
struction of the Norwegian fleet after the war, with a particular emphasis on the political side,
including the licensing regime.
150 S. Tenold
By the end of 1946, the fleet was back at the pre-war level, but only
when newbuilding contracts are included. However the revenues from
shipping failed to live up to expectations. There were two reasons for
this. First, the smaller fleet—contracts do not make money—and a high
proportion of relatively outdated ships, had a negative effect. Second,
the freight rates were controlled for some time after the war, and due to
the new tonnage built during the war, there was no post-war boom.
In the minds of the bureaucrats and politicians, the shipping sector’s posi-
tion was one important reason for the reduced foreign exchange reserves.
The currency regulations that were used to the benefit of Norwegian ship-
ping immediately after the war were now used to reduce growth. For ship-
ping companies, their access to financing came to be dependent upon a
number of features, including war losses, revenues from vessel sales and the
markets in which the ships operated—those that ensured freights were paid
in dollars were preferred. The restrictions that the authorities introduced
clearly favoured the large Norwegian shipping companies, in particular
those that were engaged in the liner trade. The Sterling Crisis in 1947—
where the premature convertibility of the British pound revealed the extent
of Europe’s dollar difficulties—made the authorities apprehensive.
In the autumn of 1947 the licensing of new contracts abroad was
stopped temporarily. The possibility of ordering ships was resumed after
a while if the owner could—through vessel sales abroad or freight reve-
nues—ensure that the contracting did not create a need for foreign
exchange. This period of access to “currency neutral” financing lasted
until March 1948. Subsequently, there was sporadic granting of licences,
before a full contracting ban was introduced in 1949 and 1950—
Norwegian shipping companies were simply not allowed to order ships
abroad.
The rebuilding of the merchant fleet was at the centre of the debate
about the authorities’ right—and ability—to direct the economy. Some
wanted more control, others less. A Communist Member of Parliament,
Emil Løvlien, suggested that the government had given up control of
economic policy, and transferred policy design to the shipowners.42 The
Norway, Parliament, Forhandlinger i Stortinget No. 70, 15 April 1948, 550–557. Løvlien’s speech
42
was so long that the Parliament had to break for lunch. When they returned from the meal, he
warned against the “completely dangerous” Marshall Plan, “a morphine injection” that should be
subsequent year, when the restrictions on contracting had been intro-

duced, a member from the Farmers’ Party [Bondepartiet] was extremely
critical about how the authorities dealt with business and the private sec-
tor. Probably inspired by Friedrich Hayek’s recent writings, he suggested
that the ban was the start of a road that would ultimately lead to “a
bureaucratic, state-directed dictatorship.”43
The restrictions that the Labour government had introduced were
extremely harmful, according to the shipowners and the Conservatives.
Initially their opposition was limited—the state of the market did not
encourage new orders anyway. However, when the shipping market
boomed in the early 1950s as a result of the Korean War, the criticism was
massive: the ban on contracting had enabled Greeks to take over profit-
able tanker contracts. The focus on liner vessels, with stable rates, had
displaced investments in ships for more lucrative markets. The govern-
ment had destroyed the competitiveness and profitability of Norwegian
shipping.
In response to these accusations, the government was quick to point
out the privileged access to foreign exchange that shipping had in the
immediate post-war years. They saw the restrictions as a necessary mea-
sure aimed at averting an acute currency crisis. The end of the ban in
1951 unleashed a rush of new contracts, but by then newbuilding prices
had increased dramatically and the waiting time for delivery was long. In
the end, the ships were delivered when the boom was over.
Aftermath: Rehabilitation of the Seafarers

Norwegian soldiers returning from abroad and the members of the
Hjemmefront [Home resistance] were welcomed as heroes in May 1945—
there were parties and public parades, flowers and flags. The war sailors
avoided. At the time, Løvlien was one of 11 representatives from Norges Kommunistiske Parti [the
Norwegian Communist Party], which had received 11.9 per cent of the votes in the 1945 election.
Arbeiderpartiet [the Labour Party] had an absolute majority, with 76 of the 150 representatives,
after receiving 41 per cent of the votes. In 1957 Løvlien became the last Member of Parliament to
be elected on the Communist Party ticket.
43
Gabriel Moseid in Norway, Parliament, Forhandlinger i Stortinget, 22 March 1949, 477.
152 S. Tenold
did not receive such a warm welcome—they basically returned unan-

nounced, without a fanfare. Some arrived in the spring or summer of
1945, some arrived that autumn, others in 1946 or even 1947. Most of
them arrived according to their ships’ schedules. Some stayed abroad,
having established relations in Canada, the United States or the UK,
while others had to wait until they could find a Norwegian ship to take
them home. In the first post-war period, passenger ships were usually
reserved for the movement of troops, but one exception was when more
than 800 war sailors—all injured or ill—arrived in late July with the
steamship Bergensfjord.44
The vessel Bergensfjord is itself an illustration of the action-filled war
years; the ship was rebuilt to carry troops and transported some 165,000
passengers—soldiers, prisoners of war and refugees all over the globe.
Travelling more than 300,000 nautical miles—equal to 14 times around
the Equator—“Lucky Bergensfjord” moved in dangerous waters and was
on the front line during the invasion of Sicily.45 The ship’s seafarers—
both the crew and its injured and ill passengers—had been in the line of
fire for more than five years. It was a war experience that was very differ-
ent from what most Norwegians had been through.
At the start of the war, Norwegian seafarers had been paid for their
high-risk work. Before the Nazi invasion, they received a war-risk pre-
mium that could be up to 300 per cent of their basic salaries, depending
on the zone in which the ship was sailing. In June 1940, after Norway
entered the war, the British demanded that the wages of Norwegian and
British seafarers should be aligned. As a result, the war-risk bonus was
reduced to NOK100 per month. For ordinary seamen this implied a
decline of up to NOK500 per month, for captains as much as NOK3000.
Although the war risk did not disappear, the premiums apparently did,
to appease the British. Given that the premium reduction was an advan-
tage to the British charterers, one shilling per dead weight ton per month
was deposited into a special account, to be used “for the benefit of the
seamen after the war.”46 This account is often referred to as “Nortraship’s
44
Virkesdal (1991, 17).
45
Ljone (1982).
46
Hodne (1992, 174).
secret fund,” as it was important that British seafarers did not know that
their Norwegian colleagues were paid more. For the Norwegian seafarers,
the fund was “a public secret.” After the war, the existence and use of this
fund was shrouded in controversy. By the end of 1947 the fund, includ-
ing interest, amounted to almost NOK44 million. Who did the money
belong to?
A government committee headed by Arne Sunde and with participa-
tion from the four major maritime unions, in 1947 suggested that the
money be used for widows and children of seafarers that died during the
war, ill and disabled seafarers, older seafarers, and so on. This solution was
accepted in Parliament the following year. But parallel with this, a group
of war sailors were fighting in the courts, arguing that the money in “the
secret fund” belonged to them, and consequently should be divided
among those who had participated.
In 1954 the Supreme Court rejected the seafarers’ case. However,
media pressure in the late 1960s and early 1970s led to a revitalization of
the question, and in 1972 Parliament awarded an ex gratia payment of
some NOK155 million to the war sailors and their surviving relatives. It
is very unfortunate that Nortraship—this well-functioning mixture of
private ownership and government intervention, of profit and patrio-
tism—is most famous for its “secret fund,” which tainted the seafarers’
post-war relations with the shipowners and the authorities.
The fund was only one of the many difficult fights that the Nortraship
seafarers had to deal with after the war. An everyday example is the fact
that some of them had been abroad for so long that they had been
removed from the electoral roll. In other words, those who had fought for
Norway’s freedom were not allowed to participate in the Parliamentary
elections. Others were asked to prove their patriotic attitude, or were
called up for compulsory military service, after more than five years on
the front line.47
Some questions were dealt with in a more pragmatic manner. In many
instances, families in Norway had been paid while the breadwinner was
abroad. This implied that the seafarer could owe money to his employer
47
See Virkesdal (1991, 15).
154 S. Tenold
when he returned, if he had not “sailed enough” to cover the advances.

Shipowners would often quietly “forget about” this, and redeem the
debts.
The Norwegian authorities were less forthcoming. War sailors received
lower pensions than soldiers and those that had been prisoners in
Norway—a Parliamentary minority suggested that seafarers should not
receive war pensions at all. The term “war sailor syndrome” was coined, a
variety of the “KZ syndrome” that affected those surviving the concentra-
tion camps.48 Symptoms included difficulties in adapting to normal life,
nightmares, angst, depression, lack of concentration and insomnia. The
journalist, Oddvar Schjølberg, refers to this as “the eternal war of the war
sailors.”49
Norwegian seafarers and bereaved families had to fight Norwegian
bureaucrats for their rights, and years and even decades passed before
they were given recognition and compensation. Up until the late 1960s,
they had to prove that their problems were a direct result of the war, in
order to receive war pensions. In 1968, the burden of proof was reversed:
the authorities had to prove that there was no causality between the war
and the health problems.50 As Jon Michelet phrased it: after the war, “we
rebuilt the country, but not the people.”51
When Norway was invaded in April 1940, around 3200 foreign seafar-
ers worked on the ships that were about to become the Nortraship fleet,
and during the first years of the war the proportion of foreigners increased
from 12 to 25 per cent. Almost 1000 foreigners lost their lives while
working on Norwegian ships. They came from 36 different nations, and
the largest losses of lives were among British (323) and Chinese (252)
seafarers.52 The compensation that was paid out was arbitrary, if paid at
all. Many received ex gratia payments—money given based on goodwill,
rather than legal claims—others received nothing.
48
See Askevold et al. (1976), Hartvig (1977) and Hansson (1967).
49
Schjølberg (2014).
50
On the struggle to get the right to receive war pensions, see Hjeltnes (1997, 458–474).
51
Aftenposten, 05102013, 2–3.
52
The information on foreign war sailors is mainly from Rosendahl (2017). In addition to people
from 36 different nations, one stateless person lost his life; Jan Alexis Molotov died when MS
Fernhill was sunk by a submarine in August 1942.
The manner in which Norway treated the war sailors was not particu-
larly appreciative. But the neglect gradually became evident, and an apol-
ogy from the Minister of Defence was made in public: “The story of our
war sailors is a shocking narrative. About a society that was not properly
prepared to take care of some of the biggest war heroes. About rejection
and denial. You, the war sailors, should not be blamed – you expected
that society would appreciate your efforts. But you were disappointed. As
a society, we let you down. Today I therefore apologise, on behalf of the
Norwegian authorities, for the treatment that war sailors were subject to
after the war.”53
The Minister of Defense was Anne Grethe Strøm-Erichsen from the
Labour Party. The year was 2013. For the vast majority of the war sailors,
the apology came too late.
The Hall of Remembrance for Sailors [Minnehallen] outside Stavern
was unveiled in 1926 to commemorate the Norwegian sailors that died
during the First World War. The names of fallen sailors are inscribed on
a series of copper plates, and after the Second World War almost 3500
names were added to the 1748 from the First World War. The last addi-
tion came on 8 May 2017, when 956 names of foreigners were added.
Among those that financed the new plates were the Norwegian
Shipowners’ Association and other companies and foundations in the
Norwegian shipping industry. Another important financial contributor
was the author Jon Michelet, who has shown how powerful literature can
be in shaping our knowledge and ideas about the world in which we live
and die.
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Tidsskrift for Den Norske Lægeforening, 96, 868–872
B.L. Basberg (1993) ‘Nortraship – Alliert og konkurrent’, Handelsflåten i krig 2
53
Minister of Defense, Anne Grete Strøm-Erichsen’s speech given when the monument honouring
the war sailors was unveiled, 030813. [regjeringen.no/no/aktuelt/mote-med-krigseilere-og-
parorende-risor/id733139/] [Read 051017].
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P. Hartvig (1977) ‘Krigsseilersyndromet. En undersøkelse og en diskusjon av
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L. Høegh (1970) I skipsfartens tjeneste (Oslo: Gyldendal)
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E. Mossige (1989) Storrederiet Nortraship – Handelsflåten i krig (Oslo: Grøndahl)
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158 S. Tenold
right holder.
6
Bigger and Bigger: Shipping During
the Golden Age, 1950–73
Hvor seiler vi? [Where are we sailing?] was a series of four programmes
aired in late 1969 by Norsk Rikskringkasting. The TV series was not what
we would consider classic Friday night entertainment, but rather the
kind of programme that could only be broadcast in a country with
a single state-owned television channel. In a curious mix of entertain-
ment and public education, the programme presented some of the main
European ports frequented by Norwegian sailors. The programme-
makers—including Gunnar Bull-Gundersen, who had a background as
welfare officer in the merchant marine—visited the main European port
cities, Antwerp, Amsterdam, Rotterdam and London, sending home very
vivid portrayals of the sailors’ lives there.
Norwegian sailors, and employees in the local “entertainment indus-
try” that had been set up to serve them, were interviewed in bars that
could at best be considered dives. Both the interview subjects and the
interviewer were frequently filmed with a beer and a cigarette in hand.
Among the highlights of the programmes was a five-minute story, in bro-
ken Norwegian, where a Dutch bar hostess in Antwerp explained that she

160 S. Tenold
knew what to do with drunken sailors—she would beat them up when-

ever they were slow to pay their debts.1
In the ports were parallel Norwegian societies, made up of uteseilere
[sailors based abroad]—seafarers that for various reasons seldom or
never visited their home country.2 Rather than going back to Norway,
they frequented bars—often offering accommodation as well—with
local names such as Bergen Bar, Tønsberg Bar, Telemarken, Café
Måneskinn [Moonshine], Café Solskinn [Sunshine] and Café Håpløs
[Hopeless].
Uteseilere were sometimes portrayed as a romantic group, with “saltwa-
ter in their veins” and a carefree life from port to port, with a drink in one
hand and a local girlfriend in the other. However, the sailors interviewed
in the TV series—both those based abroad and those still living in
Norway—lamented the manner in which the shipping sector had devel-
oped. Specifically, the effects of the technological development on seafar-
ing life were presented as problematic. Due to the improved efficiency of
shipping, in particular with regard to loading and unloading, long stays
in exciting port cities had been replaced by very brief stopovers at isolated
and uninteresting terminals: “Those who dreamt of experiences in for-
eign ports, did not meet anything but the dreary reality of the eternally
long oil pipes.”3
Rather than a lively port city, the sailors frequently found themselves
in places such as Europoort, “30 kilometres from Rotterdam and seven
kilometres from the closest neighbour.”4 The Norwegian seamen’s
church even constructed a chapel there, functioning as an annex to the
main church in Rotterdam, because the mobility of the seamen was
1
The Dutch bar hostess, married to a Norwegian and working in a seamen’s bar in a Belgian port
city, is an illustration of the truly international environment that seafarers were exposed to, in a
period where travels abroad, whether for business or pleasure, were far less common than today.
2
A somewhat caricatured presentation of an uteseiler was someone who signed off in foreign ports,
and stayed there—drinking heavily—until money issues or other problems forced them to sign on
a new vessel. The TV series aimed at nuancing this picture, but was criticized for the decision to
interview and portray sailors in typical red light district bars, rather than in the local seamen’s
church. One critic suggested that every one of the 32 Norwegian seamen’s churches abroad should
have been visited, in order to give the programme the right balance; Gundersen (1970, 10).
3
Gundersen (1970, 77).
4
NRK, “Hvor seiler vi,” 271169.
Bigger and Bigger: Shipping During the Golden Age, 1950–73 161
increasingly limited. Rationalization and new technologies also implied

that life on-board had become more isolated, with fewer colleagues and
more solitary work. For the modern seafarer, the physical hardship in
the masts or the engine room had been replaced by the mental strain of
a lonely life.
In the first post-war decades, two technological trends worked together,
and both had a numbing effect on seafaring life. First, vessels became
larger and larger, which explains why they had to anchor up in more
remote areas. Second, the ships became more specialized, purpose-built
to transport a relatively small variety of goods. By designing vessels that
were specialized for specific cargoes, the loading and unloading became
much more efficient. The time spent in port declined from weeks to days,
and as port time was reduced, the monotonous days at sea became more
plentiful.
Both of these technological trends were possible as a result of the grow-
ing volumes of seaborne transport. The first post-war decades saw a strong
increase in world trade. The world economy had clearly rediscovered the
growth momentum that had been lost in Sarajevo more than three
decades earlier.
The Golden Age

With two devastating wars and The Great Depression, Europe had squan-
dered much of the potential for income growth in the first half of the
20th century. Figure 6.1 provides a visual representation of economic
growth in the 20th century, which reveals the manner in which decades
of potential growth were lost to fighting and crisis.5 The dotted line rep-
resents the average long-term growth rate of Gross Domestic Product
(GDP) per capita in Western Europe. This growth—1.87 per cent annu-
5
Figure 6.1: author’s calculations based on data from The Maddison Project, http://www.ggdc.net/
maddison/maddison-project/home.htm, 2013 version. The long-term average growth rate is the
compound growth-rate found when interpolating the development from 1900 to 2000. The data
refer to GDP per capita in 1900 International Geary-Khamis dollars, implying that they are
adjusted for inflation and based on purchasing power parity. The 12 Western European countries
included in the sample are Austria, Belgium, Denmark, Finland, France, Germany, Italy, the
Netherlands, Norway, Sweden, Switzerland and the UK.
162 S. Tenold
25
12 leading countries in Western Europe
20
Long-term average (1.87%)
15
10
0
1909
1918
1939
1948
1978
1987
1900
1903
1906
1912
1915
1921
1924
1927
1930
1933
1936
1942
1945
1951
1954
1957
1960
1963
1966
1969
1972
1975
1981
1984
1990
1993
1996
1999
Fig. 6.1 GDP per capita, long-term trend and actual development (1000 1990
Int.$), 1900–2000. (Source: The Maddison Project, see footnote for details)
ally—is the rate at which the economy would increase if there were no
fluctuations and the values for 1900 and 2000 were fixed. The solid line
shows the actual growth of GDP per capita. The difference between the
two lines at a given point in time shows the degree to which the develop-
ment thus far had deviated from the long-term trend.
At the start of the First World War, the income level in Western Europe
was around 6.6 per cent lower than “predicted,” but when the war ended
this gap had increased to more than 28 per cent. After large fluctuations
in the interwar period, the gap was reduced slightly by the outbreak of
the Second World War, before plummeting to almost 47 per cent in
1946. In other words—GDP per capita after the end of the Second World
War was only slightly more than half of what we “would expect” based on
the long-term growth rates.
The destruction of two wars and the economic turbulence of the inter-
war period left Western Europe with an enormous “catching-up” poten-
tial. During the period in which this potential was fulfilled, the countries
went through a period where living standards and production grew at an
unprecedented pace. By 1973 the income level was more or less back on
track, having grown almost 4.25 per cent annually. After 1973 the eco-
nomic growth fluctuated around the long-term trend; a return to normal
conditions implied that it would be difficult to repeat the spectacular

growth spurt seen in the first post-war decades.
The first decades after the end of the Second World War are frequently
referred to as “the Golden Age” in Western Europe and Japan; the
Germans had their Wirtschaftswunder, the French had their Les Trente
Glorieuses, and the Japanese their “economic miracle.” Only the British
remained in the quagmire of low economic growth. What can account
for the exceptionally high economic growth in Western Europe in the
first decades after the war?
The production possibilities in the middle of the 1940s were severely
affected by the war damage. As seen in Fig. 6.1 the European GDP per
capita was substantially below its “potential.” The destruction of build-
ings and production capital and the fact that markets for labour, capital
goods and services did not function well, meant that production was
inefficient. From the late 1940s onwards, Western Europe was like a tal-
ented athlete coming back from a long-term injury—so progress was
likely to be swift and sustained. As new technologies and organizational
methods were introduced and markets were revitalized, higher efficiency
followed. In most Western European countries productivity improve-
ments were the main driver behind the high growth.6
These productivity improvements were also related to the rebuilding
of the international economy. Governments in the leading industrialized
countries were willing to go far to avoid a repetition of the dangerous
economic nationalism and “beggar-thy-neighbour” policies that had cre-
ated problems in the 1920s and 1930s and ultimately paved the way
for the Second World War. The means to avoid such problems was an
institutionalized world economy. With the United States in the lead, a
liberal economic world order was established, built around policies and
institutions that fostered collaboration and joint support.7 Multilateral
6
See for instance the analyses in Temin (1997) or van der Wee (1986).
7
This is of course only one side of the story; the Western one. An important element is the
Communist counterpart—The Warzaw Pact, The Council for Mutual Economic Assistance, and so
on. The policies in the Soviet Union and its Eastern European satellites turned out to be an unsuc-
cessful—even disastrous—experiment in the long term. However, the Eastern Bloc and its Cold
War threats were an extremely important catalyst for the integration in Western Europe and the
capitalist world.
164 S. Tenold
institutions such as the International Monetary Fund (macro-economic

policies), the International Bank for Reconstruction and Development
(aid) and the General Agreement on Tariffs and Trade (trade policy lib-
eralization) were established to oversee the smooth functioning of the
international economy. Moreover, the European Recovery Program,
usually referred to as Marshall Aid, kick-started a period of rapid and
sustained improvement of incomes and living standards in Europe.
The period from 1950 to 1973 was characterized by high—and
extremely stable—economic growth rates. In a situation with controlled
inflation and low unemployment, Western Europe was one centre of
growth in the world economy; the other was East and Southeast Asia,
where the Japanese economic miracle of the 1950s and 1960s was fol-
lowed by a handful of other “miracles” that focused on export-led growth
and managed to mobilize resources on an impressive scale.
The strong growth of Japanese manufacturing affected shipping in two
ways. First, Japan influenced transport demand: it imported the majority
of raw materials used in manufacturing, which was then exported as fin-
ished goods—all the while needing shipping space. Estimates suggest
that in the late 1960s Japanese demand made up 75 per cent of world
coal transport, 60 per cent of iron ore transport and 20 per cent of grain
transport.8 Second, the expansion of shipbuilding was an important
ingredient in Japanese industrialization. In 1956 Japan surpassed the UK
as the world’s leading shipbuilder, and by the early 1970s more than half
of the world’s ships were built in Japan.9 The Japanese expansion within
manufacturing pushed up the demand for shipping, and at the same time
the Japanese built the ships needed to satisfy this demand.
In the first post-war decades world trade increased substantially. Trade
liberalization was complemented by productivity-induced reductions in
seaborne transport costs. Trade growth is of course extremely positive for
shipowners. However, in addition to the volume of trade, the means of
8
Alderton (1973, 78) quoted in Fon (1995a, 134).
9
See Murphy (2013) for an introduction to the spectacular British decline. Shipbuilders in the UK
were closely related to the domestic shipping industry. Among their foreign customers, the
Norwegians stood out, but the ships provided by British yards were increasingly mismatched with
the demands of the Norwegian owners. The British loss of the Norwegian market is discussed in
Johnman and Murphy (1998).
transport and the development of average distances is important—and

both developed positively from a shipping point of view. Another impor-
tant shift was the increasing reliance on oil as a source of energy and as an
input in manufacturing. The strong growth in the transport of oil—the
vast majority of which was seaborne—resulted in a transformation of the
world fleet, where tankers became much more important.
In the second half of the 1960s the increasing demand for seaborne
trade was further amplified by the longer average sailing distances after
the 1967 closure of the Suez Canal. When the oil tankers to and from the
Persian Gulf were forced to go around the Cape of Good Hope, average
distances increased. Rather than a 6000 mile, 36-day roundtrip via Suez,
tankers going between the Persian Gulf and Europe were subject to a
12,000 mile, 60-day roundtrip. From 1966 to 1973, the length of the
average voyage undertaken by crude oil tankers, increased by 40 per
cent.10
There was a positive feedback loop between the development of
shipping demand and supply. Trade liberalization and growing trade
volumes lowered unit transport costs as they enabled the utilization of
economies of scale. At the same time, the lower unit costs led to a
reduction of freight rates, thus reducing transaction costs and encour-
aging further growth in exports and imports. This development had
implications for shipping, and also for the manner in which shipping
services were produced.
Once again, Norwegian shipping could grow on the back of a rapidly
expanding international economy, just like it had done in the second half
of the 19th century. The adaptation to the international market was,
however, diametrically opposite of the profitable strategy in the previous
century. Then, low-paid sailors operated relatively cheap, old-fashioned
and inferior ships financed by a limited Norwegian capital base. In the
1950s, and particularly in the 1960s, high-cost Norwegian seafarers oper-
ated one of the most modern and expensive fleets, where the labour-cost
disadvantage had been neutralized by means of economies of scale and
costly technological solutions.
10
Average distance growth calculated on the basis of Tables 1 and 2 in Fearnley & Eger Chartering
Co.’s Review, various issues. For a discussion of the geography of maritime trade, see Stopford
(2009), Chapter 9 and Knowles (2006).
166 S. Tenold
echnological Development After the Second

T
World War
Before we look more closely at the Norwegian experience, we should say
something about the basis for the dramatic changes in the world fleet in
the first post-war decades. The 1950s and 1960s were two decades of
great innovative activity and rapid technological development. Shippers,
shipowners, naval architects and shipyards worked together to revolu-
tionize seaborne transport. The old “jacks of all trades”—the general
cargo carriers—became increasingly unfashionable and were replaced by
ships dedicated to the carriage of identical containers, or purpose-built
vessels that carried large volumes of the major cargoes.
Innovations are often introduced as a response to bottlenecks in the
production process, but usually end up creating new bottlenecks at other
stages—the see-saw process between spinning and weaving in the 19th
century textile industry is a typical example. In shipping, technological
improvements have taken place within a complex framework, where at
least four dimensions have to be considered before innovations can be
introduced; the trade, the ship, the port and the inland infrastructure.
The basis for practically all international seaborne transport is trade.
Countries trade because of price differences, arising as a result of resource
endowments or variations in production costs or demand. Large price
differences imply that trade leads to substantial benefits. Consider the
value of spices in 15th century Europe relative to their price in the East
Indies: the potential profits were so enormous that even the highly dan-
gerous sea voyage—with the loss of the ship a very likely outcome—
made economic sense.
Tariff reductions and the spread of manufacturing production pro-
vided a substantial increase in the benefits from international trade. From
a shipping point of view, an important aspect of the development was the
fact that the fastest-growing segment was commodities with a high vol-
ume or weight relative to their value—oil, iron ore, coal and grain.
Shipping demand is not only determined by the type of cargo, but also
by the volumes that are traded. A crucial concept in the development of
seaborne transport is the idea of “parcel size”—the typical size of the
individual quantities that are transported. The parcel size depends both
on the type of cargo and the destination; the need for iron ore at a giant
Japanese steel factory is for instance much larger than the demand for
sugar in a mid-size village. This difference will be reflected in the parcel
size, which affects the choice of the “optimal” ship for a specific trade—or
whether sea transport is suitable at all.
If there is potential for seaborne transport, the next question will be
related to the ship itself. What are the restrictions with regard to size,
storage, cargo handling, and so on? A bigger ship usually has lower unit
costs, but one that is too large relative to the parcel size becomes uneco-
nomical. The shift from sail to steam was hailed as revolutionary, as it
enabled scheduled services and improved safety. However, in a long-term
perspective, the shift from wood to iron and then steel as a building
material was extremely important as well. The productivity improvement
in world shipping has not been driven by faster ships, but primarily by
larger vessels—physical size has been more important than speed.11 A
simple thought experiment might illustrate the enormous size increases.
Today, there are container ships with a length of around 400 metres. It
takes around four minutes to walk from bow to stern. Picture a ship this
size made out of wood, sailing in rough seas. The term “floating cof-
fins”—favoured by both Samuel Plimsoll and Henrik Ibsen to describe
the unseaworthy ships of the late 19th century—would take on new
dimensions.12
11
See Kaukiainen (2006, 2012). The improvements in carrying capacity have been spectacular: the
largest bulk carriers today may hold more than 200 times as much cargo as the typical sailing ship
of the late 19th century. Speed-wise, however, the improvement is more meagre; with 14 relative to
4 knots, the modern vessel is around four times faster (on days where there is decent wind).
12
The size limit of wooden ships is partly related to limits in their building material, but surpris-
ingly large wooden vessels have been constructed. In the first part of the 19th century sailing ships
of around 90 metres were built, and the motivation for the design was one of the ever-recurring
themes of human nature: tax avoidance. The Columbus and the Baron of Renfrew were so-called
“disposable ships,” built for one-off journeys from North America to the UK, where they would be
dismantled and the timber sold—thus avoiding timber duties. Built in the middle of the 1820s and
around 10 times larger than the regular timber vessels at the time, the aim was not “sailing effi-
ciency, but merely […] getting the largest amount of timber across the Atlantic with the smallest
possible expenditure,” according to Williams (1968, 378). The Columbus became something of an
attraction when berthed in London, while the Baron of Renfrew broke up into three main pieces
outside France and provided a lot of free timber for beachcombers over the following years. A
decline in freight rates and timber prices, as well as subsequent relaxation of timber duties, implied
168 S. Tenold
The post-war decades saw a technological improvement that some

have claimed had the same far-reaching effects as the transition from sail
to steam.13 While such comparisons are difficult, there is no doubt that
the world fleet in the early 1970s was dramatically different from what it
had been just a couple of decades earlier. One difference was size: improve-
ments in ship construction—in particular the introduction of welding
and new steel types—enabled the building of bigger ships. The average
ship in the world fleet in 1948 was around 2700 tons, while it was more
than 5000 gross register tons (grt) in 1973.14 Given that the number of
ships almost doubled, and their capacity, speed and turnaround time
increased as well, the carrying capacity of the world fleet increased by a
factor of more than four.
The average size of the ships increased, but for specific types of vessels,
the largest ships became much, much larger. The use of economies of
scale was particularly strong in certain trades, for instance in the tanker
market. In the early 1920s Esso built 22,000 dead weight ton (dwt) tank-
ers, which remained the world’s largest for the next 25 years. The biggest
tanker in 1950, the SS Velutina, was slightly less than 30,000 dwt. Ten
years later, the Universe Apollo was four times larger, and the Universe
Ireland, delivered in 1968, was more than 10 times larger.15
The increasing ship sizes posed some challenges, not only in port, but
also at sea. Large ships are more difficult to navigate and control.
Changing the course takes more time, and the “braking distance” for a
200,000 dwt ship at full speed is 4 kilometres, even after reversing to “full
astern.” The distance needed to stop would increase to an amazing 10
kilometres if the wind, currents, and so on were unfavourable.16 Moreover,
if there is an accident, the environmental impact of a large ship—with a
giant cargo and a huge store of bunkers—would be worse than for a
that no more disposable ships were built for this trade. The largest wooden ship built—the six-
masted, 3700 gross ton Wyoming, built in 1909—illustrates the problems of using “live” wood as a
building material on giant vessels. Even though the ship—which at 329.5 feet just pipped the 100-
metre line—had been stiffened with steel, the Wyoming bent and twisted in bad seas and in 1924
sank with 13 lives lost.
13
Mayer (1973, 145).
14
Calculated on the basis of Lloyds Register of Shipping Statistical Tables, 1980, 75.
15
See the overview of the growth in average and maximum sizes in Stopford (2009, 40).
16
Dahl (1970, 31).
smaller ship. When the Sinclair Petrolore exploded in 1960, the oil spill—
60 million litres—was more than twice as large as anything seen before.17
Still, the benefits related to economies of scale, and improvements in
shipbuilding, navigation and safety, led to a strong increase in average
and maximum sizes.
Size increases were important, but there were also fundamental changes
in the composition of the fleet. A number of new ship types were intro-
duced. The 1950s and 1960s saw a massive decline in the proportion of
general cargo carriers, and a substantial increase in the share of tankers,
bulk carriers and specialized ships. Innovations made the transport of
traditional commodities cheaper and more efficient, and also enabled the
large-scale transport of cargoes that had previously been too difficult or
dangerous to carry on a ship.
The new vessel types—combination carriers, container ships, gas tank-
ers, chemical parcel tankers and car carriers among others—ensured a
much greater variety in the types of vessels that made up the world mer-
chant marine. A rapidly growing number and volume of commodities
were carried “in bulk”—directly in the hold of the ship, rather than in
any kind of packaging. In the first post-war decades, the world fleet
became far more specialized—a process that the maritime economist,
Martin Stopford, has referred to as “shipping’s industrial revolution.”18
If the first two elements—the trade and the ship—are in place, the
next bottleneck will be the port. At some point economies of scale turn
into diseconomies of scale. Increasing the ship might reduce the unit
costs at sea substantially, but if the vessel spends five weeks in port to be
loaded and another five weeks to be emptied, the net benefit might be
negative. Bigger is not always better. Consequently, efficiency improve-
ments at sea are futile, if they are not followed up by new solutions in
port.
17
Devanney (2006, 23–27). The Sinclair Petrolore had been the world’s largest ship when delivered
in 1955. Just like size records were broken, the oil spill record did not last long. In 1967 the Torrey
Canyon was grounded after a navigational error, when the captain tried to take a shortcut in order
to reach the tide at the Milford Haven terminal in Wales. The Torrey Canyon accident paved the
way for stricter regulation, including the introduction of the International Convention for the
Prevention of Pollution from Ships. The ship also entered pop culture, through an eponymous song
by French crooner Serge Gainsbourg, with the catchy refrain “cent vingt mille tonnes de pétrole
brut”—120 thousand tons of crude oil.
18
Stopford (2009, 39–46).
170 S. Tenold
Shipping innovations must be matched by improvements on land to

make them profitable. The Vaderland, built in the UK in 1872 for the
Belgian Red Star Line, was the first steamer designed for the international
transport of petroleum in bulk. However, neither the United States nor
the Belgian authorities liked the idea of combining flammable petroleum
and passengers, even on different legs, and the quayside facilities were
inadequate. Consequently, on its first return trip from the United States,
Vaderland carried general cargo in its tanks, and there is no record of the
ship actually performing the bulk petroleum transport for which it was
designed.19
The technological transformations—from sail to steam to diesel before
the war, and improvements in vessel size and specifications after the
war—have all reduced the labour intensity of the “shipping” leg of sea-
borne transport. The sailors have climbed down from the crow’s nest and
the rigging and the firemen and stokers have left the boiler room.
However, even in the first post-war decades, what happened in port—the
interface between the sea and the land—was relatively labour intensive,
particularly for general cargoes. The large European ports, for instance
Antwerp and Rotterdam, relied on large pools of casual labour, dock-
workers who cherished the freedom to decide how much they would
work and for whom.20
The new ships required changes. Although the first super-tankers were
loaded at special offshore terminals and had to discharge part of their
cargoes to smaller ships in outer bays before they could proceed to the
port, the economies of scale involved when the ship was at sea were so
large that transhipment still made sense.21 In time, the ports developed in
a manner that made it possible to accommodate the new ship technolo-
gies. There was a constant focus on improving the speed of loading and
unloading, and the construction of dedicated onshore terminals proved
to be a solution for many commodities.
Finally, in order to fully utilize the new advances, it is necessary to be
able to transport the cargoes efficiently to their final inland destination.
19
Dunn (1956, 20–21).
20
Vanfraechem (2012, 150).
21
Young (1971, 20).
This infrastructure—that stretches the ocean into the Hinterland—is

sometimes forgotten. However, efficient transfer to subsequent means of
transport—pipelines, barges, feeder ships, trains or trucks—is necessary
in order to fully utilize the advantages of innovations in ships and ports.
hree Technological Revolutions:

T
Containerization, Bulkification
and Specialization
In the post-war period, three technological concepts have managed to
combine all the four critical features above—the trade, the ship, the port
and the inland infrastructure. The result has been three related techno-
logical development traits—containerization, bulkification and special-
ization—that have all been bolstered by the more general utilization of
“economies of scale” in ship construction and in transport. Together,
these developments revolutionized seaborne transport in the decades
after the Second World War.
The most visible of these trends, at least in daily life, is containerization.
In many ways, the ubiquitous containers—usually emblazoned with the
logo of one of the large liner companies— Maersk, Evergreen, Hanjin,
CMA CGM—have become one of the foremost symbols of globaliza-
tion. While the average liner had spent only one day at sea for every four
days in port, this changed to only one day in port for every day at sea for
the container vessels.22 As ships make money when they transport goods,
not when they are in port, the effects on prices, profits and productivity
were overwhelming.
The theoretical basis for containerization was standardization—the
fact that identical units make storage, movement and planning much
easier. Before containerization, managing the consignments on general
22
Vanfraechem (2012, 152). Compared with previous centuries, the transport revolution is even
more striking. Efficient container terminals can move around 300 containers from a vessel in one
hour—amounting to a conservative 3000 net register tons. These containers would fill one of the
large sailing ships of the late 19th century—ships that typically had a turn-around time in port of
around a month or more; see for instance Sager and Panting (1990, 141). A couple of hours versus
one month makes a lot of difference in an industry where time is money.
172 S. Tenold
cargo carriers often provided the deck officers with a logistical nightmare,
where legal, safety and practical issues posed a lot of challenges. A classic
example was the US ship SS Warrior, which in the middle of the 1950s
was subject to one of the first detailed productivity studies within ship-
ping. On a voyage from New York to Bremerhaven, the vessel carried a
total of 74,903 cases, 71,276 cartons, 24,036 bags, 53 wheeled vehicles,
22,339 individual pieces in 10 other categories (barrels, reels, etc.), in
addition to 1525 units simply identified as “undetermined.”23 All of this
had to be stowed securely and accessibly, and the complexity of course
spilled over onto the land side.
Ports were characterized by “intense activity dockside. Sacks, boxes,
crates – goods of all shapes and sizes – would be laid out in a seemingly
disordered fashion, among which dozens of men swarmed carrying out
different tasks.”24 The shipping container brought order into this chaos.
The box also brought other benefits. Containerization reduced cargo
claims due to damage and pilferage (the proportion of goods that “fell off
the back of a lorry” was reduced significantly with containerization). It
also enhanced safety. In the mid-1950s half of all longshoremen were
injured on the job annually, and one out of six suffered a disabling injury,
according to one US study.25 Containerization reduced accidents and
made the dock workers’ jobs safer, on a daily basis. In the longer term, the
mechanization of course made the job itself insecure—the technology
needed fewer, but more skilled workers.
Like most innovations, containerization had a relatively slow start. The
US trucker Malcom McLean is credited with the “invention” of the con-
cept, and the inception is dated to 1956 and a trip from New Jersey to
Puerto Rico by the ship Ideal X, but container sizes and transport
23
The study of the SS Warrior’s 10-day trip in March 1954 is frequently used as an example of the
complexity; Levinson (2006a). While most sources refer to the Tayloresque productivity studies,
the aim was to optimize aspects such as navigation as well; see Allen (1954).
24
Vigarié (1999, 4); see also Donovan (1999).
25
National Research Council (1956, 1), from a study of more than 7000 work accidents on the US
Pacific Coast in 1954. Among longshoremen there were 92 disabling injuries per million man
hours worked—almost eight times as much as in manufacturing in general. The worst place to
work was in the hold, where more than half of all the accidents took place, with another 15 per cent
occurring on the deck of the ship; National Research Council (1956, 71).
concepts varied for decades after this.26 As the use of containers increased,
up to the point where it had become the dominant technology, work on
the docks changed tremendously. Moreover, in many countries the port
infrastructure was also transformed, with liberalization, privatization and
deregulation complementing the new technological possibilities.
Containerization had a particularly large effect on the transport of fin-
ished goods.27 However, efficiency improvements in shipping also led to
a drastic reduction in the cost of moving inputs. The transport of com-
modities was revolutionized by the utilization of the bulk concept and
the introduction of specialized ships that either enabled the transport of
new products, or drastically reduced the cost of transporting commodi-
ties that had previously been moved by general cargo carriers. Although
they are largely absent from the container sector, within bulk and special-
ized shipping, Norwegian companies were among the pioneers.
The term “liquid bulk” is used to characterize tanker shipping. The dry
bulk concept—referring to the manner in which loose commodities were
carried directly in the hold of the ship, rather than being individually
packaged—actually pre-dated tanker shipping, though at the start of the
1950s it was much less important. The collier (coal ship) John Bowes, a
hybrid steam/sailing ship built in 1852, is often credited with being the
first modern bulk ship. In North America “whalebacks,” bulk carriers
that have been likened “to a floating cigar with ends upturned,” were
common on the Great Lakes from the 1890s and well into the post-war
period.28
In the 1950s and the 1960s, dry bulk shipping became an important
activity in the intercontinental market. The combination of longer
distances between source and destination for some of the most impor-
tant commodities, as well as increased volumes, made the bulk concept
much more attractive than conventional general cargo ships with several
26
See Levinson (2006b), which gives a good presentation of the history of container shipping or the
more condensed Levinson (2006a), which focuses on the port of New York. See Poulsen (2007,
2010) for a presentation of the Scandinavian response to containerization, and Bakka (2008), for a
discussion of the impact on Norwegian liner shipping.
27
When the major South Korean container operator Hanjin Shipping filed for bankruptcy in the
autumn of 2016, the company was accused of “spoiling Christmas”; Cooper (2016).
28
Dunphy (1979, 351).
174 S. Tenold
individual decks in the hold. Bulkification was a key ingredient in the

spread of manufacturing production. The major market for the dry bulk
ships was intercontinental trade of coal, iron ore and grain.29
Minor dry bulk goods—steel and forest products, bauxite, alumina
and a number of agricultural goods—were transported in specialized
ships, reflecting the smaller parcel sizes in these trades. But bulk-like con-
cepts are also behind, for instance, LNG- and LPG-tankers, ships carry-
ing liquid natural gas and liquid petroleum gas, respectively. While such
gases had previously been carried in small, individually pressurized tanks,
in the 1950s and 1960s purpose-built ships with large tanks, combining
pressure and refrigeration, were introduced.
A similar innovation was chemical carriers, often referred to as “parcel
tankers.” Here, the combination of different parcels on the same ship
enabled the use of bulk storage and transport even for smaller volumes.
The parcels could be different chemicals, consignments owned by differ-
ent customers, or cargoes that were coming to or going from different
ports. The parcels would typically be too small to justify the chartering of
a full ship, but sufficiently large to make individual packaging inconve-
nient and inefficient. Dedicated ro-ro (roll on-roll off) ships were also
built to transport cars and other vehicles, and ships were purpose-built
for the carrying of livestock or heavy and bulky cargoes.
The development of the specialized ships implied that there was a large
number of new efficient competitors that challenged the position of the
old general cargo carriers—the traditional ships that were suitable for
almost all cargoes, but well-suited for almost none. Specialization had
dramatic effects on the cost of transport; freight rates fell by 50 per cent
or more, at the same time as the shipping companies’ managed to increase
their own profits substantially.30
In some market segments, the main competition was not new ship
types, but other means of transport. The airline industry more or less
killed off intercontinental passenger transport in the 1960s. Norwegian
29
With regard to grain, the dry bulk ships also competed with tankers. Properly cleaned oil tankers
were used for grain transport if the crude oil market was poor, and even for grain storage if the
crude oil market was terrible.
30
See the example of transport costs for chemicals between the United States and Japan in Murphy
and Tenold (2008, 294).
shipping companies had never played a big role in that market—with the
exception of the domestically based Den Norske Amerikalinje, whose
home market was protected. The company’s trans-Atlantic activity peaked
in 1956, with some 25,000 passengers.31 Gradually, the company entered
the cruise market, one of the many markets that became a “Norwegian
specialty” in one of the most expansive periods of Norwegian shipping.
Norwegian Fleet Expansion

As mentioned in Chap. 2, the expansion of the Norwegian fleet in the
1950s and 1960s was tremendous—the size of the fleet doubled in the
1950s and doubled again in the 1960s. Moreover, the growth was very
well adapted to the structural changes in shipping demand. Norwegian
owners were at the forefront of the technological development, focusing
on two of the three main technological breakthroughs—bulkification
and specialization.
The Norwegian owners already had a flying start with regard to bulki-
fication, as a result of their position as the world’s largest independent
tanker owners. The strong involvement in tanker shipping continued in
this period, but the Norwegians were also among the pioneers in the
transport of dry bulk goods, with an average market share of 18.7 per
cent of the world fleet during the 1960s. The market was dominated by
ships registered in Japan, Norway, the UK and (by proxy) Liberia.32
Anders Martin Fon, who has written the most authoritative history of
Norwegian post-war dry bulk shipping, points out that Norway’s leading
position in the 1950s and 1960s was the result of the shipowners’ open-
ness towards new ideas. An entrepreneurial and creative spirit character-
ized the owners, both in the early days of dry bulk vessels in the 1950s,
and when the trade was increasingly supplemented by combination
See Vea, Seland and Schreiner (1960) and Bakka (2008).

31
Market share calculated on the basis of Fon (1995a, 293). The ownership of the Liberian fleet was
32
divided among several countries; in the beginning of the 1970s around half the fleet was owned by
Greek interests, a third by Americans and the rest by shipping companies from various other
countries.
176 S. Tenold
carriers—ships that could transport both wet and dry bulk cargoes—in
the 1960s.33
Regardless of the leading Norwegian position within dry and liquid
bulk shipping, the real Norwegian “specialty” was specialized ships.
Developments during the 1950s and, in particular, the 1960s, had an
impressive effect on the Norwegian share of a handful of specialized ship-
ping segments. In many of the new market segments, Norwegian ship-
ping companies, brokers, ship equipment producers and naval architects
played key roles in the development of the new technology. They were
instrumental in the introduction or improvement of new ship types, and
they also introduced novel ways in which ships could be owned, operated
and managed. New types of charter contracts, joint ownership of vessels
and pool operation enabled Norwegian shipping companies to build up
a substantial presence in many of the new segments, in particular the
intercontinental transport of chemicals, gases and forest products.
By the beginning of the 1970s, three of the four largest companies in
the chemical tanker market had their roots in Norway. More than 30
Norwegian companies were involved in gas transport, owning around 17
per cent of the world fleet. In Bergen, two competing shipping pools
were building up the world’s largest fleets of open hatch bulk carriers—
ships that were especially suited for the transport of forest products—
controlling almost two-thirds of the market by the middle of the decade.34
Why did Norwegian shipping companies succeed so well in the devel-
opment of specialized shipping niches? At least three factors were at play.
First, the Norwegians had excellent market knowledge. Their long h istory
and close relationship to major customers implied that they were able to
spot opportunities and gather the information necessary to implement
new technologies. Many of the new specialized segments could be put in
the bracket “industrial shipping,” where new contract types and close
cooperation between customers and shipowners characterized the busi-
ness. Long-term contracts of affreightment, where the shipper promised
cargo volumes and the shipping company promised transport capacity,
often formed the basis for investments in new tonnage.
Fon (1995a, 195–235); see also Fon (1995b).

33
Tenold (2015a, 105–108).

34
Second, in the period where the Norwegian shipping companies intro-

duced their new technological solutions, shipbuilding was still an impor-
tant Norwegian industry, and several of the new or refined ship types
were designed by Norwegian naval architects and built at Norwegian
shipyards. An example is LNG-shipping, where the research arm of the
classification society Det norske Veritas was engaged to refine a concept
that Hans Ludvig Lorentzen, the oldest son of the shipowner Øivind
Lorentzen, had developed. The first ship based on Lorentzen’s patented
sphere design, Mundogas Brasilia, was delivered in 1961—built in
Norway and owned by a Lorentzen company.35 In the longer term, other
auxiliary entities—naval architects, consultants, brokers, equipment
manufacturers—provided important input into the design of the tech-
nology and the development of the service.
Finally, there was room for trial and error in Norwegian shipping. The
tax system made investments in new shipping capacity very profitable.
The specialized ships carried some risk, but potentially large benefits as
well. In a number of cases, innovative entrepreneurs worked together with
older, wealthy companies to invest in the new technology. This implied
that resourceful individuals with limited means could benefit from the
existence of older companies with available funds—and vice versa.
In the 1950s and 1960s the Norwegian shipping industry was pro-
pelled forwards by a two-pronged strategy, utilizing two of the techno-
logical concepts. On the one hand, there was bulkification. The massive
investments in crude oil tankers, dry bulk ships and combination carri-
ers weighed heavily in tonnage terms, and are the main explanation of
the fact that Norway’s share of the world fleet increased from around 6
per cent in the late 1940s to a record-breaking 10 per cent two decades
later. On the other hand, there was specialization: investments in smaller,
specialized ships, often innovative vessels that created their own new
markets. Both of these strategic paths depended upon developments
abroad, but were forcefully shaped by conditions at home. The Norwegian
strategies were determined by the domestic access to labour and capital,
influenced by economic policies in general, and shipping policies in
particular.
35
Bakka (2017, 97–99).
178 S. Tenold
Shipping Policy and Factor Costs

In 1967, David Vikøren, Director of the Norwegian Shipowners’
Association, gave a presentation called “Merchant Marine Policy of
Norway” at a Canadian conference. His presentation suggested that the
Norwegian shipping policy at the time was one of minimal interference
and preferences—at least of the positive, subsidizing kind. Instead, he
claimed that “Norwegian shipping is taxed harder than in most other
countries, is subject to stricter manning rules” and was at a disadvantage
with regard to technical standards, safety requirements, education and
research. Quoting Sturmey’s classic book about the decline of British
shipping, he concluded that “Norwegian shipping expanded in spite of,
not because of, the actions of the government.”36
Given these alleged internal restrictions, the fact that Norwegian ship-
ping managed to remain competitive and increase its share of the world
fleet in the first post-war decades may seem surprising. However, as any
airport strategy book will tell you, business is all about adapting to the
circumstances, rising to the occasion and laughing in the face of adver-
sity. Thus, Vikøren’s negative spin on the authorities’ influence should
not be accepted unconditionally. The authorities did indeed influence the
industry, but for much of the 1950s and 1960s the influence consisted of
“nudging” the strategies of the shipping companies. And inadvertently,
most shipowners were nudged in the right direction.37 With the excep-
tion of the contracting ban at the very start of the period, the policies did
not hold back their business activities, they just shaped the decisions that
shipping companies made. And up until 1973, the shipping and eco-
nomic policies in Norway encouraged shipping companies to make some
very wise moves.38
36
Vikøren (1967, 8–9).
37
Here it is important to point out that we are not talking about conscious industrial policy, in the
sense that the authorities had the ability to pick winners or forced shipowners to follow a pre-
determined strategic pattern. Rather, the main priority of the policies was to fulfil other goals, in
particular regarding employment, tax revenue and balance in Norway’s external economic rela-
tions. The beneficial strategies became an accidental by-product of the regulations.
38
Two good analyses of the Norwegian shipping policies in the 1950s and early 1960s are Svendsen
(1957, 1964).
A case in point is the manner in which the policies influenced the

expansion of the fleet. In his analysis of the effects of the tax regime in the
interwar period, Eivind Merok has pointed out that the political econ-
omy of Norwegian shipping was “highly beneficial for entrepreneurs will-
ing to make bold investments in larger, more expensive vessels, leveraging
their investments heavily and betting on future asset prices to generate
extraordinary profits.”39 This description fits the situation after the Second
World War perfectly, as well.
The Norwegian shipping companies expanded at an impressive rate in
the 1950s and 1960s, on average increasing their fleet by almost 7 per
cent annually. At the international level, the situation may appear similar
to that of the interwar period, when Norway gained market share at the
expense of other countries. However, at that time, the Norwegian fleet
grew while the world fleet stagnated or declined. In the first post-war
decades, Norway gained substantial market share in a market that was
growing rapidly.
Sources of Capital
The Norwegian fleet expansion was based on large, expensive vessels and
novel technological solutions. Two questions are particularly interesting
in this respect. First, how was it possible to finance this extreme growth?
Second, how were the investment decisions, including decisions about
the level of total investment and the choice of investment objects, affected
by the government’s policies?
In general, Norwegian shipping companies had three main sources
of capital; retained earnings, domestic equity and loans from domes-
tic and foreign sources. All three were affected by the authorities’
policies.
With regard to retained earnings, the authorities encouraged compa-
nies to keep profits within the company, rather than paying it out to the
owners. From 1953 onwards, domestic regulations limited dividends to a
39
See Merok (2011).
180 S. Tenold
maximum of 5 per cent of the share capital.40 This restriction had two
aims. The first was to keep funds within the company in order to enable
investments in new production capacity—in the case of shipping compa-
nies: new tonnage. Second, the limitation of the dividends was intended
to “regulate the income” available to capitalists, a feature that was also
seen in limitations on the salaries of management and the remuneration
of company directors.41 In the ever-present discourse between the market
and the authorities—between the invisible hand and the visible hand—
the Norwegian system was leaning quite heavily towards state interven-
tion in the first post-war decades.
The design of the Norwegian tax regime also encouraged the reinvest-
ment of profits. Indeed, the tax system almost made the limitations on
dividends superfluous; the manner in which dividend payments were
taxed—first with respect to the company, then with respect to the share-
holder—made them almost prohibitive.42 The shipping companies’ tax
rate was high—in the period 1946–1958 income and wealth taxes
amounted to almost two-thirds of their taxable income. Furthermore, as
the marginal tax rate on dividends could exceed 100 per cent for some
individuals, it is evident that it would be better to reinvest profits in new
tonnage that gave substantial tax deductions.43
The tax system led to a pro-cyclical pattern in the contracting of new-
buildings—in years when the market was good, and profits were high, the
pecuniary benefits of investing in ships, rather than paying tax, were par-
ticularly high. Finally, the double taxation implied that money remained
in existing companies, rather than being made available for new invest-
ment projects. The tax system consequently had a preserving effect on the
industrial structure—policy-induced path dependence. As a lot of money
40
Søilen (1998, 111). It was possible to apply for a dispensation from this rule, and some compa-
nies were allowed to pay out more when the market was particularly beneficial. There was also a
tendency for the rules to be interpreted more leniently towards the end of the 1950s; see Gjermoe
(1968, 50–52; 1972, 49–54).
41
From a speech by Minister of Finance, Erik Brofoss; Norway, Parliament, Stortingstidende
(1945–1946), 233–246.
42
Aars-Nicolaysen (1959, 27). By 1959 the maximum limit had increased to 6 per cent; see also
Damman (1958).
43
Seland (1960, 10–11); typically, the marginal tax rate for wealthy share owners would be in the
region 60–80 per cent.
was invested in shipping, a lot of money would remain invested in

shipping.
The second source that financed the fleet expansion was equity raised
in the Norwegian market. It is very important to keep in mind that the
1950s and 1960 were a period with very limited possibilities for cross-
border investment. Due to restrictions on capital movements—mainly
introduced in order to keep exchange rates stable—Norwegian funds
were to a large extent “locked in” within the country. Again, the “tradi-
tional Norwegian predicament”—that alternative investments did not
provide particularly large profits—helped the shipping sector.44
The part ownership had managed to raise investment capital from
quite a large proportion of society in the 19th century, partly as a result
of the ability to contribute in kind, partly as a result of limited alternative
placements. To which extent was this replicated in the second half of the
20th century—how common were ship investments?
In the early 1960s, the economist Eilif Gjermoe analysed the accounts
of Norwegian shipping companies. Around 300 companies owned ships
larger than 500 grt in 1963. The main source on limited liability compa-
nies, Kierulfs Håndbok, gave information on 225 such companies within
shipping and whaling, of which 119 were listed on the stock exchanges.
In total, the stock exchange listed companies had more than 50,000
shareholders and an ordinary share capital of marginally more than
NOK300 million.45 Only four of the companies had an ordinary share
capital of more than NOK10 million, and another 14 had a share capital
of between NOK5 million and NOK10 million.46
Despite the quite substantial number of shipping companies listed on
the stock exchanges at this time, the role of the stock exchange as a source
44
The basis for this low alternative return—limited resources and a thin market—continued to be
relevant. However, in the post-war period energy-intensive manufacturing, utilizing Norwegian
hydro power, became a profitable alternative that would compete with shipping for funds.
45
There is some overlap between share owners. It is also likely that investments in the stock
exchange-listed companies, which were relatively liquid and easy to buy and sell, was more wide-
spread than for the remaining shipping companies.
46
Gjermoe (1968, i–ii). Some shipping companies (rederier) were affiliated with more than one
limited liability company (aksjeselskap), while others had different forms of incorporation. The
companies included in the analysis on average made up more than one-third of the Norwegian fleet
in the period 1946–1964; Gjermoe (1968, 11).
182 S. Tenold
of capital was quite limited. In the period 1965–1970, for instance, only
NOK6.4 million worth of new capital was raised for shipping companies
at Oslo Børs. These emissions—one in 1966 and one in 1970—amounted
to less than 1 per cent of fresh capital raised at the stock exchange.
Typically, shipping company shares were “not recommended” as invest-
ment objects; their development in the 1960s had been “very meagre”
and the liquidity of the shares was far from satisfactory.47
Finally, the Norwegian shipping companies had access to loan finance
at home and abroad. In the first post-war decades the Norwegian author-
ities sanctioned a low interest rate policy in order to encourage invest-
ments. With such a policy, access to capital is not only determined by the
borrowers’ willingness to pay, but also by political preferences about how
the queue for funding is organized and ordered. At the same time, there
was an element of competition. In the words of Norway’s Central Bank
Director, Erik Brofoss, in 1959: “An important aspect of our investments
is that 25–30% of the total gross investments are within shipping. It is
evident that this industry is willing to pay a far higher interest rate than
it would be possible to charge for instance agriculture.”48
There were several domestic sources. In 1906 a consortium of four
banks had established Norsk Skibs Hypothekbank AS, which aimed at
providing first priority mortgages, but the terms were initially relatively
strict. The war insurance arrangement introduced during the First World
War was discontinued in 1923 with a NOK48 million profit. This was
distributed to the Fund for Seamen (NOK20 million) and compensation
for losses on maximum freights (NOK10 million), with most of the
remainder going to establish a financing institution, Norsk Skipshypothek
AS, in 1928, with headquarters at Minde, near Bergen.49
47
Nyquist and Wiik (1972, 56–65). The 1 per cent of the new funds raised can be compared with
the fact that shipping companies made up 45 per cent of the number of companies listed on Oslo
Børs in 1971.
48
Brofoss (1959, 32). This is the same Brofoss that was referred to earlier as Minister of Finance in
the immediate post-war years. He also became the first head of Norway’s Department of Trade and
Shipping (1947–1954), a position he left to become Director of the Central Bank.
49
Two smaller, differently organized, institutions also provided first priority mortgages. In 1916
Norges Skipshypotek Forening was established in Oslo, while Redernes Skibskreditforening was estab-
lished by 14 shipowners on the South Coast in 1929; see Petersen (1979).
A new source of finance, characteristic of the manner in which

Norwegian economic development in the first post-war decades was
determined at the crossroads of public policy and private institutions,
was Låneinstituttet for skipsbyggeriene [the Mortgage Institute for the
Shipyards]. Established in 1959, it was owned by the leading banks, ship-
yards and the Norwegian Shipowners’ Association, but was provided
with a loan from the Ministry of Finance and also given government
guarantees. Låneinstituttet would only fund vessels built at Norwegian
shipyards, and was aimed at helping Norwegian shipbuilding, rather than
shipowners.50 However, given that Norwegian shipowners, partly as a
result of the restrictions on their foreign activities, were by far the most
important customers at Norwegian yards, there was a beneficial effect for
shipping as well.
The Norwegian banks participated in the financing of Norwegian
shipping through the cooperative institutions at home and abroad, but
also on their own books. They cooperated to establish consortia in Zurich
(1958) and Amsterdam (1968) to raise capital abroad for ship investment
in Norway. Several banks had shipping as a specific strategic priority, and
there were sometimes “revolving doors” between the banks, shipping
companies and shipping institutions.51 The sheer amount of capital
involved, and a desire to spread risk, implied that loans to shipping were
often organized as syndicates, with the participation of both domestic
and foreign banks.
Foreign banks and, in particular, foreign yards and their associated
financing institutions, were eager to lend money to Norwegian shipping
companies. According to a contemporary report, the shipping sector
was responsible for between two-thirds and four-fifths of the private
capital imported into Norway in the period 1958–1967.52 As such, the
shipping companies were in a somewhat strange position, finance-wise.
50
See Sejersted (1982) or Knutsen, Lange and Nordvik (1998) for an introduction to the banking
side of this, and Platou and Stokke (1980), for a more general introduction. The cunning manner
in which the Norwegian authorities managed to raise capital abroad—by depositing the country’s
currency reserves at terms that were below the market terms in banks that were willing to lend
money for ship purchases—is discussed in Knutsen (1997).
51
Sejersted (1982, 228).
52
Boldt-Christmas, Fagerland Jacobsen and Tschoegl (2001, 82).
184 S. Tenold
For much of the first two post-war decades, government regulations

stipulated that shipowners had to fully finance abroad newbuildings
that they ordered from foreign yards, so as not to deplete the limited
Norwegian reserves of foreign exchange. This implied that shipowners
borrowed money abroad to invest, while at the same time were forced to
keep their deposits in Norwegian banks at low interest rates.53 Although
the demand for “currency neutrality” for ship investments implied that
Norway formally flouted the rules of the Organization for European
Economic Co-operation (OEEC), it was “understood and silently
accepted” by the organization.54
The main reason for the shipping companies’ easy access to financ-
ing abroad was expanding capacity in the shipbuilding industry. The
Japanese shipyards were formidable challengers to the European hege-
mony, and the solution to ensuring orders was to provide easy—and
often state-subsidized—financing. As a result of a race-to-the-bottom
in shipbuilding subsidization, the Organization for Economic
Co-operation and Development (OECD) in 1969 introduced an
Understanding on Export Credits that stipulated the maximum indi-
rect or direct support.55 According to the terms of the agreement,
interest rates could not be lower than 6 per cent, the repayment period
could not be longer than eight years, and financing could not exceed
80 per cent. The aim of the agreement was to increase real competition
in the shipbuilding industry and neutralize support measures that had
a distorting effect on competition among shipyards and among ship-
building nations. At the time, the OECD-countries were responsible
for around 90 per cent of new deliveries.
The analysis above has shown the many ways in which the authorities
influenced the financing of shipping—both the type of investment, as
well as the level and timing of investment. A similar influence was seen
in connection with labour regulations. The legal framework played a
53
Seland (1959, 43). This regulation was in force from 1947 to 1952 for general cargo carriers, but
lasted until the early 1960s for tankers and most other specialized vessels. See also Nossum (1960).
54
55
The OECD was the successor of the OEEC, established by the OECD declaration in 1960,
between the OEEC countries (in practice “Western Europe” minus Finland), the United States and
Canada. Japan joined in 1964 and Finland five years later.
particularly important role for the choice of ship types. While there was
relatively good access to capital, the labour situation was more difficult.
Manning the Fleet
Immediately after the war the question of manning the ships became
problematic.56 Demand for workers onshore was substantial, and many
of the seafarers that had kept the Norwegian merchant marine going dur-
ing the war were still fighting their own battles, which made them ill-
equipped to sail. The deficit of Norwegian seafarers could be supplemented
by foreigners, but only up to a point, when Norwegian regulations would
kick in. By 1967 around a quarter of the seamen on Norwegian ships
were foreigners, mainly other Europeans that were employed on
Norwegian terms.57 However, in the longer term the solution to the
recruitment problem became rationalization and economies of scale.
One of the most fascinating transformations in shipping in the first
post-war decades is the manner in which seaborne trade went from being
a labour-intensive activity to becoming a high-technology, capital-
intensive business. The Norwegian ships did become more technologi-
cally advanced and more expensive throughout the century, but in the
first half of the 20th century there were no revolutions in the manner in
which cargoes were handled and ships were operated. The number of
seafarers per ship was relatively constant (although the ships became big-
ger) before the Second World War.
After the war, the number of seafarers per ship increased, before level-
ling out around 1960. The average tonnage per seafarer increased only
marginally. During the 1960s, however, there was a break in the develop-
ment. The amount of tonnage per seafarer accelerated as the average size
56
Egeland (1971, 23–24). Norwegian seafarers sailing on foreign ships were even urged to sign on
Norwegian vessels for patriotic reasons; Verdens Gang, 190347, 6.
57
Seafarers’ lives and organization have been documented in a series of recent publications. See
Olstad (2006) for the period up to 1960, Halvorsen (2007) for seafarers in general, Halvorsen
(2010) for the question of foreigners, and Koren (2017) for an overview of the welfare aspect. See
also Tenold (2015b) for a broad overview, as well as the discussion of the “uncounted” foreigners in
Chap. 8.
186 S. Tenold
of the Norwegian ships increased enormously. From the middle of the

1960s there was also a decline in the number of seafarers per ship—even
though the ships got bigger—as rationalizing measures were introduced.
This trend towards economies of scale was much stronger in Norway
than in other countries.
In 1955 the average Norwegian ship was marginally smaller than the
average ship in the world fleet—the difference was 0.4 per cent. Five
years later, the average Norwegian ship was 15 per cent larger than the
average ship in the world fleet, by 1965 the difference was 49 per cent
and by 1970 it was 59 per cent. At the peak, in the middle of the 1970s,
the average Norwegian ship was more than 80 per cent larger than the
average ship in the world fleet.58
This focus on large ships can be explained by the high and increasing
labour costs. There were three main reasons that Norwegian labour costs
increased more than those in other countries after the Second World War.
The first is an above-average increase in Norwegian wage levels, as the
Norwegian economy developed. The second is the relatively high man-
ning requirements—the cabin conditions, the turn system and restric-
tions on working hours contributed to pushing up costs. In 1951 new
manning regulations were introduced, which were particularly strict for
smaller ships. The small Bergen tanker Rogn illustrates the effects of the
law. The compulsory manning of the ship increased from 15 to 21 when
the new regulations entered into force—a problem, given that the ship
only had berths for 17 people. The vessel was sold to Germany, where it
could be operated with a crew of 14.59
The third reason was that social costs were higher than in many of the
competing countries. Gradually, Norwegian seafarers managed to win
rights that made their working lives more agreeable, but at the same time
they became less attractive from a competition point of view. In 1939
seafarers were given partial compensation for the cost of returning to
Norway after three years at sea—a moot point, given that the war made
such a return impossible or undesirable. A new Seaman’s Act in 1953
58
Calculated on the basis of gross tonnage data from Lloyd’s Statistical Tables 1980, Table 17, based
on all vessels larger than 100 gross tons. Given the properties of the Norwegian fleet, a comparison
based on dead weight tonnage would give an even larger increase in the size difference.
59
Thowsen and Tenold (2006, 256–265).
granted a paid-for return to Norway after 24 months of service.60 This

was reduced to 18 months five years later, to 12 months in the middle of
the 1960s, nine months in 1971 and six months in 1973.61 Given that
the Norwegian fleet still operated all over the world, the cost of sending
home seafarers was substantial.
Norwegian shipping companies acted rationally and according to eco-
nomic theory. The relative price of the factors of production in Norway—
the fact that capital was relatively cheap and accessible, and labour
relatively expensive—should be reflected in investment behaviour. To
remain competitive, shipping companies should invest in ships that used
the relatively inexpensive factor (capital) intensively, and try to avoid
using the expensive factor (labour). The solution—for most—was large
and expensive ships.
Survival of the Fittest
Economies of scale at the ship level—large vessels with limited need
for seafarers—enabled the Norwegian shipping industry to compete
internationally. However, if we take a closer look at the fabric of the
Norwegian shipping industry, we see that not all shipping companies had
the same ability to compete. In particular, there was a tendency for the
larger shipping companies to grow faster. The proportion of the fleet
owned by the 30 largest shipping companies increased from slightly more
than 50 per cent in 1950, to almost 60 per cent by 1970.62 It is evident
that many smaller shipping companies were unable to stay in business.
In 1960 a total of 174 Norwegian shipping companies owned vessels
larger than 5000 grt, spread across 26 different home ports. During the
60
The 1953 Act also stated that boys had to be at least 15 years old and girls at least 20 years old to
be lawfully employed onboard.
61
The 1939 arrangement was financed one-third each by the authorities, the shipping companies
and the seafarers, and came into force after three years, or two years for ships trading in European
waters. The service time could be extended by two to three months if the ship would be approach-
ing ports that were closer to home and from which the cost of returning the seafarer would be
significantly lower. The 1953 Act and subsequent improvements stipulated that the shipping com-
pany and the authorities would split the bill fifty-fifty. From 1975 the regulation also included
Norwegians living abroad.
62
Bakka (2017, 121).
188 S. Tenold
“good times” in the 1960s and early 1970s more than half of the compa-
nies that only owned one or two ships disappeared. However, they tended
to be replaced by newly established enterprises—by 1973 there had been
a net reduction of only three companies.63
In comparison, only 11 per cent of the companies that owned from
three to nine ships disappeared, and there were no exits at all among the
companies that owned more than 10 ships.64 This suggests that the smaller
shipping companies had a clear handicap during the boom period. One
explanation for this handicap might be that in a period of rapid technologi-
cal change, where it was necessary to invest in more expensive ships to
remain competitive, smaller companies had insufficient funds to replace
their ageing capital. Consequently, they became victims of the improved
productivity of their competitors.
Some smaller shipping companies chose cooperation as a survival strat-
egy. One possibility—for companies that could not buy a large and expen-
sive vessel on their own—was to enter into partnerships with other owners,
for instance by providing part of the equity for new bulk ship investments.
Another possibility was to piggyback on the companies that chose a spe-
cialization strategy. Within these segments, the economies of scale were
often related to the size of the fleet, rather than the size of the ship.65
The specialized segments were particularly well-suited for investments
by shipping companies that were unable to keep up with the rapidly esca-
lating newbuilding prices in the bulk market. Very often one of the
“larger” shipping companies would be in the driving seat, with the knowl-
edge and the strength needed to be competitive. However, there would
sometimes be a symbiotic relationship with smaller shipping companies.
An example from the chemical parcel tanker market illustrates this
mechanism.
63
The data set used for this calculation is presented in Tenold and Aarbu (2011), where the reinvest-
ment problems that smaller shipping companies faced are analysed in detail.
64
The rate of the decline for the smallest companies was relatively uniform throughout the period,
with a small acceleration after 1970. The medium-sized companies all disappeared in the second
half of the 1960s and the first part of the 1970s.
65
In other words, within specialized segments, it was beneficial to have a fleet of many smaller ships
in order to reap the benefits of economies of scale, as one large ship would be incompatible with
the trade pattern and parcel sizes. In the bulk segments, the economies of scale were primarily at
the ship level; a large ship was more beneficial than many small ships.
The transport of chemicals was a Norwegian speciality, and in the early

1970s the three dominant groups in this market all had their roots in
Norway; Stolt-Nielsen, Odfjell and Anco. By 1973 the three companies
owned almost 80 per cent of the tonnage in the market for parcel tankers
larger than 6000 dwt.66 The substantial market share that the Bergen
company Odfjell had acquired was partly based on its pool partnership
with one of Bergen’s largest companies, Westfal-Larsen & Co. However,
there was an element of segmentation within the chemical tanker market,
and Odfjell also participated with a number of smaller shipping compa-
nies in the operation of smaller chemical tankers.
Such cooperation enabled Odfjell to expand—and reap the benefits of
a diversified and larger fleet—without committing too much of its own
resources. The company could offer an improved service to its customers,
and there were also commissions involved from the chartering of the
ships. In the period 1965–1973, Odfjell bought 10 vessels together with
smaller shipping companies, and only one of these companies owned any
tonnage when they entered the partnership. The others had all disposed
of their last vessels shortly before. One reason for their cooperation with
Odfjell might be nostalgia, a desire to maintain their link to shipping.
Another reason could be the aforementioned beneficial tax advantages of
investing in new tonnage.67
The Heyday of Norwegian Shipping

The TV series Hvor seiler vi?, with its unvarnished presentation of
Norwegian sailors abroad, created a very heated debate in Norway. Many
people were offended by the suggestion that sailors in foreign ports had
an above-average interest in alcoholic drinks and the local nightlife. A
future Prime Minister, Jan Peder Syse, asked questions about the pro-
gramme in Parliament, urging the national broadcaster to correct the
“fake picture” that had been presented.68 A radio debate about Hvor seiler
66
Thowsen and Tenold (2006, 301); see also Murphy and Tenold (2008) for a more concise intro-
duction to the market.
67
Thowsen and Tenold (2006, 335–350).
68
Norway, Parliament, Forhandlinger i Stortinget nr. 207, 270170, 1649–1651. Syse, who had pre-
viously worked for the shipping company Wilh. Wilhelmsen, referred to the “dismay and sorrow”
that the programme had brought to many homes.
190 S. Tenold
vi? and its portrayal of Norwegian seafarers pushed “a suite for cello and
piano and a programme on archaeology and ghosts at Østre Toten” off
the broadcasting schedule on the country’s only radio channel.69
The TV series, and a subsequent book by a radical publisher, had a clear
political agenda. The interviewer, Gunnar Bull-Gundersen, had five years
earlier initiated a campaign that raised the minimum age for rookie sailors
from 15 to 16 years. In Hvor seiler vi? he presented seafarers’ lives in a man-
ner that was meant to stir debate: “If you don’t remember the programmes,
the subsequent debate in the newspapers is not easy to forget.”70
The widespread debate illustrates the central role that shipping
played in the Norwegian economy and society. In 1960 sailors were
based in all but two of the 734 municipalities in Norway—so Bull-
Gundersen managed to stir up practically the whole country.71 And
shipping was extremely important. According to the most comprehen-
sive report on the Norwegian economy, published by Statistics Norway
in 1965, “shipping plays the same role [in Norway] as large-scale manu-
facturing does in other countries – it is export-oriented, demands very
much capital and it attracts labour and initiatives that in other coun-
tries and in different circumstances perhaps would have gone towards
manufacturing.”72
In 1965 this was a good description of the Norwegian economy. Ten
years later, the picture was changing. Twenty years later, Norwegian ship-
ping had been dethroned from its hegemonic position.
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G.B. Gundersen (1970) Hvor seiler vi? (Oslo: Pax Forlag)
T. Halvorsen (2007) Vi seiler for velstand og lykke (Oslo: Pax)
T. Halvorsen (2010) ‘Vi var “degos, svartinger eller skjevøyde”. Utlendinger i
den norske handelsflåten 1950–75’, Arbeiderhistorie, 24, 203–223
192 S. Tenold
L. Johnman & H. Murphy (1998) ‘The Norwegian Market for British Shipbuilding,
1945–1967’, Scandinavian Economic History Review, XLVI, No. 2, 55–78
Y. Kaukiainen (2006) ‘Journey Costs, Terminal Costs and Ocean Tramp Freights:
How the Price of Distance Declined from the 1870s to the 2000s’,
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Shipping Technology, c. 1870–2000’, in G. Harlaftis, S. Tenold &
J.M. Valdaliso (2012) The World’s Key Industry; History and Economics of
International Shipping (Basingstoke: Palgrave Macmillan)
R.D. Knowles (2006) ‘Transport shaping space: differential collapse in time—
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S. Knutsen (1997) ‘Staten og norsk skipsfinansiering 1955–1975’, in
B.L. Basberg, H.W. Nordvik & G. Stang (eds) det lange løp. Essays i økono-
misk historie tilegnet Fritz Hodne (Bergen: Fagbokforlaget)
S. Knutsen, E. Lange & H.W. Nordvik (1998) Mellom næringsliv og politikk.
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M. Levinson (2006a) ‘Container Shipping and the Decline of New York,
1955–1975’, Business History Review, 80, 49–80
M. Levinson (2006b) The Box: How the Shipping Container Made the World
Smaller and the World Economy Bigger (Princeton: Princeton University Press)
H. Mayer (1973) ‘Some Aspects of Technological Change in Maritime
Transportation’, Economic Geography, 49:2, 145–155
E. Merok (2011) ‘After the Boom: The Political Economy of Shipping in Norway
in the Interwar Period,’ in L.R. Fischer & E. Lange (eds) New directions in
Norwegian maritime history (St. Johns: IMEHA) 125–150
H. Murphy (2013) ‘“No Longer Competitive with Continental Shipbuilders”:
British Shipbuilding and International Competition, 1930–1960’,
H. Murphy & S. Tenold (2008) ‘Strategies, market concentration and hege-
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National Research Council (1956) Longshore Safety Survey – A Survey of
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Forlag)
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the container revolution, 1963–75’, Scandinavian Economic History Review,
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Shipping: Swedish liner shipping and international consortia, 1960–75’,
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right holder.
7
The Shipping Crisis
The photograph of “The King taking the tram” has an iconic position in
Norway and is important for the population’s self-understanding: the
Norwegian monarch, King Olav, sitting relaxed and undisturbed on pub-
lic transport. The King is on his way to a ski trip on the outskirts of Oslo.
Presenting an image of Norway as a nation of egalitarians, where even the
royal family is down-to-earth, the photo also pays homage to its self-
perception as a nation of ski fanatics and outdoor adventurers. The pic-
ture was taken a week before Christmas Eve in 1973, when petrol
rationing had led to a ban on the use of private cars at weekends. Even the
King loyally respected the regulation, which was a short-term response to
the upheaval in the oil market, following the Yom Kippur War.1
The rationing of petrol reflected the dominant position of oil in the
world’s energy consumption. An ever-thirstier world economy had
come to rely on the Middle East to produce large amounts of low-cost
energy. When some of the taps were turned off, the steady stream of
cheap oil that had fuelled the post-war Golden Age was turned into a
trickle of expensive energy. The price increase had dramatic effects for
countries that produced oil (winners) and countries that imported oil
Andersen (1993, 3).

1

196 S. Tenold
(losers), as well as for the industries that used oil (just about every sin-
gle one). Moreover, the oil market turmoil had a massive effect on the
shipping companies that transported oil. A large number of these com-
panies were Norwegian, and now their market collapsed more or less
overnight.
From the Golden Age to Stagnation

There is no doubt that the 1973 oil crisis and the concomitant energy
shortage was a watershed in the development of post-war capitalism.
As Marc Levinson has pointed out in a recent book, “an economic
boom of extraordinary proportions” was replaced by “job loss, slower
wage growth, and pockets of seemingly intractable unemployment” in
most of the western world.2 The Golden Age had been characterized by
extremely low unemployment and controlled inflation in all Western
European countries. Now a new phenomenon, stagflation—high infla-
tion and unemployment, coupled with low economic growth—pre-
sented businesses and politicians with new dilemmas. Income and
productivity growth was more sluggish than before. Measures intended
to reduce inflation were expected to push up unemployment, and vice
versa.
Very specific circumstances had created the Golden Age, something
that was not obvious at the time. Instead, the sustained production and
productivity growth of the 1950s and 1960s had given a renewed belief
in the ability to engineer economic development and improve living
standards. The only way was up. Consequently, in 1974 and 1975 it
was not evident that the declining economic growth rates were perma-
nent. Few observers and decision-makers realized that the world econ-
omy was going through a structural development break, rather than
just another cyclical downturn, another temporary lull in growth. With
the beautiful benefit of hindsight, it is very clear that the international
economy was experiencing a negative structural shift, and it was a dra-
matic one.
Levinson (2016, 3 and 8).

2
The Shipping Crisis 197
Table 7.1 The break in development; output growth, inflation and unemploy-
ment, 1965–1985
1965–1973 1974–1979 1980–1985
Real output growth (%) 4.9 2.8 2.1
Inflation (%) 5.1 9.0 7.7
Unemployment (%) 3.1* 4.9* 6.9*
Source: OECD (1977, 70; 1999, 45). Confer footnote
As Table 7.1 shows, there was a clear break in economic development

after 1973.3 Economic indicators moved in the wrong direction.
Politicians were confused and resorted to a long list of unsuccessful mea-
sures. Countries variously introduced import restrictions, deflationary
budgeting, interest rate increases, higher value-added taxes, higher taxes
in general, export promotion policies, expansive countercyclical policies,
contractive austerity programmes, and so on. European governments
used all the arrows in their economic policy quiver. They aimed in all
directions. They hardly hit anything.
The high economic growth of the Golden Age was replaced by much
more sober growth rates. Norway was no exception to the shift, but in
the first post-war decades Norway’s growth rates had been very much
“middle-of-the-road” in a European perspective. Some even referred to
“the Norwegian paradox”—despite very high investments, Gross Domestic
Product (GDP) growth was decidedly average.4 However, the country’s
emergence as an exporter of petroleum in the 1970s implied a softer land-
ing than in most other countries. As Fig. 7.1 illustrates, Norwegian growth
rates went from being below the Western European and world averages
1950–1973, to above these averages in the period 1973–2001.5 While eco-
nomic growth in Western Europe was more than halved between these two
periods, the decline in Norwegian growth rates was around 20 per cent.
3
Calculated by the author based on OECD (1977, 70; 1999, 45). Unemployment figures refer to
1960–1973, 1974–1979 and 1980–1989, respectively, and only refer to the United States, Japan,
Germany, France, Italy, the UK and Canada.
4
Seland (1994, 153).
5
Figure 7.1: Calculated on the basis of data from Maddison (2003).The charts refer to compound
average growth of GDP, measured in fixed prices and based on purchasing power parity (PPP)—see
the source for details. The 12 countries included in the category “Western Europe” are Austria,
Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Sweden,
Switzerland and the UK.
198 S. Tenold
6
1950-73
5
1973-2001
4
0
France
Germany
Italy
Austria
The Netherlands
Belgium
Finland
W Europe
World
Switzerland
Norway
Denmark
Sweden
The UK
Fig. 7.1 Average economic growth, based on PPP-adjusted GDP, 1950–73 and
1973–2001. (Source: Maddison (2003), confer footnote)
In the long term the oil price increase had a beneficial effect on the
Norwegian economy, paving the way for the country’s advance towards
the top of the list of the world’s wealthiest countries. For the Norwegian
shipping sector, however, the effect was disastrous. As a result of the price
hike, shipping was dethroned as the leading export sector, while the chal-
lenger—offshore oil production—became more powerful than it would
otherwise have been.
The Shipping Crisis

From the middle of the 1970s to the middle of the 1980s, the shipping
sector went through a crisis that was longer, deeper and more dramatic
than any other previous downturn.6 The tonnage surplus in the early
1920s was higher, but a profitable market returned relatively quickly, and
6
In Tenold (2000, 332–333) it is suggested that it might be useful to consider the problems as two
distinct, but related, crises. The first one was caused by demand stagnation and tonnage growth, the
second one by an absolute reduction of tanker demand that aggravated the situation even further.
Such a distinction makes sense in a long and detailed analysis of the problems of the 1970s and
1980s, but does not add much to our broader presentation.
the crisis therefore did not have any fundamental long-term effects. The
problems during and after the Great Depression lasted longer than those
in the 1920s, and the shipping sector had to cope with five years of high
lay-up rates. Still, this was a shorter downturn than the one in the 1970s
and 1980s. Moreover, the overcapacity during the 1930s was smaller,
both in absolute and relative terms.
In the short term, the shipping crisis was characterized by falling
freight rates, increasing lay-up rates and vanishing shipping company
profits. Freight rates in the tanker market declined almost instanta-
neously, with rates in the spot market for large tankers falling by more
than 75 per cent from October to December 1973.7 Relatively soon, it
became difficult to find employment even at the new depressed rate
level—the oil companies reserved the cargoes for their own ships and
those they had taken on long-term charters. By the beginning of 1976
more than 100 million dead weight tons (dwt) of tanker tonnage—
almost 20 per cent of the fleet—had been laid up. The negative operating
results—in many instances coming on top of high financial burdens—
seriously depleted the shipping companies’ funds.
In the longer term, the crisis led to fundamental changes in vessel own-
ership and operation, and had severe ramifications for the shipbuilding
industry as well. Shipping companies went bankrupt, vessels were
reflagged to low-cost registries and the leading shipping nations were
forced to change their maritime policies. Some ships were taken over by
the creditors, who appointed management companies to oversee their
operation. The crisis also sounded the death knell for large-scale ship-
building in most of Western Europe. After a period of heavy subsidiza-
tion, European governments realized that it would be impossible to
compete with Asian yards in the high-volume segment of the shipbuild-
ing business. Shipyards—often situated in central city locations—became
offices, shopping centres, hotels or exclusive apartments.8
7
The spot market is the most inelastic part of the shipping market, where ships are hired on a
voyage-by-voyage basis. In periods of tonnage shortage, the sky is the limit. Calculated on the basis
of the rate from the Persian Gulf to the UK/Continent, monthly figures, from Fearnley & Egers
Chartering Co., Review 1973, 23.
8
See Todd (1981, 2011) and Bruno and Tenold (2011). In Chap. 4 we looked at the success of
Sweden and Denmark in interwar shipbuilding. When the market collapsed, the trajectory of
shipbuilding in these two countries was very different; see Stråth (1987) (for Sweden) and Poulsen
and Sornn-Friese (2011), Poulsen (2013) and Olesen (2013) (for Denmark).
200 S. Tenold
Shipowners, desperate to get at least some income, accepted part car-

goes and reduced the speed of their ships in order to lower fuel costs.
Some ships were used for storage of oil and other cargoes, while a sub-
stantial part of the fleet was laid up without any employment at all. These
measures soaked up part of the oversupply. In the Norwegian fjords and
the bays and inlets of Greece, the large number of mothballed ships made
the crisis in the sector evident even for the non-specialists.9 The tanker
overcapacity peaked at more than 100 per cent in the spring of 1983. At
that time, the basic demand was around 137 million dwt, while the fleet
of tanker and combination carriers amounted to more than 300 million
dwt. In other words, there were two ships for every cargo that needed
transport.10 How did the market end up with such an imbalance?
The simple answer to that question is that there was an enormous dis-
crepancy between the expected and the actual development. The oil price
increase signalled the end of the era of cheap energy, and consumers and
businesses adapted accordingly. The laws of supply and demand worked.
When the oil price shot up, demand was reduced. Oil consumption in
the Organization for Economic Cooperation and Development (OECD)
countries fell by almost 15 per cent, from 37.4 million barrels daily in
1973 to 32.2 million barrels per day in 1982. In 1973, the US Treasury
expected that the country’s oil consumption in 1980 would amount to
around 25 million barrels daily—the actual consumption was 16.5 mil-
lion. Three years later the actual US imports of oil were less than half of
what had been expected a decade earlier.11
The oil price increase paved the way for a shock in the tanker market
that exceeded the expectations of even the gloomiest pessimists. The con-
sumption decline was in itself problematic. To make matters worse, the
demand for tanker transport fell over and above this, in a period where
there were expectations of growth. A 1970 report from the Norwegian
9
At one point in the early 1980s, more than 400 ships were laid up in Eleusis Bay, a sheltered basin
relatively close to the Greek shipping centre, Piraeus.
10
Jenkins, Stopford and Tyler (1993), Tables III.12–III.25. Around a quarter of the surplus was
neutralized by the acceptance of part cargoes, ships used for storage and waiting time in ports.
More than 30 million dwt of tanker tonnage was laid up, while the rest of the surplus was absorbed
by slow-steaming ships.
11
Farrell (1985, 381), Ahrari (1986, 37) and British Petroleum (1984, 7–8 and 16).
Research Council presented a projection of expected tonnage demand in

the future. Their base scenario was that a tanker fleet of 450 million dwt
would be needed in 1985, with a low projection of 395 million dwt and
a high projection of 505 million dwt.12 In reality, even the low-case sce-
nario suggested three times more tonnage than what was actually needed.
Given the enormity and unpredictability of the change—the term “oil
shock” is used for a reason—it is easier to understand why the projections
were so spectacularly wrong. We have to remember that the demand for
oil transport had grown practically every single peacetime year for more
than a century. Over the last 10 years before 1974, the annual demand
increase had been around 17 per cent. What would be a likely “worst-
case” scenario for development over the next decade? Even the Norwegian
report’s “worst-case” prediction—where growth fell from 17 to 6.5 per
cent annually—turned out to be way too optimistic.
Within oil and shipping, practically everybody believed that the
growth would continue. Anyone forecasting the actual development—a
reduction in demand of almost 60 per cent from 1974 to 1985—would
undoubtedly have been ridiculed and laughed out of the boardroom.
Figure 7.2 illustrates the dramatic shift in the development of tanker
demand. In particular, the shift in the trend between the periods
1962–1973 and 1974–1985 is spectacular.13 The demand for tanker
transport multiplied by a factor of more than 5.5 in the first of these
periods. In the second, the initial stagnation was followed by a strong
drop.
Even though demand development, as seen in Fig. 7.2, is extremely
dramatic, it tells only half the story. Due to the strong increase in demand
before the oil price increase, and periodic shortages of tanker tonnage
that had given some spectacular spikes in the rate level, tanker owners
had large amounts of newbuildings on order when the demand collapsed.
There was clearly no need for these ships when they were delivered—they
only added to the already huge amount of superfluous tonnage.
12
Dahl (1970, 18). The source of the chart showing the estimated tonnage demand in the report
from the Norwegian Research Council is simply listed as Det norske Veritas. Clearly, the researchers
were too busy to predict the future to be interested in proper referencing.
13
Figure 7.2: Calculated on the basis of the demand for the transport of crude oil in Fearnley &
Egers Chartering Co., Review, various issues, Table 2.
202 S. Tenold
12000
Demand
10000
Trend 1962-73
8000
Trend 1974-85
6000
4000
2000
0
1962
1973
1975
1977
1979
1981
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1974
1976
1978
1980
1982
1983
1984
1985
Fig. 7.2 Seaborne crude oil transport demand, trillion ton-miles, 1962–1973 and
1974–1985. (Source: Authors’ calculations based on Fearnley & Eger’s Review; con-
fer footnote)
Figure 7.3 is an index showing the large and growing imbalance

between tanker demand and supply during the crisis.14 It is evident that
the initial problems, from 1973 to 1978, were caused by new deliveries
of ships in a stagnating market. In the first half of the 1980s, there was a
strong reduction of the demand for tanker transport, which even a grad-
ual pruning of the fleet was unable to neutralize. By the middle of the
decade, the demand for tanker transports had fully relapsed, matching
the level it had held in 1967, which was more than 20 per cent lower than
demand in 1970. The main problem was that there was more than twice
as much tanker capacity to do the job.
The problems from the tanker market spilled over to other shipping seg-
ments. The dry bulk market had initially developed positively—as oil
became more expensive, there was a growth in the transport of relatively
low-cost coal. However, the dry bulk market was soon flooded with com-
bination carriers that were unable to find profitable employment within oil
Figure 7.3: Calculated on the basis of the demand for the transport of crude oil and oil products
14
measured in ton-miles, as well as the fleet of tankers measured in dead weight tons, in Fearnley &
Egers Chartering Co., Review, various issues, Tables 2 and 3.
300
Tanker fleet
250
Oil transport demand
200
150
100
50
0
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
Fig. 7.3 Supply and demand in the tanker market (1970 = 100), 1970–1987.
(Source: Authors’ calculations based on Fearnley & Eger’s Review; confer
footnote)
transport. As the 1970s progressed, the conversion of tanker newbuilding

orders to other types of vessels added to the problems in other segments.
Moreover, the shipbuilding countries’ subsidization of newbuildings—
selling ships below construction cost in order to maintain activity in the
shipyards—contributed to the contagion of the crisis. By the late 1970s
not a single segment of the shipping market was untouched by the crisis.
However, the problems were particularly strong in the tanker sector—the
shipping segment that had been something of a Norwegian specialty for
almost half a century.
The Tables Turned: Too Many Tankers

According to an old Norwegian proverb, “The sea gives and the sea takes.”
This was what happened in the 1970s. When the international oil cartel,
the Organization of Petroleum Exporting Countries (OPEC), raised oil
prices in 1973–1974 and then again in 1978–1979, the effects on the
Norwegian economy were ambiguous. First, the oil price increase implied
a strong growth in the revenues from Norway’s nascent production of
204 S. Tenold
offshore oil. The price hike made North Sea oil vastly more profitable.
Second, the sudden price increase signalled the start of a more than
15-year-long crisis in the main shipping markets. This depression hit
Norwegian owners particularly hard.
As a result of the OPEC-orchestrated oil price increase, the strategy that
Norwegian shipping companies had successfully followed over the preced-
ing decades became toxic. The Norwegian shipping industry had a par-
ticularly unfortunate fate due to its disproportionately high investments in
tankers, and other strategic parameters amplified the problems. The comp-
naies had relatively new ships, relatively large ships and had refrained from
ensuring employment through long-term charters. These were exactly the
strategic choices that were punished most severely as tanker demand
shifted from boom to stagnation, before completely collapsing.
By following an expansive “economies of scale” strategy, with frequent
replacement of tonnage by newer and larger ships, Norwegian tanker
owners had been very successful in the growth period of the first post-war
decades. During the Golden Age the demand for tanker transport had
expanded rapidly. As oil consumption increased, oil fields far away from
the consumption centres became more important and the 1967 closure
of the Suez Canal added to the increase in average distances. When ships
had to go around the Cape of Good Hope to carry oil from the Arabian
Gulf to Europe, the existing fleet was unable to keep up with demand. As
freight rates soared, vessel values increased rapidly as well.
It is important to remember that second-hand values in shipping do
not automatically follow the downward trend seen for most investment
objects—machinery, buildings and cars. Instead, the value of shipping
tonnage follows the freight rate cycle relatively closely, and might go up
as well as down. The long-term decline in the value of a ship is typically
portioned out over a period of 20–30 years, and variations from one year
to the next might be much stronger than this trend—adding to the value
or exacerbating the reduction. Consequently, if the timing is right, it is
possible to buy tonnage, operate it profitably, and then sell it after several
years at additional profit.
The cyclicality had implications both for shipping companies and their
sources of capital. In the period before the tanker market collapsed, ships
were considered “floating real estate”—there were few instances of prob-
lematic loans to the shipping sector.15 Such price movements should

make the shipping market particularly interesting for speculators and
gamblers, but the majority of the participants at the time invested in
ships with a long-term, operational focus. There were few instances of
purely speculative newbuilding activity. This does not mean that ship-
ping companies did not take risks. However, this risk was more related to
the rate of expansion and the companies’ gearing (the proportion of loan
finance, in other words the size of the debt relative to the equity), rather
than to “speculative” investments aimed at taking advantage of variations
in the value of the ship—so-called asset play.
A fundamental feature of the oil tanker market is the combination of
long periods of relatively depressed freight rates with short-lived boom
periods. This discovery goes back to the very first research on the market,
and continues to be valid.16 During such peaks, freight rates may exceed
operating costs by a factor of five, 10 or more, giving massive profits.
Owners may recover their investment very quickly, needing only a hand-
ful of voyages, if they are lucky. In the period before the oil price increase
there was a latent demand surplus in the tanker market, with frequent
cyclical peaks. Tanker owners were making large amounts of money in
1967, in 1971 and again in 1973. The positive sentiment spilled over
from freight rates to ship prices. An 80,000 dwt oil tanker, built in
1966–1967, could be sold for more than the original purchase price in
every single year from 1969 to 1973. Someone buying this ship second-
hand in 1968 would be able to sell it with a profit of almost 150 per cent
two years later.17
After the market collapsed, ship prices followed suit—and the flexibility
of vessel values implies high speed on the way down as well as on the way
up. A modern turbine tanker of 220,000 dwt, which was valued at more
15
See Stokes (1992, 25)—and keep in mind that Peter Stokes wrote this in a period when a decline
in the value of real estate appeared far-fetched. Today, the metaphor is less convincing. Based on
their experiences in the middle of the 1990s and during the 2008 financial crisis, owners and banks
in Europe and the United States are fully aware that there are risks involved in real estate invest-
ments. They have learned the hard way.
16
See Koopmans (1939) and Zannetos (1966) for the theoretical and historical view, and any chart
of the tanker market showing the development over the last five, 10, 15 or 20 years to confirm that
the old ideas are still valid.
17
Based on price information in Fearnley & Egers Chartering Co., Review, various issues.
206 S. Tenold
than USD50 million in 1973, was only worth USD23 million the follow-
ing year. By 1975 the value had fallen to USD10 million—a reduction of
more than 80 per cent relative to the peak two years earlier. The depressed
market kept vessel values low. At the same time, the newbuildings that
eager shipping companies had ordered during the heyday were delivered.
The combination of falling demand and increasing supply created an
imbalance that threatened the shipping sector’s existence in Norway.
The Norwegian predicament can be seen as a negative reflection of
the success in the preceding decades. Broadly speaking, the choices that
made many Norwegian tanker companies successful during the Golden
Age, came back to haunt them after the oil price increase. Table 7.2
compares the situation in Norwegian shipping with the international
situation around the start of the shipping crisis. The second and third
columns of the table provide what we today know were the “ideal”
strategic parameters during the Golden Age and the shipping crisis,
respectively.
As Table 7.2 shows, with regard to eight of the nine fundamental
parameters, the Norwegian shipping sector was favourably positioned
Table 7.2 From good to bad—a comparison of strategic indicators at the start of
the shipping crisis
Best strategy in Best strategy World
the Golden Age during crisis Norway fleet
Tanker share (%) High Low 60.1 46.5
Average tanker size High Low 96 63
(1000 dwt)
Orderbook as share of High Low 126 88
fleet (%)
Average size orders High Low 194 171
(1000 dwt)
Supertanker share (%) High Low 19.7 12.2
Turbine tanker share High Low 30.8 35.5
(%)
Average age (years) Low High 5.7 8.1
Spot market share (%) High Low 26.1 13.1
Unfixed newbuildings High Low 80 31
(%)
Sources: See footnote
in the years before 1973 and adversely placed once the oil price
increased and the tanker market broke down.18 To make matters worse,
even the single “positive parameter” was negative if we consider it more
broadly.19
How can we explain the dominant Norwegian strategy, which was so
eminently adapted to the Golden Age and failed so spectacularly when
the market collapsed? In a macro-perspective, business strategies are
determined at the point where the skills, resources and culture of a com-
pany meet and respond to constraints and incentives imposed from the
outside. There might thus be both internal and external explanations for
Norwegian choices.
18
Table 7.2: Compiled on the basis of a variety of sources from the first part of the 1970s. See the
comments to the individual series for details. Tanker share refers to gross tonnage of oil tankers and
combination carriers above 100 gross tons from Lloyd’s Register of Shipping Statistical Tables 1973,
Table 2 and is therefore a conservative measure.
Average tanker size (1000 dwt): data for vessels above 10,000 dwt in 1973 from Review 1973.
World fleet figures include the Norwegian fleet. Again, this is a conservative measure. Based on the
data from Lloyd’s Register of Shipping Statistical Tables 1973, Table 2 the average size of the
Norwegian tankers and combination carriers (37,754 gross tons) is more than twice the average size
of the non-Norwegian tankers and combination carriers (18,345).
Orderbook as share of the fleet (%): Data for 1974, from Review 1974. This year was chosen in
order to neutralize the effect of newbuildings cancelled after the freight market broke down. World
fleet figures include the Norwegian fleet.
Average size orders (1000 dwt): data for 1973 for tankers above 10,000 dwt in 1973 from Review
1973.
Supertanker share (%) based on Lloyds Statistical Tables 1973, Tables 3 and 8, calculated on the
basis of gross register tonnage. The share refers to the tonnage of tankers larger than 100,000 gross
register tons as a proportion of the total fleet.
Turbine tanker share (%): data for 1975 calculated on the basis of Statistics Norway (1984, 45
and 102).
Average age (years): data for 1974 from Lloyd’s Register of Shipping Statistical Tables 1974, Table 8.
The average of the age groups is used when the data are weighted on the basis of tonnage.
Spot market share (%): data from 1973 from Jenkins, Stopford and Tyler (1993, 82–95). World
fleet does not include Norwegian fleet.
Unfixed newbuildings (%): data from January 1974 from the Norwegian shipbroker Johan
G. Olsen; see Tenold (2000, 185–191).
19
When we look more closely at propulsion—the share of turbine tankers, which is the only factor
where Norway did relatively well—the situation was less positive than it appears from the table. If
we include the propulsion of the ships on order, even this last indicator becomes unfavourable from
a Norwegian perspective. The proportion of turbine-driven vessels in the Norwegian fleet increased
from 30.8 per cent in 1975 to 38.2 per cent three years later. Over the same period, the proportion
for the world fleet fell from 35.5 to 33.3 per cent; see Tenold (2000, 165).
208 S. Tenold
There are several internal candidates: perhaps Norwegian owners were

more optimistic (or perhaps more naïve) than their foreign competitors?
Maybe they were more willing to take risks, or evaluated risk differently,
than shipping companies in other countries? Did their long legacy of
tanker shipping make it difficult to see the alternatives, or did it make
them consider the alternatives differently? Had their success made them
speed-blind? Maybe they all looked at their neighbours, following each
other—like sheep or lemmings—to the edge of the cliff and beyond?
The questions above all hint at failures at the micro-business level.
However, the basis for the Norwegian problems could be structural.
There might be external explanations pertaining to Norwegian shipping
in general that can explain the groupthink. In the previous chapter we
saw that the Norwegian setting advocated investment in large tankers.
Maybe the operating conditions—the political framework—limited the
alternatives that Norwegian shipowners could consider? Did they just
adapt rationally to a tax system that strongly encouraged reinvestment?
Perhaps Norwegian owners were lured by cheap money, generous yard
credits and unrealistic projections of transport demand?
As is often the case, both explanatory angles are relevant.
The focus on tankers clearly had a long pedigree. As we have seen, the
pioneering tanker investments in the interwar period made the
Norwegians stand out in an otherwise difficult market. In 1960—before
the strong upsurge in tanker demand, and a decade-and-a-half before the
market collapsed—132 of the 164 large Norwegian shipping companies
(80 per cent) had invested in tanker tonnage. For 37 of these companies,
there was no diversification at all—tankers were their only investment. In
fact, though the Norwegian companies were “overexposed” to the tanker
market in 1973, they had been even more so in 1960.
In 1973 tankers made up more than 60 per cent of the Norwegian
tonnage, compared with less than half of the world fleet.20 The only
countries with more tanker tonnage were Liberia, the UK and Japan—
but a substantial portion of the ships in these countries were owned by oil
20
The Liberian share was marginally more than 70 per cent, but much of this was owned by oil
companies and ensured employment. Liberian lay-up rates in the second half of the 1970s were less
than half of the Norwegian ones; Tenold (2000, 153–155).
companies or trading houses that also owned the cargo. These ships were
less affected by the tonnage surplus.
Norway had since the early days of tanker shipping controlled the
world’s largest independent tanker fleet, and this had been a profitable
strategy. Long traditions can make it difficult for companies to consider
alternatives, and changing strategies may be time-consuming—this is
what business historians refer to as path dependence. Furthermore, long
successful traditions can lead to hubris, the short-sighted—even blind—
belief that the next boom is just around the corner and a failure to appre-
ciate that this time it is different.
Research has indicated that there was an idiosyncratic optimism and a
willingness to take risks among Norwegian tanker owners. In 1970 two
economists presented a group of Scandinavian tanker owners with a series
of hypothetical investment alternatives in order to uncover their attitudes
towards risk. The results were astonishing. All but one of the shipowners
preferred the risky alternatives to the safe alternatives, even when expected
return was the same. In fact, the article was rejected by the editor of the
Journal of Political Economy because he did not believe that company
directors with such a willingness to take risk existed.21
This attitude was not confined to those involved in the study. At an
overall level, Norwegian shipping executives were clearly optimistic about
the tanker sector and willing to channel much of their resources into that
market segment. The tanker strategy had served them well for decades: it
was expected to serve them well in the future. Still, it would be wrong to
blame only the shipping companies for the malaise. There was a struc-
tural basis for the crisis as well; an institutional setting that made the
unfortunate strategic choices particularly attractive.
Norwegian shipping companies had been eminently placed to reap the
benefits of the expansion of seaborne oil transport. Cost increases had
pressed the margins in the 1950s and the 1960s, but many tanker owners
had experienced shorter bursts of spectacular revenues that made them
21
The analyses were subsequently published elsewhere; Lorange and Norman (1972, 1973).
Interestingly, the two academics behind the survey later became involved in the shipping industry,
at the Board and ownership level. They had considerably more success than the majority of their
research objects, more than half of whom had gone out of business 10 years after the study—see
Norman (2012, 207).
210 S. Tenold
forget the periods of low activity. Typically, the profits were reinvested in
even more tankers, larger and more expensive than before.
As we have seen, the main alternative for the shipping companies
would be to pay dividends, which were heavily taxed. It was better to
obtain even more profitable tonnage. As one shipbroker put it: “instead
of letting the company pay more than 50 per cent tax on the profit from
the sale of a ship, [many shipowners] prefer to build a new ship and use
the profits for depreciation. In other words – to put it a bit bluntly – the
taxman’s money is used for reinvestment.”22 The taxation of profits was
high in an international perspective.23 If the company continuously rein-
vested its profits, however, the actual tax rate was close to zero.
The institutional setting—where relative costs and the effects of the tax
system encouraged frequent reinvestment in larger and larger ships—
does not exonerate Norwegian shipping companies. Still, it explains why
they had made the “wrong” choices, why supertankers were the favoured
investment object. Moreover, just like these supertankers, the response
time was very long if the companies wanted to change course. An ultra
large crude carrier (ULCC) would need almost a minute to turn 20
degrees, and would move two ships’ lengths in the process.24 Norwegian
shipping companies, with resources and competences vested in the tanker
segment, could not jump from one strategy to another when the market
collapsed. Due to existing ships and contracts, the course was set. And
they were going in the wrong direction.
Although the tanker market changed more or less overnight, the
impact was not felt immediately by the shipping companies. The solid
market in the first part of the year meant that many had record profits in
1973, and quite a large portion of the fleet was committed to charters
that ensured revenues, at least for the next year or so.
By 1975 it was evident that the crisis was dragging on. Any hope that
the downturn in the shipping market was short-lived—like it had been in
22
Gram (1979, 110). Access to depreciation exceeding 100 per cent of the value of the contract or
accelerated depreciation made reinvestment extremely favourable and ensured a strong link
between policy and strategy.
23
A comparison from the early 1960s suggests that Norwegian taxes were 40 times higher than
those shipping companies using the Liberian or Panamanian flag would pay; Seland (1960, 11).
24
Dahl (1970, 31).
the late 1960s and in the early 1970s—was too optimistic. The most
unfortunately positioned shipping companies had already been forced to
have “the difficult chat” with the banks—their cashflows had dried up,
and the drop in ship values had hit the balance sheets hard.
The first major Norwegian owner to encounter serious problems was
Hilmar Reksten. His enormous success in the period when the market
was going up was overshadowed by his spectacular crash when the
market collapsed. In the international press he was presented as a mav-
erick, a shy and reserved tycoon, and a sober Nordic counterpart to the
Greek playboys Onassis and Niarchos, whose flamboyant lifestyles
filled the pages of the gossip magazines on both sides of the Atlantic.
With a strategy focused on the spot market, Reksten’s ships rapidly became
surplus to requirements. Moreover, Reksten had an extremely expansive new-
building programme—ships that would come on stream in a market where
there was absolutely no need for them. In May 1975, in a secret session, the
Norwegian Parliament bought Hilmar Reksten’s shares in a large number of
Norwegian and foreign companies to alleviate his financial problems.
The secret decision to help Hilmar Reksten’s companies provided only
short-term relief, though. His outstanding loans and newbuilding obliga-
tions were too high. From 1975 onwards, many tanker owners found
themselves in a similar situation. Even a more far-reaching government
solution was insufficient.
overnment Involvement: The Guarantee

G
Institute
For more than a century, the shipping industry in Norway had developed
within the framework of a neutral or benign political regime that only in
shorter periods had negative effects. The important role of shipping in
the Norwegian economy and exports had given the industry political
clout and influence, and the rebuilding of the fleet in the first years after
the Second World War is an example that the industry was given political
priority when necessary.25
Still, the ban on contracting from 1949 onwards indicates that this political priority was not an
25
absolute right—the policy sometimes changed at short notice.

212 S. Tenold
By 1975 the crisis in the shipping sector had become so serious that
the authorities saw the need for more far-reaching involvement. The
expansive Norwegian newbuilding strategy had, to a large extent, been
financed by means of retained equity and foreign loans. Many companies
found it difficult to comply with the loan terms when revenues vanished,
and therefore ended up in breach of their covenants. A particularly diffi-
cult element was the “minimum value clause”—a staple of ship financing
contracts—where the lender could demand forced instalments, extra col-
lateral or the sale of the vessel if the value dropped below a certain amount.
As a result of the 80 per cent drop in the value of new ships, most expand-
ing shipping companies were in trouble. Moreover, as a number of vessels
had been ordered by partnerships—where two or more companies shared
liability—the financial problems of one owner could quickly spread to
others.
Officially, the Guarantee Institute for Ships and Drilling Vessels Ltd.
(GI) was established to alleviate this problem. When the government
provided guarantees for the ships’ financing, the creditors no longer had
any incentive to force the owners to sell. The premise for the GI was the
idea that the crisis was a temporary phenomenon and that some sort of
market failure for second-hand ships justified government intervention.
The aim of the GI was to ensure that tonnage was kept under Norwegian
ownership, rather than sold abroad at prices that did not reflect the
long-term value. Assets were to be kept on Norwegian hands until their
fair value could be recouped.
With vessel values in free fall, very few of the modern, mortgage-
financed ships did not violate the minimum value clause. Some shipping
companies were in a financial situation where they were able to negotiate
with the banks, using lucrative long-term charters or alternative assets as
collateral. For other shipping companies, typically those with a large
share of tonnage laid up and high financial exposure, the GI provided the
financing institutions with guarantees that the mortgages would be hon-
oured. The authorities thus bought time for the shipping companies until
values recovered.
However, the politicians clearly had ulterior motives. Among those
that would benefit from the arrangement were Norwegian shipyards, and
in particular the Aker group. The Aker group had expanded massively,
and a large share of its orders were related to three shipowners—Biørn

Biørnstad & Co., Hagbart Waage and Hilmar Reksten—who had taken
the Norwegian large-tanker, spot-market operation strategy to an extreme
level. If these shipowners failed, it was likely that the Aker group, Norway’s
largest manufacturing employer, would be caught in the slipstream.
Throughout the post-war period, ship financing had been one of the
most important links between the Norwegian and international financial
markets. A wave of shipping bankruptcies would undoubtedly harm
Norway’s reputation internationally, something that would be very prob-
lematic for a country that depended upon foreign funding to build up
petroleum production in the North Sea. Again, government guarantees
bought time and solved the immediate problem.
In the end, however, the Guarantee Institute was a band aid on an
open wound. The shipping market did not recover as expected.
Consequently, the ships that the guarantees covered never regained their
fair value—this was a concept that only existed in the heads of politicians
and bureaucrats, and certainly not in the market place. In the early 1980s
the arrangement was largely disbanded, at a significant loss to the
Norwegian tax payers, though the GI lived on in the Norwegian court
system well into the new millennium.
The GI, the most far-reaching government involvement in shipping
in peacetime, was not a success, but an expensive lesson. The unfortu-
nate end result can be explained by the depth and, in particular, the
longevity of the tanker crisis.26 In fact, for the drilling rigs, which had
been included in the arrangement due to challenges that were identical
to those in the tanker market, the scheme was an unconditional suc-
cess. Demand picked up, the rates recovered—and the vessels regained
their value. For shipping, a brief market upturn around the turn of the
decade turned out to provide only very temporary relief. In the 1980s
the crisis broadened, affecting new market segments and new compa-
nies. By the middle of the decade there was hardly a single company
that had a solid financial situation, and many had already been forced
to give up.
However, given that the Aker group survived, and Norway’s international financial standing was
26
unhurt, the question of whether the arrangement was a success or not could be modified.
214 S. Tenold
The Decline of Norwegian Shipping

The shipping crisis had profound effects on the Norwegian shipping
industry and led to several structural changes.27 The industry became
more concentrated in the major shipping centres, Oslo and Bergen.
Many smaller ports along the coast saw their last ocean-going ships disap-
pear—scrapped or sold abroad as a result of lost competitiveness. There
was also a concentration of ownership in general. Most of the large ship-
ping companies survived the crisis—often at the mercy of their banks,
and with original ownership heavily diluted. For smaller companies, it
was more difficult to convince the creditors that the best strategy would
be to keep the company alive. Many of the banks that entered ship financ-
ing in the late 1960s and early 1970s—enticed by the upward trend in
asset prices—wanted to withdraw quickly and cut their losses, when their
fingers were burnt.
The extreme manner in which the crisis changed the fabric of
Norwegian shipping can be illustrated by looking at the population of
Norwegian tanker companies. If we take as our point of departure the
105 companies that owned tankers in 1939, almost two-thirds survived
the war and the first post-war decades. However, of the 69 companies
that survived the 31 years from 1939 to 1970, more than two-thirds
disappeared during the period 1970–1987; by 1987 only 21 of the com-
panies had Norwegian-flagged ships. If we add the companies managing
ships registered abroad, the number increases to 32, but this still implied
that more than half of the “survivors” from 1939 succumbed during the
crisis.28
Figure 7.4 presents five indices that show the decline of Norwegian
shipping along several dimensions—tonnage (tankers and total), the
number of shipping companies, employment in foreign-going shipping
27
For an impressively pedestrian walk-through of practically every change in companies and ports
from 1970 to 1987, see Tenold (2000, 258–330).
28
Tenold (2006, 130–132). The starting point here is 105 companies in 1939, whereas Chap. 4
suggests that there were 107 tanker companies that year. The difference is due to the fact that four
companies that merged in the period 1939–1970 have been counted as two companies in the 1939
figure.
180
160
140
120
100
80
60
40
Non-tankers Tankers Employment
20
Companies Net Freight Earnings
0
1970
1972
1974
1976
1977
1979
1981
1983
1984
1986
1971
1973
1975
1978
1980
1982
1985
1987
Fig. 7.4 The crisis index. The Norwegian fleet and tankers, number of seafarers
and shipping companies and net freight earnings (1970 = 100), 1970–1987
and net freight earnings.29 The extent of the decline over the period
varies—from almost 80 per cent in the case of net freight earnings, to
slightly less than 60 per cent in the case of the tanker fleet—but it is evi-
dent that all indicators developed very unfavourably.30 At the same time,
29
Figure 7.4: Calculated by the author on the basis of the following sources:
Tonnage data: Statistics Norway (1994, 481). Based on the gross tonnage of vessels larger than
100 gross register tons.
Number of shipping companies: calculated on the basis of the data set presented in Tenold
(2000, 278–308), covering all Norwegian shipping companies that owned vessels larger than 5000
gross register tons. However, relative to the figures presented there, companies that only owned
drilling vessels have been deleted.
Employment: crew on board vessels registered in the Norwegian ship register, foreign-going
trade only. In 1980 the reporting of employment figures changed, when seafarers on smaller ships
and restaurant personnel on crew ships became included in the public statistics, and the data have
been adjusted to neutralize the effects of this change.
Net freight earnings: Statistics Norway (1994, 545), deflated by Grytten (2004). Net freight earn-
ings provides a better reflection of the contribution of shipping to the Norwegian economy than gross
freight earnings, as it deducts expenses accrued abroad, and thus shows how much money shipping
companies “brought home,” In the period, the proportion of gross freight earning that was brought
home was halved, from around 60 per cent in the early 1970s to around 30 per cent 1982–1987. This
partly reflected a structural change, towards shipping segments with a higher proportion of costs
abroad, and partly the fact that prices abroad had less downward flexibility than freight rates.
30
If we compare with the peak, rather than 1970, the decline in the tanker fleet is more than 75 per
cent.
216 S. Tenold
the indices show different development patterns. These can be used to

explain the unfolding of the crisis and how it manifested itself in
Norwegian shipping.
The tonnage data reveal the optimism at the start of the decade. The
fleet growth is relatively similar for the tankers and for the fleet as a whole
in the period 1970–1973. Subsequently, the tanker fleet starts to grow
more rapidly, reflecting the high ordering during the boom. At the peak
at the beginning of 1977, the tanker fleet had increased by 69 per cent
relative to 1970, while the non-tanker fleet had increased by about a
quarter. The fact that the tanker fleet continued to grow for four years
after the freight market had broken down, can be explained by the lag
between the ordering and delivery of vessels. Such lags are particularly
long during boom periods such as in the early 1970s—the amount of
tanker tonnage on order more than trebled from 1970 to 1974.
The indices also reveal the strong relationship between the shipping
cycles and the fleet development. There was a short reversal of the post-
1977 fleet decline in 1982. This atypical growth in a period of practically
constant decline was a result of vessels ordered during a brief improve-
ment in freight rates. In 1979 and 1980 lay-up rates declined to around
3 per cent—after having been more than 10 per cent the previous year
and more than 20 per cent in 1977—and freight rates increased mark-
edly. The effects are seen both in the levelling out of the freight earnings
during 1979–1981 and in the deliveries of new tonnage in 1982—by
which time there was already a tonnage surplus again.
Shipping employment and the number of shipping companies did not
show any growth, even before the tanker market collapsed. For the
employment figures, the decline registered in the early 1970s can be
explained by more rational operation of vessels and economies of scale.
The number of ships declined every year during 1971–1987, even though
the tonnage increased during the first seven years of this period.31
The number of companies remained relatively steady during
1971–1973, before a downward trend and two “waves” of liquidation set
in; the first from 1977 to 1979 and the second from 1984 to 1987—and
the last one was particularly violent. Around 25 per cent of the compa-

31
nies that existed in 1985 had disappeared by 1986, and the rate was even
higher from 1986 to 1987. Again, the optimism caused by the freight
rate increase around the turn of the decade explains the temporary break
in the declining trend. The crisis itself reduced the number of shipping
companies with vessels flying the Norwegian flag from 176 to 56—or 64
if we add the ones that had invested in drilling rigs and large vessels for
the offshore oil industry.32 When companies that operated ships under
foreign flags are included, the number increases to 91, but even that
implies that the number of Norwegian shipping companies had been
almost halved.
We have previously suggested that there has always been a substantial
turnover in Norwegian shipping—that the industry’s longevity occurred
against a backdrop of frequently changing participants. The difference
between the crisis and other periods is, however, that the number of new
ventures was far too small to replace the companies that disappeared.
More than 150 new shipping companies were registered in these turbu-
lent years—so there was no dearth of newcomers—but more than 260
companies gave up during 1971–1987.33
It was shipping itself that killed off the Norwegian shipping compa-
nies. There was little or no tradition of diversification outside the ship-
ping sector. Such conglomerates were far more common in, for instance,
the UK. Some of the larger Norwegian owners had separate investments
in other industries, and quite a few had ventured capital into the off-
shore oil business, but in general the companies stuck to their main
activity—shipping. Of course, this was unfortunate when that market
was in trouble. However, in other countries, large conglomerates—with
shipping as one of their many activities—were no guarantee of success.
In fact, the activities in other sectors might have exacerbated the
difficulties.
32
The analysis of companies is based solely on those companies that have ships larger than 5000
gross register tons; see Tenold (2000, 258–267) for a presentation of the databases that are used.
Companies that owned smaller vessels, engaged in local trades or the offshore industry, have not
been included in the analysis.
33
These figures are likely to be somewhat inflated due to temporary exits, temporary establishments
by existing companies and companies established by creditors. Among the “shipowners” in the data
set are several banks.
218 S. Tenold
One example is the Court Line, a British shipping company with roots
at the beginning of the 20th century, which folded in 1974, at the very
start of the tanker crisis. Court Line operated six tankers on long-term
charters, which at least in principle should buy the company some time
after the freight rate declined. However, the main problem was its inter-
ests in aviation and charter holidays, which led to acute financial prob-
lems due to the oil price increase and the recession in the UK.34 The
Court Line case shows that “too much diversification from core activity
could result in problems.” In fact, the company went into liquidation
way before its more exposed Norwegian competitors, who “only” had to
deal with the shipping crisis.35
Specialization as a Survival Strategy

Most Norwegian shipping companies had few investments outside ship-
ping, and even within shipping there was limited diversification. Of the
largest 171 shipping companies in 1973, more than half had invested in
only one type of ship.36 Naturally, the degree of diversification was higher
for larger companies than for smaller ones—if you only have one ship, it
is difficult to have a diversified fleet.37
Diversification strategies enable shipping companies to spread risk, as
revenues from relatively well-functioning markets could neutralize, or
alleviate, the negative effects from the depressed ones. Among the mar-
kets that were less affected by the crisis, at least at the outset, were those
involving specialized ships such as car carriers, gas tankers, chemical
34
In fact, the company’s shipping business contributed positively to its accounts, and the Court
Line also sold two newbuilding contracts at a substantial profit before the market crashed; Court
Line Limited, Report of the directors & accounts for the year ended 20 September 1973, 7. See also
Craggs, Murphy and Vaughan (2018, 117–119).
35
Goss (2013, 247–248). See also Simons (1997).
36
Calculated on the basis of the database mentioned above. Around 15 per cent of the shipping
companies only owned crude oil tankers, and were thus particularly badly placed when the oil price
increased. In total, 53 per cent of the companies had invested in oil tankers—as previously men-
tioned this was down from more than 80 per cent in 1960; see Tenold and Aarbu (2011, 241).
37
There is one exception to this intuitive claim: companies that own combination carriers, ships
that can be used both in the tanker and dry bulk markets. In the analysis, companies with such
vessels are considered to follow a diversification strategy.
40
Norwegian share of segment (%)
35
Norwegian share of world fleet (%)
30
25
20
15
10
5
0
Oil tankers
Chemical
Container
General cargo
Dry bulk
Gas tanker
Combination
Vehicle carriers
tankers
(30+)
Fig. 7.5 Norwegian market shares, world fleet and major segments, 1973.
(Source: Lloyds, Statistical Tables 1973, Table 2 and Norway, Parliament, 1983,
103–108. Confer footnote)
tankers, cruise vessels and so on. Figure 7.5 compares the Norwegian
share of the world fleet with the share of some of the main segments.38
The low shares of containerships and general cargo carriers, as well as the
previously presented overrepresentation within the tanker market, are
clearly visible. However, it is evident that the Norwegians had an
extremely strong position in some of the niche segments.
When the tanker market collapsed, the companies that had invested in
specialized tonnage were much better equipped to deal with the new
paradigm. In the period 1977–1987, the survival rate among the
shipping companies that had invested in ships for specialized markets was
more than 75 per cent. Among those that had not invested in such ton-
nage, less than a quarter survived.39
The introduction of specialized vessel types had been one of the domi-
nant technological trends in the first post-war decades. When the crisis
38
Calculated by the author on the basis of Lloyds, Statistical Tables 1973, Table 2 and Norway,
Parliament, 1983, 103–108. Refers to tankers larger than 30,000 gross tons; for all other vessel
types, it refers to all ships larger than 100 tons.
39
Calculated on the basis of the companies’ fleets in 1977; see Tenold (2010, 75).
220 S. Tenold
hit shipping markets hard, specialization turned out to be a relatively safe

haven. Although the markets were thinner, there were profit opportuni-
ties and the number of competitors was relatively limited. Compared
with more mature markets, there were substantial barriers to entry—it
was more difficult to acquire the technology and gain market share. This
gave the shipowners with special vessels some breathing space. The cash-
flows were less volatile and typically more predictable, as the companies
had usually secured some activity through long-term contracts with their
main industrial customers. Moreover, specialized ships were often oper-
ated in pools, where revenues were distributed among participating ships
according to a fixed set of “pool keys,” another mechanism that evened
out fluctuations in shipping incomes.
The increasing importance of specialized shipping has two—quite
related—explanations. First, the role of the specialized ships, and the
shipping companies owning them, automatically increased as major
tanker and dry bulk owners folded and other ship types disappeared from
the fleet. By default, what remains increases in relative importance.
Second, it is evident that the specialized market segments were well-
suited to two of the main competitive parameters of Norwegian shipping
companies—competence about markets and customers, and access to
relatively cheap capital. Shipping companies that invested in these seg-
ments were thus able to expand in absolute, as well as relative, terms.
As there were economies of scale at the fleet level—sometimes a fleet
of 10 or more ships was necessary to provide an efficient service—the
specialized segments frequently saw various types of cooperative strate-
gies; partnerships, joint ownership, pools and so on. One common com-
bination was cooperation between innovative entrepreneurs and
established companies. Perhaps the best example of this is the open-hatch
bulk market, where ships with completely box-shaped holds, extra-wide
hatches and special cranes offered transport of tricky products such as
pulp, paper, wood products and so on. In the 1960s, two cash-strapped
entrepreneurs—Per Waaler and Kristian Gerhard Jebsen—established
the Star and Gearbulk pools together with far wealthier compatriots,
including some of the companies that were among Norway’s 20 largest
companies in the interwar period (Westfal-Larsen and AS J.L. Mowinckels
Rederi).
The specialized segments were characterized by innovative solutions.

One of Odfjell’s selling points in the chemical tanker market was the use
of stainless steel tanks, which increased the number of cargoes that could
be transported, including highly corrosive products such as sulphuric
acid. The ships that performed industrial shipping services were expen-
sive—in the late 1960s a 10,000 dwt chemical tanker was twice as expen-
sive per ton as a conventional tanker of the same size. Compared with a
200,000 dwt tanker, the chemical tanker was six times more expensive
per ton.40 The companies that invested in specialized shipping often had
a “value-chain” approach, where the aim was to provide a first-class, inte-
grated service to their main customers. As a result, both Odfjell and Stolt-
Nielsen invested in tank terminals that would improve their competitive
position—and make it difficult for new competitors to enter the market
for the transport of chemicals.
In several of the specialized segments, Norwegian shipping compa-
nies and yards came to play a decisive role in the early development of
the technology and the market. The first open-hatch bulk carrier—
Besseggen—was developed by US naval architects, but built by a
Norwegian yard, owned by a Norwegian shipowner, equipped with
purpose-built Norwegian cranes and chartered long-term to a US indus-
trial conglomerate. Within liquid natural gas, the technological devel-
opment was a process that took place “in an interplay among shipping
companies, research institutions, shipyards and subcontractors.”41
Table 7.3 presents some of the niches in which the Norwegians played
an important part in the technological development, and also managed
to gain substantial market shares.
As previously mentioned, specialized shipping was the viable alterna-
tive to bulkification for Norwegian companies. But the ability to invest
was not equally distributed; the specialized segments were expensive,
involved trial-and-error and initially entailed substantial risks. The ship-
ping companies that built up a presence had to have a strong position
vis-à-vis customers and shipbuilders. Again, the ones best suited were the
large shipping companies, or the entrepreneurs that managed to get a
40
Tenold (2010, 66).
41
Bakka (2017, 103).
222 S. Tenold
Table 7.3 Leading Norwegian niches and niche companies

Market Pioneers
Liquid petroleum Øivind Lorentzen, Sigval Bergesen, Einar Bakkevig, Gas
gas Traders Pool
Liquid natural gas Øivind Lorentzen, Leif Høegh, Gotaas-Larsen, Kværner
Chemical tankers Odfjell, Stolt-Nielsen, Panocean Anco [N&GB]
Cruise shipping Norwegian Cruise Line (Kloster)
Royal Caribbean Cruise Line (Skaugen, A Wilhelmsen,
Gotaas-Larsen)
Royal Viking Line (Bergenske, Nordenfjeldske, AF
Klaveness)
Open-hatch bulk Star (Waaler, Grieg, Westfal-Larsen)
Gearbulk (Kristian Gerhard Jebsen, Mowinckels, Dreyfus
[F&GB])
Vehicle carriers Jan-Erik Dyvi, Leif Høegh, Ugland, Jahre
financial contribution from the large shipping companies. If we take

company size in 1960 as the starting point, more than a quarter of the
companies in the top half of the distribution invested in specialized
tonnage in the period 1960–1977, compared with less than 10 per cent
in the lower half of the size distribution.42 The fact that specialized mar-
kets were relatively well-functioning thus increased the degree of concen-
tration in Norwegian shipping.
Specialization also brought about new regional differences. A century
earlier, Bergen had been ahead in the transformation from sail to steam,
but had been outgrown by shipowners in other parts of Norway—in
particular Oslo—after the First World War. The Bergen shipowners
regained their pioneering position as a result of specialization; by the
middle of the 1970s, they owned 13 per cent of the Norwegian fleet, but
more than 40 per cent of the specialized tonnage. The position was par-
ticularly strong within chemical shipping and open-hatch bulk
shipping.
A larger proportion of the Bergen shipping companies had invested in
specialized ships, and such ships on average made up a larger share of the
various companies fleets. The strong position can be explained by coop-
eration between the companies, vertical integration (into terminals and
42
Tenold (2010, 72). However, as we saw in the last chapter, smaller companies had an inroad into
the niche markets by means of minority investments in ships owned by the larger companies.
brokering) and technological innovation. The latter element illustrates

the local linkages; the leading international producer of pumps for chem-
ical tankers and one of the leading manufacturers of cranes for open-
hatch bulk carriers, were based in the city.43
The investment in specialized tonnage gave the Norwegian shipping
industry some breathing space during the crisis. In the specialized seg-
ments, there was still room for innovation—so investment did not dry
up. Moreover, the fact that the technology was quite advanced, meant
that shipping companies could justify paying more for the competence
that Norwegian seafarers brought to the table—or to bridge and deck. In
a period when the Norwegian shipping industry had serious financial
problems, the specialized shipping segments performed relatively well.
However, as the crisis dragged on into the 1980s, many of these segments
became plagued by overcapacity as well. After a century of success,
Norwegian shipping reached a low point during the shipping crisis—in
terms of profitability and in terms of public perception.
By the Death Bed

The Norwegian public’s image of shipping changed during the crisis, and
drastically so. In 1976, the national broadcaster could still fill half an
hour eight Friday evenings in a row by following the oil tanker Vanessa on
a voyage around the world. But the tone had changed compared with the
celebratory programmes that were aired in the 1950s and 1960s. The
backdrop was no longer our diligent and hard-working heroes at sea, who
brought much-needed dollars back to Norway. Now the difficulties had
come to the fore; the long hours, the isolation, the dangers, and the dif-
ficulties of combining a seafaring career with family life. The sailor’s song
was no longer an homage to distant ports, interspersed with some melan-
cholic memories of home. From the middle of the 1970s, the Norwegian
sailor was pining for the fjords. Would it not be better for him to return
to Norwegian waters? Would it not be more profitable to use his mari-
43
See Tenold (2009) for a more thorough analysis.
224 S. Tenold
time competence in the offshore oil industry, than in a loss-making busi-

ness far from home?44
Norwegians had eagerly embraced the country’s new-found role as a
petroleum producer, and the country’s wealth and welfare soon became
identified with the export of oil, not with shipping services. On the West
Coast, in particular in and around Stavanger and Haugesund, “sheikhs
and Arabs” were the new royalty.
The growing offshore oil production presented new opportunities for
seafarers, as it had done for shipping companies. Parallel with the declin-
ing employment of Norwegian seafarers in deep-sea shipping, there was
an increase in the number employed in the North Sea—on rigs and sup-
ply vessels. The transfer undoubtedly eased the employment effects of the
shipping crisis, and for seafarers there were evident advantages of working
closer to home.45
Shipping was rapidly eclipsed by the oil sector in the public’s impres-
sion of where Norwegian wealth came from. This idea was strengthened
by the notion that even in the period when shipping was important,
shipowners had been shirking their responsibilities. In the second half of
the 1970s, tax-evasion charges related to two of the leading shipping
personalities—Anders Jahre and Hilmar Reksten—had a negative effect
on the public’s attitude towards shipowners and shipping. Jahre and
Reksten had previously been portrayed as philanthropists and entrepre-
neurs, who had contributed to building the nation with their work ethic
and risky investments, before sharing the profits for the common good.
Jahre financed half of the town hall in his native Sandefjord, and donated
substantial amounts of money to research and humanitarian purposes.
Reksten ensured that the sailing vessel Statsraad Lehmkuhl, which was
used as a school ship, remained in Bergen, and gave large amounts of
money to cultural events and buildings, as well as several other causes.46
44
The choice of a masculine pronoun here is a result of reality, not misogyny. In the first half of the
1970s women made up less than 10 per cent of Norwegian seafarers in ocean transport. Among
foreigners on Norwegian ships, the female share was less than 5 per cent.
45
See the discussion in Tenold (2015a).
46
Given their important roles as entrepreneurs, businessmen and donors, as well as their spectacular
falls from grace, Jahre and Reksten have been the subject of a number of books, some emphasizing
their former successes, others their downfall. See for instance Jacobsen (1982) and Tjomsland
Their generosity was tainted by the fact that they had been quite tight-
fisted in connection with their tax payments.
After their deaths, when government investigations uncovered that
both Reksten and Jahre had amassed untaxed funds abroad, the two ship-
ping entrepreneurs were suddenly portrayed as free-riders rather than
philanthropists. In a social-democratic, egalitarian society such as
Norway, the idea that some of the wealthiest people were not contribut-
ing fully to the public good, was frowned upon. When these flames were
fanned by the left-wing ideologists that became increasingly vociferous in
the 1970s, the result was a decimation of the public image of shipping
and shipowners. During the shipping crisis, shipowners saw both their
affluence and their influence challenged.47
In the 1980s, controversial business decisions continued to put the
country’s shipping companies in a bad light. Dangerous voyages in the
Persian Gulf, where oil tankers were common targets in the Iran-Iraq war,
made the shipowners involved seem cynical and ruthless. Moreover,
“amoral” transport of cargo to and from South Africa made it easy for a
critical press to paint a picture of shipowners as profit-hungry and heart-
less.48 There is, however, another adjective that would have been more
appropriate: they were desperate. This desperation was evident through-
out the shipping industry. Only a relatively limited number of shipping
companies traded on ports in the Persian Gulf or South Africa, but the
problems were felt everywhere.
The crisis affected the industry so broadly that practically all shipping
companies were looking for a way out. Shipping had become “an indus-
try with high risks and low profits” and this put pressure on the limited
(2013) (for Jahre), Ilner (2006), Hjellum (1983), and Reksten (1979, 1983) (for Reksten), and
Gram (2017) (for both).
47
For an early and extremely good analysis of the industry’s image problem, see Svendsen (1976).
48
The transport of oil to South Africa was not illegal, but such voyages “were considered morally
and politically unacceptable”; Eriksen and Krokan (2000, 199). In 1985, Parliament suggested a
system of registration of all Norwegian-owned ships trading on South Africa, and a watered-down
version of this procedure was introduced. Although relatively few companies participated in the
transport—23 crude oil voyages to South Africa were registered in 1986–1987, but only six differ-
ent shipping companies were involved—the whole industry was tainted by the actions of the few.
Moreover, “the shipowners were a visible target and an ‘enemy’ [that was] easy to identify and
attack,” a fact that was used strategically by anti-apartheid activists; see Eriksen and Krokan (2000,
213–214).
226 S. Tenold
equity that remained.49 The downturn in the market had forced the
authorities to gradually increase access to register ships abroad, in order
to reduce costs. Some shipping companies reflagged their vessels and
replaced their Norwegian sailors with foreigners, but that was not the
dominant strategy. The most common response to the shipping crisis was
simply to give up.
By 1986 the outflow of tonnage from Norway had turned into a veri-
table flood. The liberalization of the flag regime had improved access to
registry abroad, but there was still substantial paperwork involved. In the
autumn of 1986 the bureaucrats had their hands and desks full. So many
shipping companies applied for licence to move their ships from the
Norwegian flag that the licensing system had “broken down” and there
was a “long backlog” of applications.50 Just before Christmas in 1986
Norges Bank, which had taken over the licensing procedures from an
overworked Ministry of Trade and Shipping, was processing 58 different
applications for flagging out, concerning a total of almost 90 vessels.51
The fleet flying the Norwegian flag declined by more than 5.7 million
dwt in 1986—the reduction was more or less the same as the total size of
the Norwegian merchant marine 50 years earlier. A symptomatic and
poignant incidence took place in February 1987. The red, white and blue
flag of the SS Norway—at one time the world’s largest cruise ship and the
pride of the Norwegian fleet—was swapped for the red, white, yellow,
black and blue of the Bahamas.52
Norwegian shipping was on its knees—its position was weaker than it
had been at any time over the past 100 years. A large portion of the fleet
had been sold abroad, despite the expensive GI, the governments’ attempt
to give emergency relief to struggling shipowners. International shipping
under the Norwegian flag was slowly and surely dying out, as companies
gave up or fled abroad. However, in the darkest hour, help came from the
most unlikely of quarters.
49
Aftenposten. 030586, 5.
50
Tenold (2015a, 162).
51
Jørgensen (1988, 210).
52
The Bahamian merchant marine ensign has red fields with a white cross, like a symmetric version
of the Danish flag, but the flag of the Bahamas in the upper left quadrant.
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right holder.
8
Rebound: The Return of Norwegian
Shipping
How do you accept the disappearance of an industry that for more than
a century has been the most important source of foreign exchange, neu-
tralizing the balance of trade deficit and enabling crucial imports? You
don’t. You take up the fight, look for solutions and try to adapt. And you
accept that help may come from the most surprising quarters.
The old man was something of a legend in both Norwegian and inter-
national shipping. Born in Bergen at the start of the century, he left his
native country at an early age to work and study in London in the inter-
war period. During the Second World War, Erling Dekke Næss had
worked for Nortraship. In the first post-war decades, from a base in the
United States, he built up one of the leading international shipping
empires, operating his own and chartered vessels. As leader of the
American Committee for Flags of Necessity, he was one of the most vocal
supporters of Flags of Convenience, the low-cost institutional arrange-
ment that primarily American and Greek shipowners used.1
Although he was based abroad, Dekke Næss had been a frequent visi-
tor to his home town, and he had donated large sums of money to an
1
The autobiographies Næss (1977) (in English) and Næss (1981) (in Norwegian) are among the
best insider accounts of modern shipping; confer also Chap. 4.

232 S. Tenold
Institute for Shipping Research and to a first-class museum in Bergen,

telling the history of the city’s medieval roots.2 Now he had come back to
his native country to offer his solution to the extreme crisis that haunted
Norwegian shipping. The forum was a meeting of shipowners in Oslo—
the date was 11 January 1984.
The fundamental premise for the plan that Erling Dekke Næss pre-
sented, was a feature that had been characteristic of Norwegian shipping
for more than a century: the fact that the ships served the world market,
not Norwegian exporters and importers. This implied that the majority
of the Norwegian-owned tonnage never visited ports in the home coun-
try. Consequently, given that Norwegian shipping was an international
industry, its scope should be international.
The basis for Norway’s competitiveness had changed during the 20th
century. A starting position based on low-cost shipping, with old ships
and superior seamanship, was replaced by a combination of economies of
scale, automated ship operation and innovative specialized tonnage.
Technology gave the Norwegians a competitive edge, and neutralized
what had now become a labour cost disadvantage. When the shipping
crisis struck, and the market became characterized by massive overcapac-
ity, there was little reason to invest in new tonnage. When it was no
longer possible to invest in labour-saving technologies, the Norwegian
companies’ ability to create competitive advantages was reduced. The
country still had a well-functioning maritime infrastructure, high com-
petence onshore and offshore, an affinity for the sea and long maritime
traditions. However, in a cut-throat competitive situation, this was insuf-
ficient to remain afloat.
The Low Point

In the period from 1970 to 1987 the number of shipping companies
operating in the international market fell by more than two-thirds and
the newly established businesses were too few and far between to alleviate
2
The author of this book was for a number of years affiliated with the shipping research institute
that had been established by Næss’ donation.
Rebound: The Return of Norwegian Shipping 233
Table 8.1 The development of important OECD fleets, 1973–1987

Decline
Fleet 1973 Fleet 1980 Fleet 1987 1973–1987
(million dwt) (million dwt) (million dwt) (per cent)
Denmark 6.51 8.70 6.96 6.9
The Netherlands 7.26 9.00 5.12 −29.5
Sweden 8.8 13.52 2.40 −72.7
Germany 12.15 13.33 5.66 −53.4
Italy 13.19 17.95 12.18 −7.6
France 13.29 20.86 8.41 −36.7
Greece 31.44 67.05 42.78 36.1
Norway 40.09 38.89 9.66 −75.9
The UK 47.16 43.18 11.68 −75.2
Japan 58.59 67.32 54.67 −6.7
Ten country 238.48 299.80 159.52 −33.11
total
Sources: OECD, Maritime Transport, various issues. Confer footnote
the losses to any great extent. From 1970 to 1987 there were only three
years when the number of companies increased. On average 15 compa-
nies disappeared every year, while only nine new companies were estab-
lished. There was also a marked acceleration towards the end of the
period; in both 1985 and 1986 more than 30 companies sold or trans-
ferred their last ships under the Norwegian flag.
Table 8.1 illustrates the massive decline in the fleets of the most impor-
tant Organization for Economic Cooperation and Development (OECD)
nations, and also shows that Norway was harder hit by the crisis than
other European countries.3 Only Denmark and Greece saw their fleets
increase from 1973 to 1987, but even these “relative winners” experi-
enced tonnage flight in the first part of the 1980s.
The UK continued the relative decline that had characterized the
country for most of the 20th century and saw the largest tonnage loss in
absolute terms. In fact, the amount of shipping tonnage that disappeared
from the British flag in the period 1980–1987 was larger than the whole
UK tonnage in 1900, when the UK controlled around half of the world
fleet. This says something about how much the world fleet had increased
in those eight decades, but also indicates the extent of the flight from the
Based on various issues of OECD, Maritime Transport; confer Tenold (2000, 156–158).
3
234 S. Tenold
flag. In relative terms, the Norwegian experience was even more dramatic,
but only barely so—in both the UK and in Norway the merchant marine
fell by more than three-quarters. The decline also started earlier—in con-
trast to other countries, the UK and Norway had less tonnage in 1980
than in 1973.
In May 1987, less than 100 ships larger than 15,000 dwt remained,
and half of these were already in the process of being transferred to Flags
of Convenience—only bureaucratic slowness kept them on the Norwegian
register. As a point of comparison, in 1973 there were more than 600
such vessels in the fleet, and Norwegian owners also had more than 200
such ships on order.4 From more than 800 to less than 100 is a massive
reduction, and the press reported that the Norwegian merchant marine
had gone “from being a giant to being a dwarf.”5
Norwegian shipping was on its death bed and awaiting the last rites.
But, instead of the four horsemen of the apocalypse, the combination of
a clever political manoeuvre and a rapidly improving market appeared on
the horizon.
he Kiss of Life: The Norwegian International

T
Ship Register
The idea of an international register, which Erling Dekke Næss in 1984
presented as the solution to the problems, was first received with little
enthusiasm. Large-scale sales to foreign owners and the illusion of “tem-
porary” flagging out to low-cost registries clearly showed that shipping
companies could no longer be competitive when flying the Norwegian
flag. However, this new reality was difficult to accept. Most shipping
industry associations, the authorities and, in particular, the seafarers’
unions, were negative about the idea of a “second” or “open” register
where foreign labour could be used. Even the Norwegian Shipowners’
Association was lukewarm. Its main concern was access to register ships
4
Estimated on the basis of the Veritas-database, see Tenold (2001) for a presentation, and the list
of Norwegian newbuilding contracts in Norwegian Shipping News, 2A, 1974, 41–63.
5
NTB, 200587.
abroad, and it probably feared that an inferior Norwegian solution might

lead to the reintroduction of restrictions on the use of foreign flags.
Nobody took responsibility for the Norwegian predicament. The sea-
farers and the government blamed the shipowners, who had been greedy
and had taken on too much risk. The shipowners blamed the government
for its tax and labour policies, and the trade unions for their wage
demands and expensive social requirements. At first, everybody blamed
the markets. Then, everybody blamed foreign competitors. Still, with the
massive outflow of tonnage in 1985 and 1986, it was evident that the old
template was no longer sustainable. World shipping had gone through
massive changes, both in technological and organizational terms. Norway
had only participated in the first of these transformations.
In 1967, when the Norwegian Shipowners’ Association’s Managing
Director, David Vikøren, presented Norwegian maritime policy at an
international conference, he emphasized the fact that Norwegian ship-
ping had “maximum freedom to combine the factors of production as
efficiently as possible, regardless of national considerations.”6 The term
“maximum freedom” is revealing. At the time, the “factors of produc-
tion” appeared to be mainly the ship itself, and the important elements
in this respect were access to ships, finance, insurance and markets
abroad. The restrictions on the nationality of the seafarers were not taken
into account. The ban on the use of Flags of Convenience was not even
mentioned.
This perception of reality was gradually challenged—by the shipping
crisis, by strong relative growth in Norwegian labour costs, and by the
changes in the organization of world shipping, including the increasing
use of Flags of Convenience. From 1980 to 1987 more than 15,000 jobs
for Norwegian seafarers disappeared as a result of sales and flagging out;
“the 1980s turned into a painful blood-letting that threatened to wipe
out the Norwegian seafarers.”7 The old ideas of what “Norwegian ship-
ping” should and could be had to be reformulated. Gradually, the ship-
ping organizations, the authorities and the seamen’s associations were
forced to acknowledge the need for change.
Vikøren (1967, 8).

6
Bakka (1999, 8).

7
236 S. Tenold
In 1981 a Parliamentary committee on shipping unanimously sup-

ported the idea that Norwegian shipping should be based on Norwegian
ships, displaying the Norwegian flag and employing Norwegian seafar-
ers.8 Gradually the crisis forced a relaxation of the requirements. The ban,
with minor exceptions, turned into temporary permissions. The tempo-
rary permissions turned into permanent access, with minor exceptions.
Free access to register ships abroad had been one of the main strategies
of the Norwegian Shipowners’ Association. There was initially a reluc-
tance to accept the ideas about the Norwegian International Ship Register
(NIS). However, as the crisis became broader and more intense, a work-
ing party, established in late 1985 and led by Egil Abrahamsen from the
classification society Det Norske Veritas, reformulated the goals and the
policy. At this point, shipping policy became maritime policy. By consid-
ering the fate of the whole maritime community—not only the shipping
companies, but auxiliary service industries, shipbuilders and so on—the
effects became more visible and weightier. Political clout improved.
Norges Rederforbund [the Norwegian Shipowners’ Association] had
good political connections, in particular in Høyre [the Conservative
Party]. The Prime Minister, Kåre Willoch, had worked for the association
in the 1950s, and he still received a salary from Norges Rederforbund when
he was a Member of Parliament.9 The association was known as one of
Norway’s most efficient lobbying organizations, and now it was fighting
for its life. When the shipowners changed their minds, the politicians
followed suit. In April 1986 the Conservative government referred to the
current problems in shipping when it announced its aim to establish an
international register. However, a change of government led to a post-
ponement, as the new Labour government wanted to confer more closely
with the unions.
That consultation took around a year, and led to a deterioration in the
relationship between the Labour Party and the main trade union, and in
particular among the various trade unions representing seafarers. The Act
8
See Tenold (2001, 117–123) for a detailed presentation of the political process leading up to the
establishment of the NIS.
9
Verdens Gang, 150282, 12; formally, another lobby organization paid Willoch, but half of this
salary was reimbursed from the shipowners; see Espeli (1999, 46). He did not receive such a salary
during the period in question, when he was Prime Minister.
establishing the NIS had a long and cumbersome journey through the
Norwegian political system. The Socialist Left Party (and two dissenting
Labour Party members) voted against the establishment, while the
Progress Party wanted fewer restrictions, and suggested that NIS vessels
should be exempt from Norway’s economic boycott of Namibia and
South Africa.10
The seamen’s organizations were extremely negative to what they
referred to as “wage-based apartheid” on Norwegian ships—for a long
time they were against any system in which Norwegian and foreigners
would receive different wages.11 They denounced the “racism, slavery
conditions, starvation wages and lawlessness” that the NIS would intro-
duce.12 This was a two-faced stance, however: internationalization had
already reached the seamen’s organizations. Norsk Sjømannsforbund had
since 1983 operated a hiring office in Manila, where sailors—if they paid
fees to the Norwegian union—could be employed on Norwegian vessels
without triggering the boycott threat. This was a pragmatic approach
with long traditions—in the 1950s Norwegian seafarers were urged not
to sign on Panama-registered vessels, unless they were given a contract in
which the seamen’s organizations in the United States had accepted the
salary and the working conditions.
At a conference in Oslo in 1948, the International Transport
Workers’ Federation decided to introduce a boycott of Flags of
Convenience and throughout the post-war period the Norwegian sea-
farers’ organizations had a more hard-line approach to such registers
than similar unions in other countries. The Greek shipping organiza-
tion in London went so far as to claim that the motivation for the
Norwegian fight against Flags of Convenience was to stop the expan-
sion of Greek-owned shipping.13 Gradually, the stigma associated with
such flags disappeared. By the middle of the 1980s the Norwegians had
not only embraced Flags of Convenience—they had come up with an
alternative arrangement.
10
Norway, Parliament (1986–87) Stortingsforhandlinger 3. juni 1987, 79.
11
Peter Myklebust, Norsk Sjømannsforbund, NTB 240186. See also Bakka (1999).
12
Aftenposten, 070487, 46.
13
Jenssen (1999, 204–213).
238 S. Tenold
The political process was long and winding, but the bureaucratic
response was surprisingly swift. During the consultation, the shipowners’
association had suggested that the register should be opened in January
1988. The Shipping Directorate, however, promised that the moment
the politicians had made the decision, it would act rapidly. Moreover,
parallel with the preparations for the new register, the legal regime would
go through significant simplification and rationalization.
The aim was to establish a competitive Norwegian alternative to Flags
of Convenience. Consequently, the red tape had to be limited and much
of the control function was delegated to the leading international classi-
fication societies.14 The new registries, NIS for international vessels and
NOR (Norwegian Ordinary Register) for ships operating in Norwegian
waters, were organized under the auspices of the town clerk [Byskriver] in
Bergen. As a result of the impressive bureaucratic swiftness, they opened
for business on 1 July 1987. Outside the offices, huge crowds were pro-
testing. Inside the offices, the revitalization of Norwegian shipping had
begun.
When NIS was formally opened in the summer of 1987, the
Norwegian-registered fleet consisted of slightly less than 500 ships, total-
ling 8.9 million dead weight tons (dwt), with a similar number owned
from Norway but registered abroad. Because there had been a tendency
to flag out relatively large ships, the fleet under foreign flags amounted to
almost 16 million dwt.15 After NIS was established there was an influx of
ships from the conventional registry, but this reregistration was more or
less over by the end of 1988.
One condition for NIS-registry was that the owner had a collective
agreement with a Norwegian or foreign union. In the early 1990s four
such agreements existed; for Nordic seafarers, for Filipinos and Indians,
for Polish seafarers and for Pakistani and Indonesian seafarers.16 As such,
the Register can be seen as a vehicle of international solidarity, and this
was one of the reasons that a Labour government was willing to introduce
such an arrangement. The NIS enabled employment for seafarers from
14
See Vigtel (1988, 87–90) and Bakka (2017, 180–181).
15
Norway, Parliament (1988–89) Stortingsmelding nr. 39 (1988–89), 7.
16
Jenssen (1999, 216).
poor countries, but on acceptable terms. For a country that prided itself
on its “foreign aid,” this was another means of north-south transfer.
However, the establishment of the NIS did not imply that foreigners for
the first time were employed on Norwegian ships—it just meant that for
new groups of foreigners, certain minimum conditions were met.
Before NIS, there were legal restrictions on the extent to which it was
possible to use foreign labour.17 The most numerous and most well-
known group consisted of other European seafarers; in the 1950s particu-
larly from Denmark and Sweden, and in the 1960s and 1970s increasingly
from Southern Europe. In the early 1950s around a quarter of the for-
eigners on Norwegian ships came from Denmark. Ten years later around
a third of the foreign seafarers came from Spain, while the proportion of
Danes had fallen to less than 10 per cent. There were several reasons that
Norway had to “import” foreign seafarers; the strong growth of the fleet,
labour-demanding reconstruction, expansion within education and man-
ufacturing employment onshore, as well as the relatively small cohorts
from the 1930s coming of age.
The Europeans had functioned as “swing capacity”—ensuring that
there were sufficient seamen during the tight labour market in the 1950s
and 1960s, but disappearing when the market became difficult in the
1970s and 1980s.18 The foreign seafarers were particularly hard hit by
vessel sales and rationalization. Given that they were given the same terms
as Norwegians, there were no financial incentives behind the employ-
ment. The practice had two main reasons. First, it was part of the “inter-
national” market for seamen—which had its counterpart in Norwegian
seafarers working for ships registered in other countries. Second, it
reflected the difficulties of recruitment in a Norwegian economy where
attractive employment alternatives were no longer scarce.
The second group of foreign seafarers on Norwegian ships was not
employed on Norwegian terms, and there were both practical and cost
reasons for its recruitment. Ships trading in East and Southeast Asia had
been allowed to take on local crews, who were signed on en bloc from local
17
See Halvorsen (2010) for a concise analysis of foreigners working on Norwegian ships in the
period 1950–1975.
18
See the analysis in Tenold (2015b).
240 S. Tenold
crewing agencies. This practice went back to the start of the century, and
a waiver from the normal nationality and tariff requirements was given to
ships where the officers were Norwegian.19 This scheme, where all or prac-
tically all of the crew were Asian, had included as many as 150 ships in the
middle of the 1960s. Many of these vessels were typically older and labour
intensive, and had lost out in the competition in the world market as a
result of rapid technological development. However, there were also ship-
ping companies that had specialized in the requirements of this trade. The
“Asian-clause” vessels were gradually phased out. At the end of the 1960s,
it was estimated that around 100 ships operated under such terms, but the
number declined rapidly in the 1970s. By the middle of the 1970s the
number had been halved, and by the early 1980s only 15 such ships were
left. Some were flagged out, with continued Norwegian ownership inter-
ests, while some of the trade was taken over by local companies—at times
helped by increasingly nationalistic policies.20
The least-documented use of foreign labour on Norwegian ships was
found in African waters, where there was a long-standing tradition of tak-
ing on a supplemental “crew” in the shape of “krooboys”—local labour
that performed non-nautical tasks such as hull cleaning, washing, paint-
ing, rust picking, general maintenance and so on. “Krooboys” are first
mentioned in Norwegian newspapers as early as in 1880.21 The name has
nothing to do with the word “crew,” although it is similar to its phonetic
spelling—the term was originally used for people from the coast of Kroo
or Kru around Cape Palmas in Liberia, Western Africa, who were “jour-
neymen […] found on board of every vessel [along the African coast].”
However, in the Norwegian context “krooboys” became a generic term
for all kinds of African casual labour.22
19
Molaug (1977, 89–95).
20
Norway, Parliament (1975–76) Stortingsmelding 23, 29 and Norway, Parliament (1986–87) Ot.
prp. 45, 7.
21
Hedemarkens Amtstidende, 08.12.1880, 2.
22
Bacon (1842, 205). Kroomen were known as the strongest and best workers along the coast; see
Phillips (1889, 463). For Norwegian ships, Madagascar became an important source of temporary
casual labour on the other side of the continent. In the 19th century Royal Navy, it was not uncom-
mon to employ Seedies recruited in the Indian Ocean (for instance the Seychelles or Zanzibar) and
Kroomen recruited on the West Coast. For an overview of the problem of defining the group, see
Tonkin (1974).
By the 1970s the system was still in existence on some ships trading
along the African coast—locals, usually led by an overseer or headman,
lived on the deck and worked very long hours at extremely low wages.23
However, free food and the ability to profit from cast-offs from the ship
and petty trading and barter along the coast, made the work sought after.
The Africans had few alternative means of income, and the inhabitants of
the “Kroo-town” in some African cities had a higher standard of living
than the population in general.24 As Norwegian shipping changed, and
the liner trade with frequent stops along the African coast was aban-
doned, the krooboys disappeared as well.
Before the shipping crisis, the idea that Norwegian ships should be
mainly or completely manned by foreigners was alien even to the ship-
owners’ organizations. However, by the middle of the 1980s, it was the
only workable political reality. This change shows how much Norwegian
shipping—and Norway—had developed in the 20th century. A book
from the interwar period suggested that “as long as the sea flows outside
the door of thousands of homes, as long as it lights the desire to explore
and nourishes good seamanship, it is hardly likely that our most tradi-
tional industry will stagnate due to lack of suitable labour.”25 By the late
1980s the sea still flowed, but suitable—in terms of suitably inexpen-
sive—labour had to be obtained elsewhere.
The Timing of Their Life

The introduction of the Norwegian International Ship Register made it
possible for Norwegian shipping companies to compete on equal terms
with the most cost-efficient foreign competitors. The recipe was rapidly
copied by other countries, but NIS was initially far more successful than
similar measures elsewhere.26 A comparison of second registers from the
23
Arbeiderbladet, 020872, 4 and Kvam (1971, 45–49).
24
See the fascinating recollection of a trip with Krooboys on a Norwegian liner in the 1960s in
Bjørklund and Kolltveit (1989, 281–284).
25
Egeland (1930, 4).
26
In 1984 the Isle of Man became a second register for the UK, and the Dutch introduced the
Netherlands Antilles, with an office in Curacao, in 1987. Both of these were “offshore” registers,
242 S. Tenold
early 1990s shows that while NIS consisted of some 40 million dwt, the
closest challengers—Germany and Denmark—each amounted to around
7 million dwt.27
What can explain this rollercoaster development of the Norwegian
fleet, from more than 48 million dwt in the beginning of 1977 to only
around 10 million a decade later, before shooting back to almost 38 mil-
lion dwt in 1991?28 The basis for the reduction is hopefully clear by now—
the combination of a collapsing market and unfortunate strategies. What
about the rebound? The 57 million tons of shipping registered in Norway
and elsewhere was an all-time high for the Norwegian-owned fleet, though
the share of the world fleet—which was now slightly less than 9 per cent—
had been larger in the late 1960s. There are three main reasons for the
rapid ascent after the 1987 nadir; one general, and two specific to Norway.
One reason for the strong growth was market developments. The
tanker market slowly improved from 1985 onwards, as demand picked
up and superfluous tonnage was scrapped. The cycle in the bulk market
changed relatively abruptly in 1987, with rates and values of some vessel
classes more than doubling during the year. The fact that ship prices were
extremely low—and that the vessels in many instances were owned by
banks or other creditors without a long-term, operational scope—implied
that it was relatively easy to enter the market. The market improvement
was a tide that lifted all boats. Consequently, we have to look elsewhere
to explain why Norway’s international market share more than trebled
from 1987 to 1990.29
The first specifically Norwegian reason was that many of the ships that
had been flagged out—while ownership or control remained in Norway—
and were followed by Kerguelen, a “French Antarctic” registry in 1989. NIS was the first “domes-
tic” open register, followed by Denmark and Germany in 1989 and Italy in 1998; see Carlisle
(2009, 322) and Sornn-Friese and Iversen (2014).
27
Sletmo and Holste (1993, 249–250).
28
Data on the Norwegian fleet in December 1991 from UNCTAD, Maritime Transport 1991, 11.
In addition to the almost 38 million carrying the Norwegian flag, UNCTAD estimates that there
was a fleet of almost 19 million dwt flying foreign flags—in total, a fleet of 56,772,906 dwt.
Fearnley & Eger, Review 1991, 48, refers to a Norwegian fleet of 41 million dwt.
29
The idea that all countries and companies are equally affected by a market improvement is a
simplification: given the different development of the various shipping segments, not all boats are
lifted equally.
returned to the Norwegian flag. Although the register, as a public body,

had a limited ability to market itself, the Bergen Shipowners’ Association
actively promoted the new possibilities. Foreign owners, if they had
Norwegian representatives, could register ships in NIS, but the number
of foreign-owned vessels entered into the register was very low. By the
beginning of 1989 only around 30 foreign-owned ships were included,
and by 1992 the foreign-owned share was less than 7 per cent of the total,
so this played no important role in the growth. Vastly more important
was the fact that Norwegian shipowners saw the register as attractive,
both with regard to price and procedures. Moreover, the fact that it had
been possible to arrive at a political solution—and one that ensured com-
petitiveness while maintaining the link to Norway—created a sense of
optimism.
This brings us to the final reason for the rebound: an impressive ability
to mobilize capital and identify opportunities.
The crisis had taken its toll on the equity of Norwegian shipping com-
panies, on the loan portfolios of the shipping banks and on the recruit-
ment of personnel to ships and shipping company offices. The crisis had
proved that shipping was a high-risk business. However, high risk also
means high potential profits. The dream of these profits encouraged a
massive wave of Norwegian investment. Norwegian investors were willing
to take the risk—and they were eagerly encouraged by the authorities.
In fact, the latter element—the awakening of dormant Norwegian
capital—was the most important factor behind the growth. Estimates
from the beginning of the 1990s suggest that ships that had “returned
home” made up around 20 per cent of the NIS fleet, while ships that had
been bought second-hand abroad amounted to 60 per cent of the ton-
nage. In the period 1987–1991 more than 900 vessels were bought by
Norwegian owners, and the majority would be registered in NIS.30
With the establishment of NIS, and the changing cost structure, com-
pletely new models of operation and ownership became possible. This led
to increased diversification in the Norwegian fleet. Before it was possible
to use low-cost foreign seafarers, only the most modern, advanced and
specialized ships could afford to fly the Norwegian flag. Now it became
30
Bakka (2017, 186–188).
244 S. Tenold
possible to compete on completely equal terms with foreigners, and there

was no need to stick with “typically Norwegian” strategies. Consequently,
relatively simple, older, second-hand tonnage was bought from abroad,
leading to a high degree of diversification in the Norwegian fleet. By the
early 1990s there were even suggestions that some of the ships that had
been included in NIS were “substandard” and that the reputation of the
register was at stake.31
Old and New Hands on Deck

The maritime historian Dag Bakka jr., who has written a very good
account of the revitalization of the shipping industry after the introduc-
tion of the NIS, points out that three different types of “shipowners” put
their mark on Norwegian shipping in the last part of the 20th century.32
The expansion was orchestrated by “the next generation,”, which took
over existing companies, a group of enterprising newcomers, as well as
those that had survived the crisis; the old-timers.
The first group was a new generation of owners and managers, who
took the helm in a number of traditional shipping companies—Bergesen,
Kloster, Smedvig and Staubo. The extent to which their inheritance had
any real value varied—in many cases the shipping crisis had depleted the
value of the companies. However, they had a shipping pedigree, and
access to national and international networks. Some of the companies
had sailed relatively smoothly through the crisis, others started practically
from scratch, with little more than a shipping “name” and a shipping
reputation.
The second group consisted of experienced owners in established com-
panies—Westfal-Larsen, Fred. Olsen, Leif Höegh and so on. Many of the
older shipping companies had a more risk-adverse strategy than the fast-
est growers in the 1960s and 1970s—their growth was slower, but that
also implied that their financial basis was sounder. As we have seen, they
were on average more diversified, and had a larger portfolio of specialized
Lloyd’s List, 010492, 11.

31
Bakka (2017, 186–187).

32
ships, than the smaller companies. Some of the established companies

collapsed during the crisis, while others were busy restructuring their bal-
ance sheets and biding their time until there were new profitable oppor-
tunities. In the most fertile instances, the established companies had been
divided among different branches of the family, paving the way for expan-
sion along parallel lines, both old and new.
In Bergen we find two very good examples of how competition between
companies with a joint tradition could give strong growth. Kristian
Gerhard Jebsen started his own business in the late 1960s, after leaving
the family company, which was taken over by his younger brother, Atle
Jebsen. The two brothers were among the most expansive shipowners in
the 1980s and 1990s, investing heavily in the specialized bulk markets.
Although they both had financial challenges, their companies were
among the largest in Norway in the early 1990s.33 Similarly, when the
second cousins, Dan Odfjell and Abraham Odfjell, divided the leading
chemical tanker owner, Odfjell, in the 1970s, they both managed to
build up companies that were in the Top Four of the chemical tanker
market. This kind of growth—by spin-offs from established enterprises—
was not confined to Bergen. Various members of the Ugland family based
in and around Grimstad on the South Coast, also made their mark, with
investments in car carriers, shuttle tankers, bulk carriers and product
tankers.
The final group consisted of a number of entrepreneurs, with various
backgrounds, who used their skills and networks to create new business.
Some came from shipping companies, others from shipbroking or
finance. Among these we find John Fredriksen, who from a base in
London would go on to become by far the biggest and most successful
Norwegian shipowner in the first part of the new millennium. Another
newcomer was Herbjørn Hansson, who had worked for Anders Jahre in
the Kosmos-system. He built up a substantial tanker fleet by means of a
company incorporated in Bermuda, but with operations in Norway. The
strategy has been to raise funds from investors on the New York Stock
Exchange, where a large number of shareholders saw shipping as an exotic
industry and were seduced by the frequent payment of dividends.
33
See Tenold (2015a) and Harvey (2005).
246 S. Tenold
Hansson’s business model was quite unique in a Norwegian setting, but

in an international perspective, a handful of Greek shipping companies
followed the same strategy.
Sometimes the newcomers built their business on the ruins of older
companies. Jens Ulltveit Moe had been appointed by the main creditor,
Bergen Bank, to take over the management of the troubled Knutsen OAS
in Haugesund, which had made unfortunate investments in large tank-
ers.34 Together with Trygve Seglem, he built up a fleet of advanced
Suezmax shuttle tankers. The phoenix-like Knutsen organization was pri-
marily engaged in the operation and management of the ships—the
investments funds very often originated from investors in limited part-
nerships [kommandittselskap] that had actual ownership of the vessels.
The kommandittselskap became the “typical” form of incorporation for
many of the companies that expanded rapidly in the period around 1990.
The financial basis for this type of incorporation was the combination of
limited liability with substantial tax deductions for the individual own-
ers. For many investors, the tax advantages were the main motivation for
the investments—in the worst cases, projects that had negative expected
profits turned out to give a positive return when the tax effect was con-
sidered. A number of the projects also had an evident speculative charac-
ter, where the main aim was “asset play”—a desire to reap the benefits of
increasing vessel values—rather than revenue from long-term operation.
The limited partnerships were not only linked to deep-sea shipping—
they became a favoured means of finance for offshore involvement as
well. There had been a steady stream of shipping companies seeking out
opportunities in connection with the expansion of the Norwegian off-
shore sector. First, during the period of high liquidity at the beginning of
the 1970s. Second, as a means of diversification when the shipping mar-
ket wobbled. Finally, as a viable business in its own right, for companies
that had managed to build up knowledge about another maritime
venture.
See Hammerborg (2003, 386–395). Evidently not a big fan of mono-causal explanations,
34
Hammerborg (2003, 386) explains Knutsen’s success by the following factors: “luck, coincidence,
personal competence, skill, the restructuring of the company, the creditors’ patience, technological
development, the oil activity in the North Sea and the access to venture capital through the
kommandittselskap-scheme.”
Returning Home in Search of Black Gold

The 1970s and 1980s were extremely dramatic, and the haemorrhaging
of shipping companies during the crisis was unprecedented. The intro-
duction of the Norwegian International Ship Register, which saved
Norwegian shipping but sacrificed Norwegian seafarers, was a timely
intervention by the authorities. Still, the new regime could not prevent
the shipping industry from losing its previous hegemonic position in the
economy in general, and in exports in particular. Net freight earnings—
the profits that the shipping companies “brought back home” from
abroad—had fallen from more than 23 per cent of total exports in the
beginning of the 1970s, to less than 4 per cent by 1987.35
The reduced importance of shipping in the Norwegian economy was
not only caused by the difficult conditions in the shipping market and
the reduction of the Norwegian fleet. The transformation of “Norway—
the shipping nation” to “Norway—the oil producer” also played a very
important part.36 The export of crude petroleum and natural gas, which
was non-existent in 1970, made up more than a third of Norwegian
exports in the first half of the 1980s. During this turbulent period, growth
in offshore petroleum exploration and exploitation became another out-
let for maritime capital and maritime competence.
The relationship between Norwegian deep-sea shipping and offshore
oil production is complex. The activity in the North Sea clearly diverted
resources away from the shipping industry—both capital and labour
found an attractive alternative. At the same time, with international
shipping markets developing the way they did, some kind of constraint
on the Norwegian exposure was clearly a good thing. Consequently,
while the offshore sector temporarily reduced Norway’s involvement in
35
Calculated on the basis of Statistics Norway (1994, 532–533 and 544–545). Although the figures
never returned to those of the Golden Age—even when we leave out petroleum exports—1987 was
a low point.
36
Gross freight earnings made up 37 per cent and net freight earnings 23.3 per cent of total exports
in 1970. By 1987 the shares had fallen to 13.8 per cent for gross freight earnings and 3.4 per cent
for net freight earnings. This was partly a result of Norway’s emergence as a major oil exporter but
even if we exclude the effects of the petroleum exports, there is a substantial decline, to 18.9 and
4.6 per cent, respectively. Due to a smaller fleet and a lower freight rate level, the revenue from
shipping declined in absolute terms as well.
248 S. Tenold
international shipping, the long-term effects were positive, for at least

three reasons.
First, a number of shipping companies found another investment
object that clearly provided a higher return on capital than the crisis-
ridden shipping market. For some it provided revenue in difficult times,
for others a completely new business model. Second, activity in the North
Sea provided the maritime sector with a new base from which it became
possible to build up competence and expand on the international stage.
Third, for Norwegian seafarers—who were replaced by low-cost foreign-
ers on the ships in the Norwegian deep-sea fleet—activity in the North
Sea provided not only alternative employment, but jobs that were better
paid and had more attractive conditions than what they could find work-
ing in conventional deep-sea shipping.
Geological surveys off the Norwegian coast began in the early 1960s,
and the first well was drilled by Esso in the summer of 1966. The ship-
ping companies became involved in a number of projects and activities
related to the new industry; investment in oil companies, in onshore
bases, in supply ships and, as a swarm of bees in the first half of the
1970s, in oil rigs.
One reason for the shipping companies’ involvement was of course the
fact that they represented one of the wealthiest industries in Norway.
Although “shipping money” typically was reinvested in new transport
capacity, shipping companies and shipowners were among the most
important capitalists in the country, and a natural starting point for any-
one looking for investment funds. Another reason for the inflow of ship-
ping money into the offshore oil sector was the maritime linkages. The
offshore oil sector was not the kind of activity that the shipping c ompanies
were used to, but it was not far from it. Shipping companies already had
substantial competence and relations within areas such as vessel construc-
tion and supervision, classification, financing, insurance, manning and
son on. This put them in a particularly advantageous position when the
offshore petroleum industry was developed.
One example of this bridge between the old and the new maritime
interests was the old whale factory ship, Thorshøvdi, which was rebuilt by
the Aker Group. A 50-metre drilling tower was added to the almost
20-year-old ship. Renamed Drillship, the former Thor Dahl vessel was
delivered to British interests in the autumn of 1967. Earlier that year, the
first Norwegian-built drilling rig, Ocean Viking, had been delivered to the
US company Ocean Drilling & Exploration Company (Odeco). The rig
was responsible for the first major oil find in Norway—what would
become the extremely profitable Ekofisk field.
The day before Christmas Eve in 1969, Phillips Petroleum announced
that the company had discovered Ekofisk and the economic fate of
Norway was changed forever.37 However, even before this, shipping inter-
ests had entered the offshore sector on a large scale. When Phillips started
its activities in 1966, its operations were based at Dusavik, near Stavanger,
one of the main supply bases for the offshore industry, and owned by the
Stavanger shipping company Smedvigs Tankrederi AS.38 However, for
most of the Norwegian shipping companies, the first point of entry to the
oil sector was investment in oil companies.
Three of Norway’s leading shipping companies—Sig. Bergesen d.y. &
Co., Anders Jahre and Fearnley & Astrup, as well as the Aker Group,
where Fred. Olsen was the major owner—participated in the first
Norwegian oil consortium, Noco, which was established in 1964. When
a second consortium was established the same year, the majority of the
owners came from the shipping industry.39 The participants in these con-
sortia were mainly the larger Norwegian shipping companies. There was
also a handful of other companies that had gained exploration rights, and
in the early 1970s more than 30 Norwegian shipping companies had
bought shares in such companies. In fact, several of the Norwegian com-
panies with parts in the various oil blocks had only or mainly capital from
shipping. KS AS Polaris, AS Pelican Co. KS, AS Syracuse Oils Norge, KS
37
See Kvendseth (1988) for Ekofisk and Hanisch and Nerheim (1992); Nerheim (1996); and
Ryggvik and Smith-Solbakken (1997) for a more comprehensive history of the development of the
Norwegian offshore oil and gas industry.
38
See Nerheim and Utne (1990) for the well-written business history of Smedvig, an enterprise that
went through the full conversion from a traditional shipping company to an offshore company
during the period 1965–1995. Smedvig had also participated, together with a cement company,
another shipping company and a shipbroker, in the first Norwegian offshore base.
39
After the two consortia were merged in 1965, 11 of the 20 participating companies had their
background within shipping; see Saga Petroleum (1997). Two of the best introductions to the ship-
ping companies’ various engagements in the offshore oil industry by the early 1970s, are Seeberg
(1974) and Tveit (1973).
250 S. Tenold
25/4 Norsk AS and Scanpet were among the most serious contenders to
the large oil companies, and they were all mainly vehicles for shipping
companies’ investments.40 In 1972, Saga Petroleum, the major private
Norwegian oil company was established. More than 50 of the 96 compa-
nies that participated were shipping companies, and these provided
around 60 per cent of the capital.41
In addition to their role in establishing and developing the leading pri-
vate oil companies, shipping interests were important participants when
the activity on the Norwegian continental shelf grew rapidly in the early
1970s. One important area was supply shipping. Several of the larger
shipping companies invested in supply ships, but this was also a way into
the offshore market for new owners with traditions stemming from fisher-
ies or coastal transport. The initial support for the offshore industry came
from rebuilt fishing vessels and simple, smaller cargo ships. The first pur-
pose-built vessels were delivered in 1971, and by 1973 there were 24 sup-
ply vessels flying the Norwegian flag, with another 46 on order.42 The herd
behaviour again had consequences for the functioning of the market: as
the supply of such ships gradually became plagued by overcapacity, ship-
owners began to cooperate with regard to management and operations.
Norwegian companies and seafarers had certain advantages in the
operation of vessels in the North Sea. They were aware of and used to the
difficult conditions, and also had an advantage in dealing with the rou-
tines and procedures of Norwegian bureaucracy. Gradually they acquired
competence that enabled them to take on new tasks—traditional supply
and stand-by services were supplemented by pipe laying, seismic surveys,
well intervention and so on.
The historian Helge Ryggvik has referred to the Norwegian shipping
companies’ advantages within the supply sector as “self-evident.” He sees
the entry into rig ownership as more surprising, as this activity—despite
the mobility of the rigs—had an “industrial” rather than a “shipping”
40
Tveit (1973, 18–27).
41
Calculated on the basis of Tveit (1973, 15–18). The other two major Norwegian companies were
Statoil, which was fully state-owned, and Norsk Hydro, where the authorities owned the majority
of the shares from the early 1970s onwards. See Ryggvik (2000) for a good introduction to the
ownership development.
42
Hanisch and Nerheim (1992, 228–231).
character. This reflected the manner in which the cooperation with for-
eign interests was organized. Most of the shipping companies that
invested in rig ownership initially relied on foreign operators to take care
of the drilling—they were “subcontractors, far down in the offshore
hierarchy.”43
In the late summer of 1971 Smedvig was the first Norwegian company
to order a purpose-built drilling rig, unleashing a veritable flood of new
orders; “in the course of a few autumn months nine semi-submersible
platforms were ordered, to be registered in Norway.”44 This signalled the
breakthrough for offshore oil in the shipping industry—or the break-
through for shipping in the oil industry. Almost half of the 25 largest
shipping companies participated in the rush for newbuildings in 1971.45
The Aker group, in cooperation with the Bergen shipping company
Odfjell, developed Aker H-3, a platform specifically designed to cope
with the depth and the harsh conditions in the North Sea. The H-3 plat-
form was the focus when the second contracting boom took place, in late
1973 and early 1974. By the end of 1974, 54 drilling rigs had been
ordered with Norwegian participation. The Norwegian shipowners
brought a new element to the oil industry—speculation. Enticed by the
high rates, they ordered rigs without securing employment in advance.46
The spot-
market strategy that would create enormous problems for
Norwegian tanker owners was simply transferred to the rig sector.
The motivation was money. In 1974 the Norwegian rig owners man-
aged to get spectacular rates; two-year contracts at USD32,000 per day
for an Aker H-3 platform in January were surpassed by a five-year con-
tract at around USD35,000 per day in May and finally, for Fred. Olsen’s
Borgny Dolphin, USD41,000 per day for the next two years.47
In 1975 the many rigs that Norwegian owners had ordered began to
come on stream, and the market deteriorated. The increasing supply took
place against a cooling market, as new taxation rules held the oil companies’
43
Ryggvik (2000, 237).
44
R.S. Platou, The Platou Report 1971, 23.
45
See the overview in Tenold (2000, 356–358).
46
Hanisch and Nerheim (1992, 233).
47
252 S. Tenold
exploration activities back. In 1976 more than 60 new rigs—leading to a

30 per cent increase of the fleet—were delivered. As supply eclipsed
demand, rigs were laid up or rebuilt to dwelling and service platforms.
Although the financial situation was more positive than in the shipping
sector, oil rig owners could apply for support from the Guarantee Institute,
and 13 drilling vessels were included. When the market picked up again in
the late 1970s, these engagements were settled without losses.
When shipping was replaced by petroleum as Norway’s most important
export sector, the competence that had been built up in the shipping com-
panies played a crucial role. Sometimes the two maritime industries
worked closely together, for instance in the case of shuttle tankers—ships
transporting oil from the offshore fields, as an alternative to pipelines.
Improvements in technology revolutionized this manner of moving oil. In
1971 it took almost two months for the Greek tanker Theogennitor to
move 34,000 tons of oil from the Ekofisk field to Stavanger. During 2001,
when oil production peaked, a fleet of 28 shuttle tankers moved a total of
86.4 million tons of oil, in more than 883 separate voyages.48 Compared
with Theogennitor, the shuttle tankers’ productivity had multiplied by a
factor of 15 as a result of economies of scale—the ships varied from 87,000
to 150,000 dwt—and improved loading and discharging equipment.
By the end of the 20th century, Norwegian companies—relying on
both capital and competence from shipping—had become world leaders
within the advanced, deep-water search for and production of oil and gas.
There is a clear upwards trajectory in the value chain when it comes to the
Norwegian shipping companies’ offshore involvement. As skills were
acquired, the foreign operators were replaced by Norwegian managers,
operators and personnel.
The increasing offshore activity on the Norwegian continental shelf
was a lifeline for many shipping companies, providing new business
opportunities and a revenue stream in a difficult time for shipping.
However, there were also shipping companies that attempted to enter the
offshore sector, and failed. Just as in the shipping industry, strong fluctua-
tions in rates and activity meant that deep pockets—or patient credi-
tors—were an advantage, and at times a necessity.
Lindøe (2009, 19).

48
Working (Almost) from Home

For Norwegian seafarers, the offshore activity was undoubtedly a new
and beneficial opportunity. Work was closer to home, with good salaries
and shorter periods away from home. Again, the timing was very good.
From 1973 to 1981 the number of seafarers employed in the foreign-
going Norwegian fleet declined from 45,000 to 34,000—a reduction of
11,000 seafarers. At the same time, the number of unemployed seafarers
hardly increased, from 1143 to 1594. This 40 per cent growth was in fact
lower than for unemployment in general, which increased by more than
90 per cent.49
Some of the seafarers left the business altogether, but many started a
new working life “offshore.” Former seafarers were in high demand.
Engineers and other officers “had an education and experience that
proved to be extremely valuable in connection with the construction and
operation of petroleum installations in difficult North Sea conditions.”50
It is evident that this was a mutually beneficial arrangement; the seafarers
emphasize the “very good” working arrangements offshore, which are
“much easier” than in the deep sea fleet.51
While the introduction of the NIS saved international shipping under
the Norwegian flag in the long term, and many seafarers found attractive
employment elsewhere, the 1980s was a tough period for those working
at sea. As shipping companies replaced the Norwegians with foreigners,
“many sailors suffered mentally and emotionally; they lost their income
and standard of living in a very short time.”52 By the start of the 1990s,
the more than 6000 seafarers that worked on NOR-vessels in Norwegian
waters also saw increased competition. The basis was foreign companies,
sometimes subsidized, from other European countries.
From 1965 to 1973, in the growth period before the shipping crisis
had started to bite, the number of Norwegian seafarers fell by around a
third, as a result of rationalization and economies of scale. From 1973
49
Norway, Parliament, NOU 1983, Skipsfartens konkurranseevne, 76–77.
50
51
Mack (2007, 352).
52
Mack (2007, 353).
254 S. Tenold
until the introduction of the NIS in 1987, the number was halved, to
around 17,000, as ships were sold abroad and flagged out.53 By the year
2000, employment had increased to almost 15,000 Norwegian seafarers
on NOR-vessels and almost 4000—mainly officers—on NIS-vessels, in
addition to those that worked on ships flying other flags.54
Although the decline in employment halted, and was even reversed,
the cultural impact of employment on Norwegian ships has changed dra-
matically. As late as the 1970s, around a third of the male labour force
had spent some time at sea. For many, it was a temporary adventure and
a way to see the world in the period before mass travel and cheap airplane
tickets. For others, it was a means of escape. Up until the 1970s, a stint
at sea was seen as the best way to instil discipline and a sense of responsi-
bility in “unruly boys.” Today, there are few acceptable alternatives.
In the old days, those working in the cafes and bars in the main ports
had a special trick to deal with drunken sailors: when they threw them
out of the establishment, they would put their hats on back-to-front. This
would make it very clear for the next bar owner that these sailors had had
too much to drink, and should be sent back to their ship, rather than be
served.55
Today, the hats, the red-light districts and adventure-seeking Norwegian
sailors in exotic ports have gone. Bergen Bar, Tønsberg Bar and Café
Håpløs have closed their doors. Most Norwegian seafarers have returned
home. They are no longer the “heroes who came home” telling “about the
world or their life experiences,” no longer the explorers that “carried the
Chesterfields in their pockets and were naturally tanned in the middle of
winter.”56
Today, all kinds of Norwegians go abroad. But the seafarers have largely
returned home. The busiest seamen’s church—now rebranded as the
“Norwegian Church Abroad”—is the one at Gran Canaria, and around a
third of the resources that the seamen’s church has is used in Spain. The
majority of the European seamen’s churches are not in important port
53
Calculated on the basis of Statistics Norway (1994, 487).
54
Norway, Parliament, Stortingsmelding 31 (2003–2004), 30.
55
Marthinsen (1998, 61).
56
Mack (2007, 351).
cities, but in tourist destinations, both on the coast and inland. However,
there are also seven chaplains working on the oil platforms on the
Norwegian continental shelf, and another three involved with supply
vessels.57
The plan that Erling Dekke Næss presented in 1984 saved Norwegian
deep-sea shipping under the Norwegian flag, but it was too late to save
most of the seafarers in the ocean-going Norwegian fleet.
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Royal Geographical Society of London, 12, 196–206
D. Bakka (1999) I hardt vær. Skipsfartskrise og samlingsprosess – Norsk
Sjøoffisersforbund 1995 (Bergen: Norsk Sjøoffisersforbund)
J.G. Bjørklund & B. Kolltveit (1989) ‘Norsk sjøfart i det 20. århundre’, in
B. Berggren, A.E. Christensen & B. Kolltveit (eds) Norsk Sjøfart (Oslo:
Dreyers Forlag AS) 126–311
R. Carlisle (2009) ‘Second Registers: Maritime Nations Respond to Flags of
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mannskap, veiledning til selvstudium, (Oslo: Norsk bibliotekforening) 3–37
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W.J. Harvey (2005) Kristian Jebsens Rederi AS Bergen – A Group History
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R. Kvam (1971) Den billige arbeidskraften (Oslo: Pax Forlag AS)

S.S. Kvendseth (1988) Funn! Historien om Ekofisks første tyve år (Stavanger:
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Wigestrand Forlag & Stavanger Maritime Museum)
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Petroleumsforening)
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the American Philosophical Society, 26:130, 459–476
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nale. En studie av selskapsstruktur og internasjonalisering (Oslo: Senter for
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Oljehistorie 3 (Oslo: Norsk Petroleumsforening)
Saga Petroleum (1997) Sagaen om Saga (Oslo: Saga Petroleum ASA)
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tene i Nordsjøen’, unpublished thesis (Bergen: Norwegian School of Economics
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right holder.
9
Onshore and Offshore: The New
Maritime Norway
At the beginning of the 20th century, Norwegian shipping had a signifi-

cant position, both domestically and internationally. Shipping was one of
the cornerstones of the Norwegian economy, and no country had put so
much of its resources into their merchant marine. Although there was a
predilection for relatively outdated sailing tonnage, Norwegian owners
had managed to carve out important niches in the world market.
However, the strong expansion that had characterized development in
most of the second half of the 19th century appeared to be over.
From the late 1870s to 1900 the Norwegian share of the world fleet
declined, from around 6 per cent to between 4 and 5 per cent.1 However,
the fleet was in the midst of a structural transformation. The technologi-
cal shift from sail to steam and wood to steel led to changes in a number
of areas: the trades in which the ships operated and the manner in which
they were managed, the skills that were needed both at sea and on shore,
1
The Norwegian share of the world fleet depends on how and what we measure. The share of the
sailing tonnage was around 10 per cent, while the share of the steamship fleet—as seen in Fig.
1.1—was around 3.6 per cent. The most representative measure is probably “effective tonnage,”
which takes into account the productivity differences between various technologies. The share of
the world fleet then becomes between 4 and 5 per cent, depending on the lower cut off-point for
the size of individual vessels.

260 S. Tenold
the localization of shipping companies, the manner in which vessels were

financed, and so on.
At the end of the 20th century Norwegian shipping was going through
a similar structural transformation related to the increasing activities
within offshore petroleum exploration. Both the “Norwegian” and the
“shipping” element had changed significantly over the preceding
100 years. The standard, early 20th century definition of a Norwegian
ship—a seagoing vessel with Norwegian flag, Norwegian seafarers and
Norwegian owners, but typically operating all over the world—would no
longer be relevant. Moreover, “shipping” had become a far more diverse
activity than it was at the start of the 20th century, and during the cen-
tury the geographic basis of the industry had developed. The North
Atlantic, which was the main arena at the start of the century, had been
supplemented by strong growth in other regions, with the Pacific becom-
ing particularly important.
The Power Centre in the World Economy Shifts

The increasing role of Japan in the world economy and international
shipping in the decades after the Second World War was just a harbinger
of what was to come. Two generations of Asian “tigers”—led by the super
exporters Hong Kong, Singapore, South Korea and Taiwan—were fol-
lowed by the enormous resources of China.2 The end result was a dra-
matic transformation of world production and trade in the second half of
the 20th century.
The strong growth of international trade, investment and income in
the second half of the 19th century is often referred to as the birth of the
international economy. Resources in Africa, America, Asia and Australia—
resources that had previously been left isolated and unused—became
important in an intercontinental exchange of goods. The integration of
2
These four countries, often referred to as the “First-generation Asian Tigers,” were followed by the
“Second-generation Asian Tigers”—Malaysia, Indonesia and Thailand. The “Asian economic mir-
acles” lost some of their shine after Japan’s lost decades of low economic growth and the Asian crisis
in the late 1990s. However, the resurgence of growth, coupled with the economic might of China,
implies that the gravity of the world economy has undoubtedly shifted.
Onshore and Offshore: The New Maritime Norway 261
resources from different continents led to a strong increase in both pro-

duction and productivity. Nowhere was this more evident than on the
American continent, particularly the northern part, where the coupling
of European labour and capital with domestic land and resources led to
“the first era of globalization.” It also paved the way for the strongest
nation—the world’s first superpower—in the 20th century.
The post-war integration of several billion Asian workers and consum-
ers in the international economy has had a similar effect, although the
economic importance has been more important than the strategic role.
New technological possibilities have encouraged specialization and divi-
sion of labour; outsourcing and foreign direct investment, from “Made in
Hong Kong” in the 1970s to “Made in China” in the 1990s. Gradually,
Asian countries have produced and exported more and more advanced
products—to the benefit of workers at home and consumers abroad.
For many European companies, the Asian expansion came at a cost, as
businesses that were unable to compete had to downscale production or
seek subsidies or other types of support. The manufacturing sector was
particularly vulnerable, and deindustrialization was a phenomenon that
demanded a tough social and economic transformation in many Western
countries.3 However, the imports from Asia were only part of the story.
Although low-cost production in Asia was seen as a culprit in much of
the rhetoric about the loss of manufacturing jobs in the Western World,
increasing wealth (giving a higher relative demand for services), produc-
tivity growth and domestic outsourcing were more important than inter-
national trade in explaining the loss of jobs within manufacturing.4
A case in point is the shipbuilding industry. When the demand for
new ships dried up during the shipping crisis of the 1970s and 1980s,
European authorities responded first by subsidizing production, then by
orchestrating a controlled downsizing—and in some instances total
removal—of the industry. The shipbuilding industry moved to Asia—
where three countries are now totally dominant, particularly in the high-
volume segment of the industry. China, Japan and South Korea produced
3
From 1970 to 1994 manufacturing employment in the 23 most advanced economies fell from 28
to 18 per cent of the workforce; Rowthorn and Ramaswamy (1997, 2).
4
See Rowthorn and Ramaswamy (1997).
262 S. Tenold
around 90 per cent of the world’s tonnage in the first decades of the 21st
century
In the last part of the 20th century and the beginning of the 21st,
Norway was lucky. The country’s industrial structure—primarily export-
ing raw materials and services rather than manufactured products—
meant that this high-income economy got a double benefit from the
manner in which globalization unfolded. The demand for petroleum and
shipping increased, pushing up the price of the country’s exports. At the
same time, the spread of low-cost production put a downward pressure
on the price of the country’s imports—but without any serious adverse
effects on Norway’s domestic industries.
The result was a massive improvement in the terms of trade—a mea-
sure of how much import a given amount of export can buy. From 1995
to 2000, the Norwegian terms of trade, measured relative to its most
important trade partners, improved by almost 40 per cent.5 The only
other time Norway had seen a terms of trade improvement as strong as
the one around the year 2000 was during the First World War, when
shipping earnings, in particular, boosted export prices.
The Centre Shifts at Home

As conventional shipping declined and the exploitation of oil and gas
increased, the power centre of the Norwegian economy gradually shifted
from one volatile maritime industry to another.
Norway started the 20th century as one of the world’s leading mari-
time nations, sending ships and sailors all over the world to carry goods
across the sea. At the end of the century, Norway was still a major ship-
ping nation—and Norway’s welfare was still closely linked to the sea.
However, the country’s shipping industry was both quantitatively and
qualitatively different from what it had been 100 years earlier. Some of
5
Data calculated on the basis of the background files for Norway, Parliament, Stortingmelding 29
(2016–17), Figure 5.2.C. The terms of trade continued to improve after the turn of the century,
peaking in 2008, just before the financial crisis, when the price ratio was more than double that of
1992. In fact, these beneficial price movements implied that the Norwegians got twice as much
foreign products for a given volume of exports as they had done 16 years earlier.
the main features of the last century—the rapidly increasing ship sizes
and the reliance on distant markets—had been reversed over the last
decades. This reflected the fact that traditional seaborne transport—deep-
sea shipping in foreign waters—was supplemented by local activity
related to the offshore petroleum industry. In 1992 the offshore fleet—
including rigs and ships—made up less than 19 per cent of the value of
the Norwegian fleet. By 2006 the share was more than 40 per cent, and
this increased to approximately half of the fleet, if the shuttle tankers
serving in the North Sea are included.6
In the last decades of the 20th century the offshore workers on plat-
forms and vessels had more in common with the fishermen than with the
sailors a hundred years earlier. They work in a maritime setting, often
near the Norwegian coast, harvesting resources, those of the sea and those
below the seabed. There was thus a proximity to Norway and Norwegian
society that was very different from that of the old sailors on sailing ships
or early steam vessels, whose visits to Norway were short and far between.
Traditional deep-sea shipping saw an increased concentration in the
last decades of the 20th century, reflecting the fact that the activity has
increasingly been confined to a few major maritime centres, from which
large parts of the Norwegian merchant marine were managed and oper-
ated. Many of the smaller home ports along the coast relied on a hand-
ful—or even fewer—companies, and if these folded and there was no
longer a critical mass, the result was often the complete disappearance of
shipping. At the beginning of the new millennium almost three-quarters
of the Norwegian fleet was controlled by companies in Oslo and Bergen.7
Several other communities—Grimstad, the Tønsberg area, Haugesund—
also retained companies involved in deep-sea shipping, but for many
coastal towns and cities the link to the sea was largely lost, as shipping
companies gave up or moved elsewhere.8
6
Bakka (2017, 215).
7
Due to geographic specialization, this share varied based on the manner in which it was measured.
At the end of 2003, 31 per cent of the ships were Oslo owned and 30 per cent were Bergen owned.
However, based on dead weight tonnage, the shares become 50.4 and 22.9 per cent, respectively.
Based on gross tonnage, Oslo’s share was 53.5 per cent and Bergen’s 21.3 per cent; Norway,
Parliament, Stortingsmelding 31 (2003–04), 25.
8
As shown in Hervik and Jacobsen (2001), shipping companies were still present all along the
coast, but in many instances their activity and turnover was very limited or their markets were
outside traditional merchant shipping.
264 S. Tenold
While traditional shipping saw regional concentration, the services

related to the offshore petroleum exploration resulted in a new distribu-
tion of the activity along the coast. The establishment of a petroleum-
industrial complex in Stavanger, which was chosen as Norway’s “oil
capital,” implied that much of the oil and gas activities were centred
there. The city’s shipping companies took advantage of the possibilities.
Tellingly, Smedvig, the city’s major shipping company, was an early inves-
tor in oil rigs and facilities for the offshore sector. Following disastrous
investments in supertanker tonnage, the company made the transition to
a full-fledged rig company in the middle of the 1990s.
The shipping side of the Norwegian offshore industry around the turn
of the millennium exhibited two traits that it shared with the develop-
ment of foreign-going shipping more than a century earlier; the interna-
tional component and the local component.
With respect to the international dimension, the industry built up
skills and competence in local and regional markets. This was subse-
quently used to gain market share in foreign waters. The offshore indus-
try is in the process of doing the same, although it still has a stronger
home presence that the shipping sector did around 1900.9
There is another parallel at the local level, concerning the manner in
which the offshore industry is embedded in local communities. The
expansion of Norwegian shipping in the 1850s and 1860s was primarily
based on ships built, equipped, financed and manned locally, particularly
on the South Coast. For the offshore supply vessels, there was a similar
local base, though the centre had shifted to a number of smaller villages
on the West Coast. The majority of the supply companies are located
north of Stavanger, south of Bergen and in Møre og Romsdal, a county
previously primarily known for fishing.
The offshore industry was characterized by new and more advanced
solutions. Shuttle tankers and floating production/storage vessels revolu-
tionized the production process, and the latter types of vessels became
particularly important in connection with the exploitation of marginal
9
This comparison is based on the shipping side of the offshore industry, and the points do not
necessarily apply to the rig sector.
oil blocks with limited reserves. Supply shipping saw a similar move
towards more advanced vessels. Converted fishing vessels began to be
replaced by purpose-built supply ships at the beginning of the 1970s. By
the last decade of the 20th century, there had been substantial growth
and diversification of the supply fleet.
The new ships were not only larger and more powerful versions of the
old platform supply vessels, designed for transport, support or anchor
handling. There was substantial investment in ships that could perform
advanced underwater (subsea) operations, ships with special equipment
for seismic surveys, cable and pipe laying ships, construction vessels and
so on. Some of the companies were based in traditional shipping centres
such as Oslo, Kristiansand, Stavanger and Bergen. However, many
smaller places were also engaged, including Skudesneshavn (with deep-
sea shipping roots) and Bømlo, Austevoll, Fosnavåg and Ålesund (mainly
with a basis in fishing).10
As a result of the shift from deep-sea shipping to offshore, the struc-
tural composition of the Norwegian fleet changed. The strong growth
after the introduction of the Norwegian International Ship Register
(NIS) had included a number of large and relatively simple ships. Among
those was Knock Nevis, the world’s largest ship, which had been declared
a total loss after having been hit by bombs during the Iran-Iraq war. The
ship was bought by Norman International, refloated, repaired and
renamed: first Happy Giant (1989–1991), then sold and renamed Jahre
Viking (1991–2004).
Norman International is an example of the new manner in which ship-
ping could be conducted. In the period 1985–1990 the company, pri-
marily via ships bought by limited partnerships [kommandittselskap],
rapidly built up a fleet of more than 4 million dead weight tons (dwt) and
became Norway’s second largest shipping company. In 1991 the com-
pany decided to wind up operations, and make a quick exit—the fleet of
4.1 million dwt in January 1991 had dwindled to zero in January 1992.11
The NIS euphoria in the late 1980s had given rise to a lot of specula-
tive purchases. Even Rolf Sæther, Managing Director of the Norwegian
10
See the overview of Norwegian offshore companies in Bakka (2017, 220).
11
Isachsen (1992, 9–10).
266 S. Tenold
Shipowners’ Association, criticized the companies that followed an “asset-

play” strategy, based on an increase in shipping values, substandard ton-
nage and high gearing—often 80 per cent mortgage financing by the
banks.12 When vessel values collapsed in early 1992, following a strong
reduction in freight rates, many of the newcomers were forced to ship
their oars.
During the 1990s there was gradually a reduction in the role of large
tankers and dry bulk ships, as the trend towards specialized tonnage con-
tinued. The competitive situation in the different segments partly explains
this development—there was substantial variation in the profitability of
the various parts of the shipping market. A survey of stock exchange
listed companies in the 1990s suggests that while the average annual
return on companies involved in chemical shipping and offshore was
around 12 per cent, the corresponding figure for dry bulk companies was
minus 7 per cent.13
The relative reduction in high-volume shipping in Norway was not
unique. In fact, the transformation was far more muted than in other
Western countries. In the last decades of the 20th century, two groups of
countries, in particular, increased their importance in world shipping.
The East Asian tiger economies took over a larger part of the value chain
with investments in tonnage, and the Flags of Convenience continued to
grow.
A Two-Faced Industry
As shown in Chap. 4, the shipping industry was a pioneer in the use of
companies and registration in “unrelated” foreign domiciles. Until the
beginning of the 1970s, Flags of Convenience were primarily used by
American and Greek shipping companies, in addition to companies in
some countries where special geo-political considerations played a role,
such as for instance Israel. In connection with the shipping crisis, both
the extent and the geographical spread of the use increased substantially.

12
Birkeland and Eide (2000, 4).

13
The establishment of second registries—such as the NIS—only tem-

porarily halted the move towards Flags of Convenience. In the last
decades of the 20th century and the beginning of the 21st, Flags of
Convenience have basically become “an industry standard.” Like fast-
food chains, the leading Flags of Convenience offer miniscule and user-
friendly variations of an established menu, with the pricing and the
product on offer more or less identical, and speed of service an important
competitive parameter. By the end of 2000, Panama had a fleet of almost
163 million dwt, Liberia more than 75 million dwt and the Bahamas
almost 45 million dwt. The three leading Flags of Convenience controlled
almost 38 per cent of the world fleet.
If we go “behind” the Flags of Convenience, and look at the actual own-
ership of the world fleet, the increasing role of Asia—and the disappear-
ance of many of the old European shipping nations—becomes evident. A
comparison of Table 9.1 and Table 2.1 reveals the massive changes in the
ownership of the world fleet during the 20th century. Moreover, these
Table 9.1 The 15 most important maritime countries and territories, January 2001
Foreign Per cent
Ships at Ships 1000 dwt 1000 dwt flag (per of world
home abroad at home abroad cent) fleet
Greece 785 2476 43,580 99,527 69.6 19.1
Japan 781 2150 15,225 83,509 84.6 13.2
Norway 907 791 27,733 32,308 53.8 8.0
United States 508 890 9788 34,947 78.1 6.0
China 1617 599 22,341 18,393 45.2 5.4
Hong Kong, 166 385 9075 26,627 74.6 4.8
China
Germany 467 1640 7436 25,437 77.4 4.4
Republic of 473 430 7605 18,060 70.4 3.4
Korea
Singapore 476 280 12,842 7790 37.8 2.8
UK 407 432 8343 10,973 56.8 2.6
Taiwan, PRC 162 359 7205 11,662 61.8 2.5
Denmark 418 318 7931 10,193 56.2 2.4
Russian 2190 349 8566 7500 46.7 2.1
Federation
Italy 502 129 8712 4504 34.1 1.8
India 358 52 10,328 1532 12.9 1.6
Source: UNCTAD, Maritime Transport 2001, 30–31
268 S. Tenold
changes reflect even more dramatic changes in world production, interna-

tional trade and global income levels.
With limitations on cross-border investments disappearing, a process
of international consolidation took place in shipping, and there were
many Norwegian targets.14 By joining the resources of the Høegh and
Smedvig families, among others, Bona shipholding had become the
world’s second largest operator of Aframax-tankers, oil tankers in the
60,000–100,000 dwt range, and also controlled a fleet of larger combina-
tion carriers. In 1999 the company was bought by the Bahamian com-
pany Teekay, based in Vancouver, listed on the New York Stock Exchange
and originally established by a Dane. Two years later, Teekay took over
Ugland Nordic Shipping’s fleet of 16 shuttle tankers, but the shopping
spree was not over. In 2003 Navion, owned by the oil company Statoil,
with a fleet of 50 vessels, was sold to Teekay for around USD800 million.
With Stavanger as base, much of the shuttle tanker fleet had been con-
solidated under the auspices of this Bahamian-Canadian-Norwegian ven-
ture. In shipping, nationalization questions were becoming more and
more complex.15
The internationalization of ownership was not a one-way street. Just
like foreign interests bought Norwegian shares and ships, Norwegians
invested abroad. For instance, after the merger of Bona and Teekay, the
Høegh family was among the largest shareholders in the latter company.
The Rasmussen family of Kristiansand had been Statoil’s partner in
Navion, but sold its share before the Teekay takeover. Subsequently, the
family reduced its exposure in Norway, but became major investors in
Norden, one of the leading Danish shipping companies, where they at
times owned more than 20 per cent of the shares.
The most well-known, and definitely most international, of all
“Norwegian” shipowners, is John Fredriksen. After training and working
as a broker in Montreal, New York, Oslo and Singapore, he moved to
London in the late 1970s, became a Cypriot citizen in 2006 and used the
Swedish company Frontline, listed on the stock exchanges in Oslo and
14
See Klepsland (2011), for an analysis of the ownership structure of shipping company shares
listed on the Oslo Stock Exchange, including a good discussion of foreign ownership.
15
Bakka (2017, 206–211). For the fascinating story of Teekay’s impressive expansion, see Ingpen
(2013).
New York, to become one of the world’s largest tanker owners. The case
of Fredriksen illustrates that perhaps the whole idea of using the nation
state as a label may become outdated in the case of shipping.16
Redefining the Maritime Nation

Up until the middle of the 1970s, Norwegian shipping had been dealt a
very good hand in the card game that is domestic politics. Relevance,
importance and money are always convincing arguments. The industry’s
crucial role in the balance of trade had been one trump card. More than
50,000 seafarers—many of them living in rural areas with few employ-
ment alternatives—had been the other. By the late 1980s, these argu-
ments were no longer valid.
The Norwegian Shipowners’ Association had to look elsewhere when
it wanted to convince the authorities that it was still relevant and impor-
tant. Its new arguments centred around the idea that it played a crucial
role in a broader maritime industry, what it referred to as Norway’s “mari-
time cluster.” The relationships and interconnections among companies
that were engaged in different parts of the Norwegian maritime industry
created competitiveness and value. Internationally leading companies—
shipping banks, shipping insurance companies, naval architects and a
classification society—depended upon the shipping companies.
Words are important. The shift from “shipping” to “maritime,” which
was first introduced during the fight for NIS, gained ground. It was
reflected in new cooperative organizations such as Maritimt Forum
[Maritime Forum], established 1990, which promoted the significance of
a wider network of maritime activities and businesses. Moreover, the argu-
ment was accepted by the authorities, who in the 1990s gradually replaced
the notion of a “shipping policy” with the need for a “maritime policy.”17
In 1984 there had been a similar rebranding, when the Norwegian
Shipowners’ Association changed its name from Norges Rederforbund (the
16
However, calling a book “Norwegian shipping in the first part of the 20th century, then a gradu-
ally more nationless shipping industry” would only be confusing.
17
See the thorough analysis of the political process and discourse in Fougner (2006, 177–201).
270 S. Tenold
Norwegian word reder means an individual owning ships) to Norges

Rederiforbund (where a rederi is the Norwegian word for a shipping com-
pany). This change was more than semantic. It reflected the new realities
and the manner in which the industry had developed; shipping had
become a modern industry, where there was often a separation of owner-
ship and management. As such, the name change was overdue. However,
it was also a meaningful clarification vis-à-vis the general public; “we
serve companies, not wealthy individuals.”
From the late 1980s onwards there was a shift in the reasoning about
economic policy in many countries. Inspired by the Harvard professor
Michael Porter, politicians and industry federations embraced the ideas
of economic “clusters,” where competitiveness was enhanced by interplay
between agents in a specific industry.
The Norwegian Shipowners’ Association was among the pioneers in
the use of such arguments in a Norwegian context. A huge research proj-
ect on the competitiveness of Norwegian industries emphasized the
strong international position of the maritime industry in general and the
shipping companies in particular. They were the driving force in “the
most complete, the most international and the most knowledge-based”
industrial cluster in the country.18 The very first table in the 1992 report
on Norwegian shipping presents “maritime employment.” Deep-sea
shipping companies—referred to as the “core activity”—employed
22,300 Norwegians, around a quarter on land and more than 17,000 on
rigs and on NIS- and NOR-registered ships. However, the central mes-
sage was the fact that these people were crucial for the wider maritime
activities, which added almost 40,000 employees.19
For more than 150 years the demand for Norwegian shipping has been
quite detached from local markets. Consequently, the driving force in the
maritime clusters is not the competition for customers and market shares
domestically. Rather, it is the competition for labour and skills, technol-
ogy, knowledge and ideas in the local market. Moreover, the strength of
the cluster allegedly lies in the manner in which the shipping companies
interact with companies performing auxiliary functions such as insur-
ance, finance, consulting, classification and research.
See Reve, Lensberg and Grønhaug (1992) and Fougner (2006).

18
Wergeland (1992, 4).

19
The maritime cluster contained a number of companies that had man-

aged to climb on the shoulders of Norwegian shipping companies and
build up leading positions internationally. Det Norske Veritas had devel-
oped a substantial consulting and naval architecture business along with
its role as one of the leading international classification societies. The
company had also followed the shipping companies into the North Sea
and beyond, and built up a position as an important technical and busi-
ness consultant for both shipping and offshore companies.20
Another group of companies that had managed to develop strong
international market positions were the maritime insurance companies,
which in 2000 received premiums amounting to almost USD600 mil-
lion. Hull and protection and indemnity (P&I) insurance each made up
around 40 per cent of the total, with energy and cargo insurance provid-
ing the rest of the turnover.21
The initial international expansion of Norwegian banking to a large
extent followed in the slipstream of Norwegian shipping. They “followed
their customers” and the one area in which they had “unique compe-
tence” was within shipping.22 London-based Hambros Bank was the
banker par excellence for the Norwegian state, and also for Norwegian
shipowners. The bank employed a substantial number of Norwegian
nationals, and was a typical merchant bank, based on relationship bank-
ing. In 1968 three Norwegian Banks, in cooperation with a Dutch bank
and Hambros, established Ship Mortgage International in Amsterdam,
in order to provide first-priority mortgages.
Gradually, as the domestic markets became liberalized, other banks
increased their interest in shipping, often acquiring competence and per-
sonnel from within the shipping companies. Kredittkassen in the mid-
1980s decided to market itself as a leading shipping bank for European
customers, regardless of whether their business was related to Norway.
20
See Paulsen, Andersen, Collett and Stensrud (2014, 147–176).
21
CEFOR (2000, 10). There are several examples of how “auxiliary industries” become world-
leading even without the presence of important local shipowners. On the South Coast, Gard has
remained a world-leading provider of P&I (protection and indemnity) insurance services from a
base in Arendal, even after most of the city’s shipping companies had disappeared. Much of the
technical research has been centred around Marintek and the technical university and research
environment in Trondheim, a city with an extremely modest maritime heritage.
22
Knutsen, Lange and Nordvik (1998, 156); see also Gisnås (1995).
272 S. Tenold
The basis was its “considerable expertise in shipping and the long history
of dealing with shipping customers.” The bank saw this as a competence
for which there had to be a market abroad.23
Classification, insurance and banking lived side-by-side with the ship-
ping companies for more than a century. However, the manner in which
shipping developed—with a separation of seafaring labour and the own-
ership of the vessel—opened up a number of new business opportunities.
One was the sale of manning and ship management services. Several
companies with Norwegian connections established themselves in this
new market.24
With the question of flag and labour costs out of the picture, the main
differences between shipping companies in various countries were related
to onshore elements such as tax, wage levels for office personnel and the
quality of infrastructure. For the Norwegian Shipowners’ Association, the
tax question became a priority. A tax reform introduced in 1992 made
the conditions for Norwegian shipping companies much more difficult.
Aiming at “inter-industry” neutrality, shipping lost some of its tax advan-
tages. In addition to strengthening the previously generous depreciation
regime, the reform reduced the availability of capital by tightening up the
rules regulating limited partnerships.
In 1996 the Norwegian authorities changed their minds. The intro-
duction of a tonnage tax system, where tax is paid on the basis of the
tonnage, rather than operating profits, was welcomed by the shipown-
ers.25 Moreover, the introduction of a system of reimbursement for the
use of Norwegian seafarers made it more attractive to use local labour,
and increased the competitiveness of ships operating in Norwegian
23
Knutsen, Lange and Nordvik (1998, 286).
24
Lorange (2009, 100), presents the six leading ship-operating companies: V.Group, Thome,
Denholm, Wallem, OSM and the Schulthers Group. Three of these companies were established by
Norwegians: Thome from Vestfold in Singapore in the 1970s and OSM on the South Coast of
Norway in the late 1980s. Haakon Wallem from Bergen established a shipping company in the Far
East at the start of the century, and in the 1970s the company began selling management services
from a Hong Kong base. In 2006 the Wallem company was bought back by Haakon Wallem’s great
grandson, after having been in foreign hands.
25
The tax on operating profits was formally defined as a credit, which would have to be paid if
companies exited the arrangement to be taxed like “normal” companies. This was done in order to
avoid shipping companies planning to exit in years with an operating deficit, when they would be
liable to pay tax under the tonnage tax system, but not under the regular, non-shipping tax regime.
waters. The special tax arrangement for shipping companies and reim-
bursement for the use of Norwegian seafarers created optimism. However,
towards the end of the century the frequent political challenges to the
regime put the sincerity of the “shipping friendly” Norwegian policies in
doubt, and the arrangement was considered very unpredictable.
Bibliography
S. Birkeland & T. Eide (2000) Lønnsomheten i norsk skipsfart (Bergen: Stiftelsen
for samfunns- og næringslivsforskning)
CEFOR (2000) Annual report (Oslo: The Central Union of Marine Underwriters)
T. Fougner (2006) ‘Economic Nationalism and Maritime Policy in Norway’,
Cooperation and Conflict: Journal of the Nordic International Studies Association,
41:2, 177–201
L. Gisnås (1995) Jakten på kjempemarkedet – norsk business i Singapore (Bergen:
Fagbokforlaget)
A. Hervik & E. Jacobsen (2001) Det regionale maritime Norge – En vital nasjonal
næring med regionale særpreg (Oslo: Handelshøyskolen BI)
B. Ingpen (2013) Teekay – the first 40 years (Bermuda: Kattegat Limited)
F. Isachsen (1992) Crude Oil Shipping (Bergen: Stiftelsen for samfunns- og
næringslivsforskning)
J.E. Klepsland (2011) Utvikling av eierstrukturen i rederier notert på Oslo Børs
S. Knutsen, E. Lange & H.W. Nordvik (1998) Mellom næringsliv og politikk.
Kredittkassen i vekst og kriser, 1918–1998 (Oslo: Universitetsforlaget)
P. Lorange (2009) Shipping Strategy: Innovating for Success (Cambridge:
Cambridge University Press)
G. Paulsen, H.W. Andersen, J.P. Collettt & I.T. Stensrud (2014) Building trust –
The history of DNV 1864–2014 (Høvik: Dinamo Forlag)
T. Reve, T. Lensberg & K. Grønhaug (1992) Et konkurransedyktig Norge (Oslo:
Tano AS)
R. Rowthorn & R. Ramaswamy (1997) ‘Deindustrialization – Its Causes and
Implications’, IMF Economic Issues 10 (Washington DC: International
Monetary Fund)
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samfunns- og næringslivsforskning)
274 S. Tenold
right holder.
10
Epilogue: A Century of Norwegian
Shipping
At the start of this book, I suggested that Norway’s strong position in

international shipping at the beginning of the 20th century was based on
a combination of favourable geographical circumstances, a historical leg-
acy and a strong maritime culture. At the end of the 20th century, these
factors still played important roles, though they had changed dramati-
cally over the past 100 years.
The geographical circumstances were originally related to the long
coast—“Highway No. 1, the way to the north”—that had given Norway
its name. The coast made maritime skills a necessity. However, by the end
of the century the geographic dimension included not only the sheltered
sea lane and the rich fisheries, which had been so important during previ-
ous centuries. Now, as a result of improvements in technology, the favour-
able geography also included the vast exploitable petroleum resources
below the seafloor on the Norwegian continental shelf. These resources
have laid the fundament for new maritime activity and for new interna-
tional expansion. The sea is no longer as present in Norwegian daily life
as it was in the sailing ship era, when there was a sailor in most families
along the coast in the southern part of Norway and a fisherman in most
families in the north. However, the bounties of the sea are more visible in

276 S. Tenold
Norwegian statistics than ever before, and have helped make Norway one
of the world’s wealthiest countries.
Geography—and our ability to make use of resources—is a dynamic
concept. So is history.
Another 100 years have been added to Norway’s maritime history. The
20th century was a century of new opportunities, new policies, new les-
sons, new ideas and new strategies. It was also the century where shipping
lost its dominant position in the Norwegian economy and in particular
the hegemonial role in Norwegian exports. In the first 75 years of the
20th century, shipping revenue made up more than 43 per cent of
Norwegian exports, in the last quarter of the century the share was less
than 17 per cent.
At the start of the 20th century, shipping was an extremely important
source of personal wealth, and this fact was also reflected in politics.
Money was power, and well-off shipowners like Michelsen, Mowinckel
and Knudsen played crucial roles in the birth and redefinition of
Norway as a fully independent nation: “Shipowners held such an hon-
ourable position in the public opinion that they, almost as a matter of
course, were expected to guide the national ship and bring the country
and the people to a safe harbour.”1 Towards the end of the century, large
private fortunes were primarily made in other sectors and statesman-
like Prime Ministers have been found elsewhere. Shipowners no longer
make up such a large proportion of “the establishment” as before, and
“the establishment” itself has lost part of its privilege and power. During
the 20th century, shipping went from being extremely important to
being “just” important. Still, a history of relative decline is also a
history.
The 20th century brought a set of new heroes from the sea: the war
sailors who kept supply lines open and risked—and lost—their lives for
the Allied cause. The fact that it took decades for their crucial war efforts
to be rewarded and acknowledged echoes the manner in which the sea
and seafarers had previously been played down in Norwegian nation-
building. There was a similar lack of recognition of the maritime dimen-
sion during the national romantic period in the 19th century, when
Svendsen (1976, 7).

1
Epilogue: A Century of Norwegian Shipping 277
Norway fought to develop its own national identity and throw off the
shadows of Danish and Swedish rule. Inspired by the German traditions
of von Herder, the archetypal Norwegian—the one inhabiting the spirit
of the nation—was found inland, among peasants, in the forests and on
the mountains, rather than along the coast.2
For many decades, the typical heroes of the Second World War were
the domestic Norwegian resistance movement, often referred to as Gutta
på skauen—the boys from the woods. The prominence that they were
awarded in most stories of the fight against the Nazis overshadowed the
crucial role that Norwegian seafarers played in the outcome of the war.3
It also downplayed the sacrifices that the war sailors made—more than
3600 seafarers died as a result of the war, more than a third of all
Norwegian deaths. A detailed academic history of the Norwegian war at
sea was not written until the 1990s, while the war sailors had to wait
another 20 years until the authorities apologized in public for the lack of
recognition in the period after the war.
With the gradual removal of the shipping and seafaring dimension
from the lives of most people, maritime history and maritime culture
have become increasingly intertwined. Norwegians in the coastal areas
continue to have a strong maritime identity, but it is typically related to
forefathers that went to sea and old fortunes and artefacts, rather than
to their own experiences. This detachment accelerated in the last part of
the 20th century. As late as in the 1970s, around a third of all men in
the Norwegian labour force had spent some time at sea—a fascinating
figure that says something about the extent to which people’s lives were
influenced by the shipping sector and its opportunities. Then—
abruptly—the development changed. The shipping crisis, and the pol-
icy shifts that followed in its wake, implied that seafaring became far
less important, both as a temporary “rite of passage” and as a full-fledged
career.
2
Iversen (2011, 129).
3
The common version of the war history even put particular emphasis on certain parts of the
domestic resistance against the Nazis. Some factions of the resistance movement—for instance
those illegal groups that had a Communist bent—were sometimes erased, or at least obscured, from
the official history of the war. See Borgersrud and Eriksen (2015, 595), where the term “monopoly
of information” is used about the non-Communist resistance.
278 S. Tenold
Norway, the shipping nation, continues to be relevant, although

the number of Norwegian seafarers has shrunk and the ships people
see and hear about are more likely to be offshore vessels or cruise ves-
sels than cargo ships.4 The maritime culture changed gradually—first
with the transformation from sail to steam, then, as the ships got
larger; they became almost invisible, far removed from daily life. At
the same time, the nostalgic element has shifted—the memories and
the tales of the white sails have now been replaced by stories of young
rookie sailors picking rust and experiencing exotic locations around
the world.
In 1948, Karin Larsen, Professor of History at St. Olaf College in
Minnesota, published a much-lauded book on the history of Norway.
She pointed out that “[t]hroughout Norway’s history the greatest eco-
nomic, political, and cultural advance has been achieved when the people
have had untrammelled access to the surrounding ocean and have been
able to make use of the opportunities this offers.”5 When she wrote this
claim, it turned out to have just as much relevance for the future—the
second half of the 20th century—as for the past.
In the second half of the 20th century, new knowledge and new tech-
nologies enabled Norway to make use of opportunities that had been
developing for thousands of years on the Norwegian sea bed. Exploitation
of petroleum resources changed the economy, the politics and the cul-
ture. The maritime experience was extremely important for the formation
of Norway as a petroleum producer. Shipowners, shipyards and seafarers
all tried their luck in waters closer to home, then used the capabilities
that they acquired there to expand abroad. Consequently, the manner in
which these events unfolded was not unlike the expansion of Norwegian
shipping in the 19th century: build up competence at home, and then
compete in the world market.
4
An exception is along the West Coast of Norway, all the way up to the north, where seaborne
transport is still important for the movement of both passengers and cargoes. However, in particu-
lar in the densely populated areas in the south-western part of the country, trucks perform a surpris-
ingly large part of the cargo transport. In these areas, the Norwegian authorities have built
ridiculously expensive bridges and tunnels in order to get a “Highway number two,” more or less
parallel with the one that nature had already constructed.
5
Larsen (1948, 4).
Maritime Nation (-ation, -ation, -ation,

A
-ation)
What characterized Norwegian shipping in the 20th century? What were
the external and internal forces that shaped its development? Which
resources—and which responses—enabled Norwegian shipping compa-
nies to keep their position among the most important providers of sea-
borne transport services?
This book has presented the main development traits, the different
breaking points and eras. We have seen how the international economy
provided the backdrop—the ups and downs of world trade, affected by
business cycles and trade policies, resource endowments and global shifts
in production technology. We have seen how the two world wars were
states of emergency, where shipping became a crucial, but deadly danger-
ous, activity, with substantial losses of men and tonnage. At the same
time, the wars also ushered in modernization of the fleet, and thus paved
the way for long-term growth. We have seen how Norway developed
economically, politically and socially—how a maritime career went from
being month after month at sea to another “Nice day at the office?” job.
Merchant shipping, “has been, and remains, arguably the world’s most
international business,” according to the leading maritime historian, Skip
Fischer.6 In order to be successful in an industry with global competition,
the domestic skill-set and strategies have to be aligned with the require-
ments of markets far from home. This is extremely difficult, but Norway
has managed to do it with impressive consistency.
Initially, we asked the question, “Which factors—specific to Norway,
either alone or in combination—can explain the country’s leading role in
international shipping throughout the 20th century?” Returning to that
question, we can now conclude that Norway’s successful navigation of
the world’s most global industry depended on a number of factors: glo-
balization, liberalization, concentration, specialization and innovation.
These specific developments can be linked to the four analytical arenas
that were presented in Chap. 1: the international, the national, the
Fischer (2016, 78).

6
280 S. Tenold
regional and the company perspective. Naturally, the manner and pace
with which these factors have evolved have not been uniform across the
century—there have been periods of slow change and periods of rapid
change, and even periods of reversal.
International Development: Globalization

From an international perspective it is fairly unproblematic to explain the
development of the shipping industry and the relative position of the
Norwegian participants. All we need is the most basic instrument in the
economists’ toolbox—the concepts of demand and supply. By linking
demand and supply to economic globalization—increased integration in
the world economy, seen as growing flows of goods, services and factors
of production—the symbiotic relationship between the world economy
and Norwegian shipping is easy to identify.
The expansion of world trade—higher volumes, more countries, new
commodities—led to a high and increasing demand for the seaborne
transport services that Norwegian shipping companies could offer.
Although there has not been a one-to-one relationship between the
growth of world trade and the development of the shipping market, the
correlation between the two is strong. The overall trend has been going in
one direction—more trade, and more demand for seaborne transport.
But for shipping, the most turbulent periods have been when develop-
ment has deviated from this trend. The shipping business is especially
interesting when demand for transport capacity grows faster or more
slowly than the international economy in general.
From a Norwegian perspective, three peacetime periods were particu-
larly important—two with positive, and one with negative connotations.
The first period in which the international market developed positively
from a Norwegian point of view was the interwar period, when Norway’s
share of the world fleet doubled—from around 3.3 per cent in 1919 to
more than 7 per cent by 1939.7 The collapse of world trade during the
7
See Fig. 1.1. The data in this chapter primarily refer to figures and tables that have been presented
previously, and the footnotes will point to the previously used material, rather than the original
source.
Great Depression was partly a monetary phenomenon, appearing much

more violent because of falling prices, but in the interwar period trade
grew at a slower pace than before the First World War. However, seaborne
trade increased faster than trade in general, as a result of longer distances
and the fact that ships spent more time sailing “in ballast.” In fact, certain
segments even grew rapidly. The Norwegian strategy was focused on the
main growth segment, oil tanker transport. A combination of outsourc-
ing of transport services, extremely strong volume growth and increased
distances made this by far the most positive segment of the shipping
market in an otherwise difficult period.
Following the large losses during the Second World War, Norwegian
shipping increased its market share in the years after the hostilities ended.
Massive growth in manufacturing production and trade led to a strong
increase in the transport of raw materials. Consequently, the focus on
bulk transport continued to serve Norwegians well in the 1950s and
1960s—the heyday of modern Norwegian shipping. Crude oil transport
continued to expand rapidly, and was complemented by strong growth in
the seaborne trade of dry bulk goods such as coal and iron ore. The indus-
trialization of Japan, a country with a shortage of natural resources and
an abundance cheap labour, was a particularly strong influence on the
demand for shipping. Subsequent national industrialization projects in
Asia—first in the “tiger economies” and then in China towards the end
of the century—have had a similar positive effect on shipping demand.
In the interwar period and the first post-war decades, Norwegian ship-
ping companies performed better than most of their competitors, due to
their investments in market segments that grew more rapidly than other
parts of the shipping sector. In this period they made a lucky bet on the
tanker development, which was followed up by more resources when the
benefits of the strategy became evident. In the bulk and specialized mar-
kets, Norwegians could supplement their vast market knowledge and
international network of contacts by economies of scale and innovations
in vessel technology to remain competitive.
This strategy was favourable in a growing market, but became prob-
lematic after the demand for shipping collapsed. Following the oil price
282 S. Tenold
increases of the 1970s, Norwegians performed relatively badly, in a mar-

ket where overall development was particularly negative. The trajectory
had gone from outperforming a growing market, to underperforming in
a market that was going down. The collapse of the crude oil trade was the
most important factor behind the adverse Norwegian development.
Many owners had put all their eggs in one basket, and that was the basket
where the handle broke…
During the shipping depression of the 1970s and the 1980s, it took
almost 15 years before the markets recovered.8 As a result of the severity
of the downturn—in particular the fact that there were hardly any profits
to be made for more than a decade—Norwegian shipping was not far
from being eradicated. The strategies that had made Norwegian owners
particularly successful when the market increased—economies of scale,
frequent tonnage renewal, a focus on bulk transport—made them par-
ticularly vulnerable when the market crashed.
Expensive investments in redundant tonnage led to high capital costs,
and Norwegian labour costs were also high in an international perspec-
tive. With low freight revenues—or even no income at all, in the case of
laid-up ships—the equity of many Norwegian shipping companies was
rapidly depleted. Some survived due to the generosity of creditors, who
waited patiently until the market recovered. Others were forced to
approach the Norwegian authorities for support. By the beginning of
1979 the crisis had been such a drain on resources that more than half of
the shipping companies had negative equity.9 And the crisis was far from
over.
As the financial problems dragged on, and the creditors and the
authorities ran out of patience, two of the avenues for survival were
closed, with dramatic results. Banks forced the sale of ships. The authori-
ties wound up their engagements in the Guarantee Institute, which at its
peak had helped the owners of around a quarter of the fleet. The results
were dire. The majority of the Norwegian shipping companies that
existed in 1973 were out of business by 1987. Despite the most
8
There was a brief recovery—a false dawn—around the turn of the decade. Optimistic shipowners
reacted by ordering more tonnage, even before the existing surplus had been absorbed. The bad
times consequently came back with a vengeance.
9
Norway, Parliament (1980), Norges Offentlige Utredninger 45, 35.
f ar-reaching support to the shipping sector ever, the authorities had only
been able to put a plaster over what turned out to be a life-threatening
wound.
Most of the shipping companies that survived the crisis were in a pre-
carious financial situation. They were floating aimlessly, in choppy waters,
and were about to sink when they were thrown two lifelines at the same
time. The first one came from the market itself, where demand picked up
and the removal of surplus tonnage ensured that freight rates followed
suit. The second lifeline came from the Norwegian authorities. They
introduced the Norwegian International Ship Register, thus enabling the
use of low-cost foreign seafarers on Norwegian-flagged ships.
This takes us to the complementary, flipside explanation of the manner
in which globalization influenced the development of Norwegian ship-
ping. Globalization of demand was strong throughout the period after
the Second World War, and increasing international trade was the funda-
mental precondition behind the growth of the world fleet. The last
decades of the century also saw the globalization of supply.10 Increasing
international integration has given better access to capital and labour out-
side Norway’s borders. However, the degree to which shipowners have
been able to utilize foreign inputs has varied.
With regard to capital, access to foreign funding has in fact been
important since before the Second World War. The interwar growth in
the tanker market was partly financed by Danish, Swedish and British
yard credits, thus enabling an expansion that would have been impossible
if it had been drawn from Norwegian sources only. What was originally a
cyclical phenomenon—access to finance in order to secure shipyard activ-
ity during a downturn—ended up as a permanent phenomenon, a com-
petitive parameter for shipbuilders. In the post-war period 80 per cent
credit at generous terms became the norm for shipping companies that
wanted to buy new tonnage. The shipyards, helped financially by the
authorities, ensured much of the financing. Consequently, the expansion
of the fleet could to some extent occur independently of Norway’s own
10
Even though the tanker market crashed due to the oil shocks, globalization—in terms of increas-
ing international integration, in particular trade liberalization and growth—remained the order of
the day in most other markets.
284 S. Tenold
financial resources. Most of the costs of a new ship could be acquired

abroad, often with a long-term charter securing the income and consol-
ing the creditors. Second-priority mortgages could be arranged by
government-supported Norwegian institutions.
Due to other governments’ desire to build up or maintain capacity in
the shipbuilding industry, foreign loans financed much of the expansion
of Norwegian shipping. Foreign equity, on the other hand, has been lim-
ited by Norwegian law for much of the century. Even in the late 1980s,
shipping companies that wanted to increase their funds by opening up
share ownership to foreign interests had to issue non-voting B-shares. By
then, foreign funds were accepted, but not foreign influence. This was
soon to change.
In the last years of the 20th century, and particularly at the beginning
of the 21st century, there was a strong inflow of foreign equity into
Norwegian shipping. There were two main reasons for this. First, the
liberalization of international capital movements made it difficult, or in
some instances even illegal, to discriminate against foreign owners. The
Norwegian authorities were forced to open up the borders, and could no
longer reserve ownership and influence for Norwegians. Second, the
strong market position, the international character and the competitive
competence of Norwegian shipping companies made them particularly
attractive for mergers and takeovers. Foreign equity flowed into Norway
in search of profit, and Norwegian equity went abroad in search of the
same.11
The access to foreign investment capital (as opposed to foreign mort-
gages) was limited for most of the 20th century, before this regime
change. This corresponds very well with the situation for foreign labour.
For a long time, Norwegian shipping was based almost exclusively on
Norwegian personnel. During the labour shortages in the 1950s and
1960s, seafarers from other European countries played a part, and there
were also some foreign-crewed ships operating in local markets in Asia.
11
And sometimes Norwegian investors went abroad, only to return to the Norwegian market under
more tax-friendly foreign schemes. Klepsland (2011, 3) points out that before 2003 active foreign
ownership in stock exchange listed Norwegian shipping companies was related to acquisitions and
delisting, while the foreign ownership from 2003 to 2007 was characterized by “Norwegian tax
refugees.”
Still, the rule-of-thumb was Norwegian ship, Norwegian flag, Norwegian

seafarers—or European seafarers on Norwegian terms—well into the
1980s. The big shift came in 1987, when the establishment of the
Norwegian International Ship Register (NIS) lifted restrictions for ships
that operated outside Norwegian waters.
The Domestic Dimension: Liberalization

The establishment of the NIS is perhaps the best example of how the
domestic dimension has been characterized by significant liberalization of
the maritime-political regime. The increasing inflow of foreign equity
changed Norwegian shipping; access to inexpensive foreign labour saved
it. Norway’s transition to a high-wage country—where seafarers’ working
conditions improved immensely during the course of the century—was
incompatible with the relentless focus on costs in an industry with inter-
national competition. The liberalization of labour requirements was a
necessary condition for the “second wind” that pushed Norway’s ship-
ping industry forward in the last decades of the 20th century. Without
this measure, it is likely that many of the remaining Norwegian shipping
companies would have followed their Swedish neighbours into obscurity
and oblivion, and the establishment of new companies would have been
much lower.12
Despite this timely intervention by the Norwegian government, the
relationship between the shipping companies and the authorities has
been very complex. The design of the economic and political regime has
varied across time, and the effects on shipping company strategy and
profitability are difficult to disentangle. Many shipowners would claim
that the regulation of the industry, in particular in the period around
1950, was a serious encroachment on their free enterprise and had a det-
rimental effect on the expansion of their shipping activities. The detailed
regulation of business decisions such as contracting, operation and
financing has been referred to as a “straitjacket.”13
12
Lennerfors, Lindgren and Poulsen (2012).
13
Bakka (2017).
286 S. Tenold
At the same time, it is evident that the Norwegian authorities have also
given the shipping industry priority, due to its role as the most important
earner of foreign exchange. This has been evident with regard to explicitly
preferential measures—such as access to investment funds and generous
accounting and tax rules. There have also been periods—for instance in
the 1950s and 1960s—when the general economic policy favoured ship-
ping investments. Regulations such as double taxation—which made it
profitable to maintain capital within the company—and the low interest-
rate regime had a preserving character on the industrial structure. Access
to funds was easy for established companies, while it was difficult for
newcomers. And shipping was clearly an established industry.
The international character of shipping makes regulation, both pol-
icy design and policy implementation, particularly difficult. On the one
hand, it might be desirable to treat shipping in the same way as other
domestic sectors. This ideal of “industrial neutrality” implies that tax
rates, investment framework (for instance duties and depreciation
rates), access to capital and so on should be identical across all sectors of
the economy. The benefit would be that the country’s resources—at
least in theory—would be utilized efficiently, as they would be allocated
to those sectors that give the highest return, without any policy-induced
distortions.
Alternatively, it might be claimed that policies should be adapted to
the special features and needs of individual sectors, and also take into
account policy aims other than just “economic efficiency.” The support to
the agricultural sector in most industrialized countries—motivated by a
desire for self-sufficiency in food production, a heavy dose of nostalgia
and some very capable lobbying—is a case in point. When everyone else
is subsidizing, why can’t we? According to this view, policies towards the
shipping sector should, due to shipping’s mobile nature, be designed with
“competitive neutrality” in mind. How can we keep taxing our shipping
companies, when they can easily move their activities to a no-tax loca-
tion? Following this line of thought, the framework conditions should be
identical to those that the shipping industries in other countries are sub-
ject to.
Norwegian policy has vacillated between these two aims—between
industrial neutrality and competitive neutrality. Moreover, when the
shipping industry has been subject to “special treatment” this has been
both of the favourable and the unfavourable kind, with the changes often
abrupt and unexplained. As such, the influence of shipping policy has
been unpredictable. For instance, in the immediate post-war years, ship-
ping was given priority in the access to foreign exchange—the aim was to
resurrect the industry and its dominant position as a foreign-exchange
earner. When the revenues failed to materialize to the extent that had
been hoped for—mainly as a result of inferior tonnage and low freight
rates—the authorities introduced a ban on contracting abroad in 1949
and 1950.
Greek owners copied the timecharter-based financing that the
Norwegians had pioneered in the interwar period and “exploited the gap
created in the tanker market by the hitherto dominant Norwegians.”14
The gap in the market was the direct result of the political restrictions on
the ordering of new ships abroad. Norwegians had to say “no” to lucrative
tanker contracts and were unable to fully take advantage of the boom
during the Korean War. Preference was followed by prohibition. Go was
followed by stop.
Political measures such as the contracting ban had an immediate
and direct effect on Norwegian shipping companies and their com-
petitiveness. In the longer term, however, the indirect effects have
been more important. The overall policy regime, in addition to the
specific short-term measures, has influenced the business decisions of
shipping companies. One example is how the combination of tax pol-
icy and labour regulations, in a pincer-like movement, shaped the
“economies of scale”-based investment strategy in the 1960s. As a
result of this focus on large ships and the frequent fleet renewal, the
Norwegian share of the world fleet peaked around 10 per cent in the
late 1960s.
Until the crisis in the 1970s, shipping’s important role in the Norwegian
economy was sufficient to ensure its position in the Norwegian political
landscape. There was a joint understanding that the shipping industry
was left to its own devices. When the crisis threatened the viability of the
14
Harlaftis and Theotokas (2009, 20).
288 S. Tenold
sector, the policies changed “from benign neglect to government

intervention.”15 Two important political measures were introduced.
• First, the Guarantee Institute for Ships and Drilling Vessels (GI) was
established in 1975 to avoid ships being sold abroad due to bankrupt-
cies and creditor demands. It is not evident that the shipping compa-
nies were the main beneficiaries of the GI—the authorities had ulterior
motives, and the establishment was important both for shipyards and
the financial sector. The GI had the desired short-term effects—it suc-
ceeded in keeping tonnage in Norway—but in reality it only delayed
an inevitable decline in the fleet.
• The second political change had important long-term effects. As men-
tioned above, the introduction of the NIS ensured that the Norwegian
shipping companies could regain their competitiveness. With the
increasingly cut-throat competition in the shipping market, and with
freight rate levels too low to give investments in labour-saving ton-
nage, the only viable alternatives were sales to foreigners and transfers
to Flags of Convenience. The introduction of the NIS combined the
labour cost flexibility of the Flags of Convenience with a continued
“genuine link” to Norway. Moreover, by limiting the areas in which
the ships could trade, shipping along the coast remained a domain for
Norwegian seafarers.
Norway’s introduction of a second or open register was followed by

similar measures in other countries. It was both a response to and an ele-
ment in the liberalization of shipping at the international level. It was
another step in the constitution of shipping as the most global of indus-
tries. The liberalization of the shipping regime was not unique in a
domestic context either. Indeed, it should be seen in relation to the liber-
alization of the Norwegian economy and society in general. The impor-
tant thing is the end result, though: without deregulation, Norwegian
shipping would not have been able to maintain market shares and
profitability.
Nordvik (1997).
15
he Regional Dimension: Concentration

T
and Specialization
The regional dimension has seen Norwegian shipping develop from an
industry scattered all along the coast, to a higher degree of concentra-
tion, with Oslo and Bergen as the leading centres. There has also been
an evident concentration of other maritime activities in these two major
cities, although with some more isolated pockets of activity in other
places. The other development trend that has characterized the spatial
distribution of Norwegian shipping is specialization, the manner in
which a functional division of labour has developed among Norway’s
regions.
Norwegian shipping survived as an economic activity along the coast
far longer than in neighbouring countries such as Sweden and Denmark.
In Denmark, in particular, the shipping industry in the capital largely
overshadowed what was going on in other parts of the country.16 However,
the large reduction in the number of shipping companies as a result of the
shipping crisis sounded the death knell for a number of home ports along
the coast.
The increased concentration of Norwegian shipping was also reflected
in policy-making and political lobbying. Two developments in the 1980s
implied that the industry’s economic importance was no longer as self-
evident as it had previously been. First, shipping’s dominant role as a
foreign exchange earner had been dethroned by the petroleum sector.
Second, Norwegian sailors in the deep-sea fleet were replaced by foreign-
ers. As a result of the industry’s reduced standing, the Norwegian
Shipowners’ Association changed its strategy vis-à-vis the authorities. It
increasingly emphasized the crucial role that shipping companies played
as the hub of a “maritime cluster,” where other maritime businesses—
within finance, insurance, ship equipment, classification and so on—
were involved. The economic health of the shipping companies was
important for the strength of the cluster.
The development of the offshore oil industry brought some decentralization in Denmark as well,
16
with Esbjerg emerging as the most important harbour for the oil industry, and with offshore wind
power emerging as another important business area in the new millennium.
290 S. Tenold
With regard to the regional dimension, there have been two contrast-
ing ownership trends. On the one hand, we have seen an overall develop-
ment towards concentration: by the end of the 20th century around half
the fleet, measured by dead weight tonnage, was owned by shipping com-
panies in Oslo, and almost a quarter by Bergen-based shipping compa-
nies. On the other hand, in connection with the expansion of the offshore
petroleum industry, the related services have to a large extent been based
in the Stavanger region, as well as in a number of relatively small loca-
tions along the coast—villages and islands that had not usually featured
in the list of home ports for the Norwegian foreign-going fleet. In places
such as Austevoll, Bømlo and Fosnavåg—small communities with a fish-
ing, rather than a shipping tradition—resourceful owners entered the
supply shipping industry. In some cases they expanded by purchasing
second-hand ships from larger shipping companies that had decided to
exit the segment. The conditions in the North Sea are extremely rough,
and the companies were able to use the competence built up in Norwegian
waters to expand internationally.
In 1900 Norwegian shipping could be characterized as a relative uni-
form industry—with significant regional variations primarily along one
dimension: the extent to which the transformation from sail to steam
had progressed. There have been various degrees of specialization in dif-
ferent parts of Norway. Strategies based on new technology, new forms
of operation and specific market niches enabled Norwegian shipping
companies to carve out profitable niches. The different trajectories that
characterized the development of the various regions pay some testa-
ment to the idea of maritime clusters. These clusters could be based on
beneficial (or dangerous) follow-thy-neighbour groupthink, or on the
synergy effects of having a number of competitors within the same mar-
ket segment.
The specialization was evident in the case of Oslo and Bergen. In Oslo,
the activity was based on traditional bulk activities, with substantial play-
ers in the dry bulk and crude oil markets, as well as a number of diversi-
fied companies. Bergen, on the other hand, became the “industrial
shipping capital,” where long-term customer relations had built up
world-class niche companies. The city housed two of the world’s leading
chemical tanker operators, Odfjell and JO Tankers. It was also the origi-
nal home of the two companies that dominated the world market for
open-hatch bulk transport, Star Shipping and Gearbulk. They had a joint
market share of around 60 per cent, while Saga Forest Carriers, the third
largest operator, also had close links to Norway.
Gearbulk and Saga Forest Carriers are good illustrations of the
increased internationalization of Norwegian shipping. The entrepreneur
behind Gearbulk, Kristian Gerhard Jebsen, sold 40 per cent of the com-
pany to the Japanese Mitsui OSK Lines in 1990, and moved the opera-
tion of the company to the UK a few years later. He still had much
shipping activity in Bergen, and used his hometown as the basis for
investments in other segments. Saga Forest Carriers, on the other hand,
had originally grown out of a Norwegian pool based in the eastern part
of the country, but was in 1995 taken over by the Japanese company
Nippon Yushen Kaisha (NYK). The Japanese decided to maintain
accounting and management with the company Hesnes Shipping, a spe-
cialized shipbroker based near Tønsberg.
The concentration of the shipping industry at the geographical level
reflected the success—or lack of such—of shipping companies in various
Norwegian regions, as well as the relocation of companies. It might seem
paradoxical that parallel with the reduced cost of communication, ship-
ping companies tended to be located more closely together, and closer to
auxiliary services such as insurance and banking. In 1900—when com-
munication was difficult—they were spread all along the coast. A century
later—when communication was uncomplicated and the whole world
was just an e-mail or a phone-call away—they tended to be lumped
together in Oslo or Bergen.
usiness Development: Professionalization

B
and Innovation
The location paradox above may perhaps be explained by the manner in
which the competitive advantage has changed. As a result of technologi-
cal and regulatory developments, the amount of information available,
and the need for documentation, has become more plentiful. This has led
to a professionalization of Norwegian shipping. Separation of ownership
292 S. Tenold
and management and bureaucratic organizations with a functional divi-

sion of labour characterize the leading Norwegian shipping companies.
The competitive advantage has changed from local knowledge—in the
port—to centralized knowledge—at the company’s headquarters. It has
changed from personal competence—the captain and crew at sea and the
shipowner onshore—to organizational competence—the many divisions
of the shipping company, each with a specific role and designated tasks.
The days where Ragnar Moltzau could operate his own little tanker ship-
ping company from the corner of the office he shared with his employer
are over.17 Shipping today is characterized by vetting, governance and
compliance; by throughput, integrated logistics solutions, documenta-
tion and due diligence.
As communications improved, having excellent ship captains became
less of a competitive advantage, as more and more of the business deci-
sions were made at the company’s headquarters. However, this does not
imply that competence on the ship became irrelevant. Captains had to
organize work on board and in port as efficiently as possible, they had to
strike the right balance between overseer and officer. They still had impor-
tant knowledge about the crew, the ships and the ports. Moreover, cap-
tains often went onshore, temporarily or permanently, to work as building
supervisors or port captains, or to perform other important tasks.
Shipowners and shipping companies had to be able to optimize the
business model and choose the right strategies. They had to be able to
source cost-efficient inputs—ships, capital, labour—and to identify and
target the markets where they could make a profit. Again, we have to
remember that there was not one Norwegian strategy or policy, and many
shipping companies failed on both counts—high costs led to uncompeti-
tive production, and a focus on wrong markets led to low, or non-existent,
revenues.
One feature that ensured the competitiveness of Norwegian shipping
was innovation. This took place at two levels—technological and organi-
zational. The technological dimension refers to the manner in which
shipping companies managed to strengthen their competitive position by
means of investments that alleviated their comparative disadvantages.
See Fasting (1955).

17
Sometimes the owners played a key role in the development of the new
technologies, other times they imitated, and sometimes they failed to
invest—or refrained from investing—in the “winning” technologies.
In the post-war period, in particular, technological innovation enabled
Norwegian shipping companies to gain market shares and operate profit-
ably. The establishment and expansion of specialized shipping niches—
gas and chemical tankers, cruise ships, vehicle carriers, open-hatch bulk
ships—provided periods of substantial market power and large profits.
Moreover, when the dry and liquid bulk markets were characterized by a
structural crisis in the 1970s and 1980s, the niches were relatively
well-functioning.
Organizational innovation is an umbrella that covers various new ways
of “doing shipping”; operational innovation, institutional innovation,
financial innovation and so on It includes new ways of organizing the
companies—from regional part ownerships to stock exchange listed enti-
ties with owners from all over the world. It includes new types of business
relations—the long-term charters with the oil companies in the interwar
period naturally spring to mind. It includes new ways of raising capital—
the use of shipyard credits, limited partnerships and incomprehensible
financial instruments. It includes new ways of operation and manage-
ment—outsourcing of parts of the business, joint partnerships and coop-
eration in pools. And, importantly, organizational innovation includes
new ways of relating to the rest of the world—foreign seafarers, foreign
flags, foreign investors, foreign partners. One of the defining develop-
ment trends in shipping is the manner in which resources can be sourced
where they are most cost-efficient. This implies that the Norwegian
dimension becomes obscured, as more and more transactions have a for-
eign base and large parts of the business can be outsourced.
The manner in which shipping companies managed to deal with these
two parameters—professionalization and innovation—was important in
determining whether they became successes or failures. The transforma-
tion of Norwegian shipping in the 20th century saw a massive turnover
in the agents of the industry. At the company level, survival was the
exception, not the rule. At the same time, when we look at Norwegian
shipping in general, the industry has shown exceptional resilience. Even
today, we find a two-digit number of companies that have been involved
294 S. Tenold
in shipping for a century or more. However, the majority of the compa-

nies have a much shorter history. Some have been established on the
ruins of failed companies, others have seen new opportunities. Some will
remain competitive, others will fail.
Still a Shipping Nation?

Norwegian shipping companies gained their leading position in shipping
by chasing international demand all over the world in the second half of
the 19th century. They have maintained their leading position by utiliz-
ing international supply—global factors of production—in the last part
of the 20th century. With most of the employment and parts of the own-
ership and management located elsewhere, is Norway still a shipping
nation? Are Norwegians still shipowners?
In order to answer this question, it may be useful to draw a parallel to
another old industry—farming. Previously, the farmer and his family
often did “everything” themselves; worked in the field, tended the ani-
mals in the barn and sold their produce at the local market. Gradually, as
technology and infrastructure improved, farm sizes increased, farmers
specialized and machines and hired hands took over much of the manual
work. Many of the farmers today are managers and administrators—
some do not even have dirt on their boots. They may spend most of the
day indoors, shifting papers around. But they still own and develop their
main asset—the farm—and make the decisions that ultimately decide
whether this business is viable or not. It is very clear, that “the old way”
would not be a viable manner in which to conduct farming business.18
The business of Norwegian shipping companies is much the same.
More than a century ago, time ran out for the old part ownership, with a
strong community foundation and a base of local labour and capital.
18
Some farmers might today receive a higher price for growing in an old-fashioned manner, selling
the produce with a “bio-dynamic” or “organic” premium, while others supplement their incomes
by farm visits. Although such ventures might be profitable on an individual basis, for the sector as
a whole, this is not a viable strategy. The shipping equivalent would be the larger sailing ships offer-
ing shorter voyages to a moneyed clientele that wants to experience a pleasurable and sugar-coated
version of the days of the windjammers.
Gradually, more and more of the inputs were acquired further and fur-
ther away from home. The local inputs became national, then the national
inputs became international. Still, the core of the business—the decisions
that give profits or losses—and a substantial part of the ownership
remains within Norway. There is also an infrastructure—for financing,
insurance, broking and so on—which supports these decisions, and
which also has a strong local component.
In the 20th century the Norwegian shipping industry—seafarers,
investors, managers—experienced enormous amounts of drama and
change. Both world wars presented challenges, even though the status of
the fleet was very different. Norwegian shipping companies grasped new
opportunities in the interwar period and during the post-war boom.
They had to fight to remain floating during the shipping crisis of the
1970s and 1980s. The introduction of the NIS, fortuitously coinciding
with the rebound of the market, gave them a fresh start. Throughout the
century, everyone working for Norwegian shipping has been tested again
and again.
Consequently, the actual development provides us with a real-world
evaluation of how well they succeeded. The grade transcript clearly shows
that Norwegian shipping passed, and passed with honours. For the ship-
ping industry as a whole, there must have been more successes than fail-
ures. Without a steady influx of successful newcomers that could replace
the ones that were punished by the market forces for their bad decisions,
the industry would have disappeared—like it did in so many other
European countries. Norway started and finished the 20th century as one
of the world’s leading shipping nations, though the basis for the position
had changed tremendously.
Early 21st Century Blues: Taxing Times

Norwegian shipping companies owned between 4 and 5 per cent of the
world fleet at the start of the 20th century and more than 8 per cent at
the end of it. Along the way, the share varied substantially: it was particu-
larly low after the two world wars, and peaked at around 10 per cent in
the late 1960s. In the first half of the 1980s, the fleet appeared to be
296 S. Tenold
isappearing, before an improving market and domestic institutional

d
innovation enabled an impressive rebound.
The fleet’s development during the 20th century was far more positive
than what its most important competitors experienced. The dominant
shipping nation in 1900—the UK—fell from around half of the world
fleet to less than 3 per cent, Germany saw its 9 per cent share more than
halved, while the United States fell from more than 8 to less than 6 per
cent.19 Norway had apparently escaped the loss of competitiveness that
had befallen its main competitors.
However, if we update the end point, the picture is not as clear. If we
terminate the analysis in 2017, rather than at the end of the 20th century,
the Norwegian success story becomes less convincing, it is less of a success
story. By 2017 Norway had fallen from third to ninth place on the list of
the world’s leading ship-owning nations. The proportion of the world
fleet had fallen from more than 8 to around 2.8 per cent. In other words,
over this brief period—less than two decades—the Norwegian market
share declined more than Germany’s had done throughout the 20th
century.
One of the reasons for the decline was the fact that some of the largest
and most successful shipping companies were taken over by foreigners.
The national consolidation processes in the 1990s were just the first step.
These were then engulfed by an international wave of mergers and acqui-
sitions. In many instances the Norwegian shipping companies were
attractive targets. Sig. Bergesen dy had taken over the fleets of two other
companies to become one of the leading international companies in the
gas carrier market, and also had a substantial tanker fleet. In 2003 the
company—whose fleet amounted to more than 10 million dead weight
tons, making up slightly more than 20 per cent of the Norwegian fleet—
was sold to Hong Kong interests. Although some parts of the operation
continued from Norway, the jewel in the crown was gone.
The first years of the new millennium were characterized by sales of
tonnage abroad. In contrast to the sales in the 1980s, the ships were not
sold because the companies had problems. The ships and the companies
Confer Tables 2.1 and 9.1 for details on the data. Percentages measured as share of effective ton-
19
nage in 1900 and dead weight tonnage in 2001.

were sold because they were attractive to foreign investors. This period
was also marked by substantial turbulence among the companies that
remained, in particular in their relationship with the authorities. The
basis for the animosity was a well-known topic: tax.
The dogfight about tax marked a low point in the relationship between
the authorities and the shipping companies—mistrust of a kind that had
not been seen since the restrictions on foreign contracting in the late
1940s and early 1950s. The basis was the transfer to a tonnage tax regime
in line with most European Union countries. In principle, the introduc-
tion of a beneficial tax system should have been welcomed by Norwegian
shipowners. However, they believed that they already operated in a
benign tax regime, and had done so since the last major reform, in 1996.
They were wrong. The small print revealed that the 1996 system only
deferred tax payments, it did not abolish them. In 2005 the government
revealed how it would “harmonize” the tax system with other European
countries; this would be done by introducing a new tonnage tax regime.
Somewhat surprisingly, those companies that wanted to be included in
the new regime had to pay the accrued (and deferred) taxes for all the
years after 1996.
The tax bill was enormous—NOK 21 billion, of which two-thirds
should be paid and one-third could be “written off” in exchange for envi-
ronmentally friendly investments. The retrospective taxation also had
some truly bizarre effects. In 2007—one of the best years ever for ship-
ping, when an iron- and coal-hungry China drove up bulk rates—many
Norwegian shipping companies reported enormous after-tax losses. Two
years later, part of the tax payments was reversed following a Supreme
Court decision that ruled out the claim for backdated taxes. In a shipping
market that had gone from red hot to decidedly chilly, Norwegian ship-
ping companies could post quite impressive results.20
It was not only the relationship with the Norwegian authorities that
was strained. In addition to the trouble on the home front, a number of
20
An example is Bergen-based Kristian Gerhard Jebsen Skipsrederi AS, which in 2007, when the
latent payment was activated, paid a tax bill of more than USD200 million. When added to finan-
cial costs, this turned an operating surplus of USD211 million into a deficit. In 2009, the repatria-
tion of USD120 million, following the Supreme Court ruling, gave the company one of its best
results ever in a generally dismal year; see Tenold (2015, 298–299).
298 S. Tenold
shipping companies ended up in trouble abroad. One of the Norwegian

success stories of the late 20th century was how companies had managed
to build up dominant positions in niche markets. Now some of these
companies were targeted by the competition authorities and accused of
anticompetitive practices.
In a series of dawn raids in February 2003, the competition authori-
ties, in cooperation with the EFTA Surveillance Authority, visited the
offices of the world’s leading chemical tanker operators. The Bergen ship-
ping companies Odfjell ASA and JO Tankers were among four compa-
nies that were in trouble with the US competition authorities. Accused of
colluding to keep freight rates high in the chemical tanker market, the
companies agreed to pay substantial settlements to the US authorities
and major customers. Stolt-Nielsen, another company with Norwegian
roots, was given an amnesty in the case, claiming “whistle-blower” status.
Still, for the involved companies the total costs, including legal fees,
amounted to hundreds of millions of dollars.
Around 10 years later there were new raids. In September 2012, the
European competition authorities, working together with colleagues in
Japan and the United States, raided the offices of several car carrier com-
panies. The companies, including Wallenius Wilhelmsen Logistics and
EUKOR, subsidiaries of Wilh. Wilhelmsen ASA, were accused of keep-
ing rates in their segment artificially high. So far, the companies have
paid penalties for price-fixing, bid-rigging or related practices in, among
other countries, Japan, China, the United States, Korea and the European
Union.21
The two cases above show that Norwegian shipping companies still
played an important role in the international market, although the
declining Norwegian share of the world fleet in the period 2000–2017
reveals a substantially reduced position in the world fleet per se. There are
primarily three factors that can explain the decline, and all of these sug-
gest that the notion of a much weakened Norwegian shipping industry
should be nuanced.
The first is the aforementioned sales of all or part of Norwegian ship-
ping companies to foreign owners. In many instances important activities
Wallenius Wilhelmsen, Annual Report, various issues.

21
remained in Norway, even though the ownership changed. In other cases

there were substantial underreported Norwegian ownership interests in
companies abroad. Due to the difficulties of determining the “national-
ity” of ships and shipping companies, the statistics leave a lot to be
desired. There is no doubt that there was a reduction in Norwegian own-
ership as companies were sold out. However, the statistics tend to overes-
timate the effects. The more than two percentage points decline in the
Norwegian share from 2003 to 2005 was to a large extent related to the
fact that the Bergesen group and Navion were sold to foreign interests.
However, activity at the companies’ headquarters in Oslo and Stavanger
was practically unchanged in the short term.
The second reason that the decline has to be nuanced is the manner in
which the world fleet increased. After 2000 the world fleet has gone
through its most rapid growth period ever, while the size of the Norwegian
fleet has practically been standing still—hence the reduced share.
However, a large proportion of the new tonnage was relatively simple
vessels. In particular, in the period 2005–2010 there was a flood of bulk
carriers built to satisfy China’s almost insatiable appetite for iron ore.
Although some Norwegian shipping companies were involved in this
expansion, the main investors were found elsewhere.
The difference to the boom at the beginning of the 1970s is striking.
In 1974, Norwegian shipping companies owned around 9 per cent of the
world fleet, but held almost 13.5 per cent of the newbuilding orders.22
Thirty years later, they owned around 5 per cent of the world fleet, but
were responsible for only 3 per cent of the new orders.23 This was partly
a reflection of the fact that Norwegians refrained from investing in ships
that weigh heavy in tonnage terms—the simple large tankers and dry
bulk carriers—but continued to buy ships that were technologically
advanced and had a high value per ton.
This brings us to the final reason, where the price per ton is taken to
the extreme: the Norwegian investments in offshore. In the year 2000,
the offshore vessels made up the most valuable part of the Norwegian
fleet, and these hardly count at all if the market share is calculated on the
22
Calculated on the basis of Fearnley & Egers Chartering Co, Review 1974.
23
300 S. Tenold
basis of gross tonnage or dead weight tonnage. The declining Norwegian

share of the world fleet at the beginning of the 21st century is a continu-
ation of the trend that characterized the last part of the 20th century. As
we saw in the last chapter, this echoes the apparent stagnation in the
Norwegian fleet at the end of the 19th century. When we take into
account the properties of the tonnage—a shift from sail to steam, or from
large simple ships to small specialized vessels—the stagnation becomes a
statistical artefact, not reflecting the realities.
If we consider the value of the fleet, rather than tonnage figures,
Norway was sixth in the world in 2015, even at a time when the value of
offshore vessels was depressed. Although there had been little or no
growth in tonnage terms, the value of the Norwegian fleet had more than
doubled after the year 2000. Still, with the rapid growth of the world
fleet, this doubling of the value was insufficient to maintain the interna-
tional share. However, the relative decline in value was much less dra-
matic than the decline in tonnage terms.
The transformation of the activities is reflected in the fact that Norway
owned 16 per cent of the world offshore fleet, by value, substantially
more than for most other segments. In a recent report, the Norwegian
Shipowners’ Association excludes the three largest tonnage groups—dry
bulk vessels, tankers and container ships. By focusing on the advanced
part of the world merchant marine, Norway in fact comes out on top,
owning the world’s most valuable fleet.24 In 2013–2014 offshore vessels
made up almost half of the value of this fleet.
A similar shift towards offshore is evident if we look at employment in
the Norwegian maritime sector. From 2004 to 2014, the traditional ship-
ping companies, those involved in deep-sea shipping, had a reduction in
the number of employees of more than 4000. This was a result of the
movement of companies and functions abroad. Some of the foreign
interests that had bought Norwegian companies relocated all or part of
their activities. Moreover, many Norwegian-owned companies also began
a process where operations, management, technical services and so on
were outsourced internationally. The offshore shipping companies, on
24
Norges Rederiforbund (2015, 8). Creative ways of counting are something of a Norwegian
specialty.
the other hand, increased the number of employees by more than 8000,
giving a net increase in the number of persons employed in shipping
companies.25
The development in the first decades of the 21st century has also seen
regional displacement. Activities in the two main shipping centres have
developed very differently; “while traditional shipping has gradually been
built down, moved out or changed in a financial direction in Oslo, Bergen
has been able to maintain its position as a shipping city.” By 2015 the
tonnage registered in Bergen made up more than 40 per cent of the
Norwegian fleet, and the city’s fleet was more than one-third larger than
the Oslo fleet. Expansion in old companies and a set of active newcomers
in Bergen, combined with a decline in the fleet registered in the capital,
can explain why the two have traded places at the top of Norwegian ship-
ping in the first decades of the 20th century.26 Moreover, overinvestment
in the offshore sector, followed by a rate drop and a dramatic decline in
the value of the vessels, created a need for restructuring. This consolida-
tion process has increased the concentration in that part of the shipping
industry, both company- and location-wise.
Is There a Future for Norwegian Shipping

in the 21st Century?
People in northern Europe are known for having a relatively worried atti-
tude to life; the glass is usually half empty, seldom half full. In Norway,
the question of “How can we make a living when the oil in the North Sea
runs out?” has preoccupied the population and the authorities for decades.
Two insights from the analysis in this book might provide some help in
answering this question.
First, by adapting strategies and policies, it is possible to remain com-
petitive in an international market, even for a country with a high income
level. Shipping did this for most of the 20th century, changing investment
25
Menon (2017, 11).
26
Menon (2017, 86).
302 S. Tenold
strategies and the regulatory framework to be able to utilize competitive

advantages.
The offshore oil exploration in the North Sea has enabled the accumu-
lation of a vast body of competence, and this can be employed elsewhere.
The export of offshore services has already begun on a large scale.
Norwegian companies operating offshore vessels get around 60 per cent
of their revenue from ships working outside the Norwegian sector, and
40 per cent from Norwegian waters.27
The manner in which the offshore industry became internationalized
had much in common with the manner in which Norwegian shipping
grabbed global market share in the 19th century. It built up skills in a
relatively protected home market, before venturing out to compete on
the world stage. Norwegian shipping showed that it was possible to
become a leading maritime nation without a big home market.
Consequently, Norwegian oil industry participants—including the many
companies involved in maritime activities—can do the same when activ-
ity in the North Sea is reduced.28
Moreover, there is another similarity between the current offshore
expansion and the shipping expansion after 1850. To a large extent, the
activities are embedded in local communities, where the ship is built at
local yards and much of the technology is provided by local producers. At
the end of the 19th century, the shipbuilding industry in Norway encoun-
tered severe problems, as it was “stuck” in an old technological para-
digm—wooden sailing ships—when steam and steel took over. Today,
the Norwegian offshore yards are at the technological frontier. They have
a leading position, both when it comes to the vessels that are manufac-
tured and the manner in which they are built.
The second insight from the analysis is also related to the competitive-
ness of Norwegian shipping. Even before oil was found, Norway had a
high standard of living and relatively balanced external economic rela-
tions. More than any other sector, shipping played a crucial role in this
respect, neutralizing the deficit on the balance of trade. At the same time,
27
Norges Rederiforbund (2015, 4).
28
Of course, given what we know about climate and the environment, the long-term viability of a
business model centred around petroleum exploration, even when freed from the limited Norwegian
resources, can be debated.
the manner in which Norway remained competitive, gradually eroded

the country’s advantages. Norwegian shipping maintained a large share
of the international market for seaborne transport by becoming less
Norwegian.
Foreign demand had been the main basis of Norwegian shipping ever
since the late 19th century. Financing from abroad was important for
much of the 20th century, but in the last decades two additional “inter-
national” elements were added. First, Norwegian deep-sea seafarers were
replaced by foreigners. Second, foreign companies bought up Norwegian
companies, both the hardware—the ships—and the software—the
knowledge.
Due to the international character of shipping, Norwegian companies
argue that they need “a level playing field”—that the rules of the game
should be identical to their competitors. The result has been a beneficial
tax regime, an international ship register, competitive labour conditions
and so on. However, as the conditions become more equal, it becomes
much more difficult to build national distinction, much more difficult to
stand out. Current shipping industry buzzwords such as “digitalization”
and “big data” will most likely contribute further to this trend.
When every shipping company has access to the same information,
which competitive parameters can the Norwegian shipping industry rely
on? When labour and capital is drawn from a global pool, why should it
choose Norwegian ships and Norwegian companies? When registration
costs and tax conditions are practically identical in most countries, why
choose Norway?
We can go back to the beginning of this chapter, where we repeated the
question about Norwegian shipping, about its role and about its basis.
We can then “fast forward” the question 100 years. The reformulated
problem is then: “Which factors—specific to Norway, either alone or in
combination—can ensure that the country maintains a leading role in
international shipping in the 21st century?”
Although it is impossible to answer this question, it might be worth
trying to identify some of the critical issues. Three factors make Norway
stand out in an international perspective, even in the “practically all
things equal” world of shipping. First, the country has a broad and high-
skilled maritime milieu, and sea-related activities make up a very large
304 S. Tenold
share of the economy. Second, Norway has long maritime traditions, and
there is still a maritime identity and awareness that is lacking in many
other countries. Third, Norway is a high-income economy, but one with
an egalitarian culture and a compressed wage structure.
The first Norwegian advantage is the broad maritime milieu. The ship-
ping companies have been at the centre of a business cluster that included
shipbuilders and manufacturers of maritime equipment, in addition to a
wide range of service industries—shipbrokers, classification agencies,
naval architects, insurance companies and banks. Gradually, the frontiers
of this cluster have become fuzzier.
Just like when the term “shipping policy” was replaced by “maritime
policy” in the 1990s, the maritime dimension keeps growing. The
Ministry of Trade, Industry and Fisheries in 2015 launched a compre-
hensive maritime strategy, where it uses the term “the ocean-based
industries.”29 In the government’s new strategy, the term refers to the oil
and gas industry, the maritime industry (including ships and other float-
ing units), as well as the seafood industry. In 2017, the Ministry of Trade,
Industry and Fisheries and the Ministry of Petroleum and Energy jointly
launched an “ocean strategy” [havstrategi], an initiative given the heading
“New growth, proud history.”30
Government policies can lay the foundation for success or failure, but
they cannot determine the result. Luckily, the Norwegian maritime
milieu is much more than political decisions. Norway’s coastline is still
among the longest in the world, and around 80 per cent of the Norwegian
population lives less than 10 kilometres from the sea. The Norwegian
area at sea is six times larger than the country itself. Norwegian businesses
continue to look for ways to profit from the sea, and the ocean-based
industries make up more than 70 per cent of Norwegian export revenues,
29
Norway, Ministry of Trade, Industry and Fisheries, 2015, Maritime muligheter – blå vekst for
grønn fremtid.
30
A report published in 2016—“Norway – the ocean nation”—starts off with an bold claim:
“Norway is the leading ocean nation in the world”; Norges Rederiforbund et al. (2016, 3). The
government’s new maritime strategy is more modest; “Norway is one of the leading ocean nations
in the world”; Norway, Ministry of Trade, Industry and Fisheries/Ministry of Petroleum and
Energy, 2017, Ny vekst. Stolt historie, 6. It is worth noting that the report “Norway – the ocean
nation” is a joint publication by the Norwegian Shipowners’ Association and four other industry
associations, covering manufacturing, petroleum, fish farming and fishing.
37 per cent of the private sector’s Gross Domestic Product and 14 per
cent of private sector employment.31
In other words, the sea has a larger presence—in daily life and in the
economy—than in most other countries. This geographic advantage is
unlikely to change in the 21st century.
The second advantage is the maritime traditions and heritage, and the
manner in which the long history of Norwegian shipping shapes self-
perception and occupational and investment choices. It was this tradition
that created the maritime cluster, and it was this tradition that enabled
the building up of capital and competence. As suggested above, maritime
history is nowadays getting more intertwined with “maritime culture.”
Norway is the home of world-leading shipping companies and associ-
ated businesses. These are seen as interesting places to work, and thus
manage to attract qualified people that in other countries would have
preferred other sectors. Moreover, the existence of a maritime infrastruc-
ture—practical and theoretical education, research, networks and so
on—facilitates recruitment to the shipping sector.
The maritime heritage and culture is not static. So far, the critical mass
of the shipping companies and their partners has been sufficient for the
shipping sector to regenerate itself.32 Moreover, the manner in which the
various “ocean industries” have started to cooperate can be seen as a
means to ensuring that a critical mass is maintained. It is also a way of
increasing the value added. Given the development of traditional deep-
sea shipping, where countries have competed to attract activity, many of
the mechanisms that gave economic benefits in the 20th century have
disappeared or been reduced. Among these are both the ability to extract
large tax revenues from shipping companies and the employment effect
of seafarers in the deep-sea fleet. The land-based activities are therefore
increasingly important, and it would be beneficial if these could be linked
to other ocean-based industries to ensure critical mass.
However, one part of maritime culture is eroding: the number of peo-
ple with actual experience of the sea is declining rapidly. The shipping
31
Norway, Ministry of Trade, Industry and Fisheries/Ministry of Petroleum and Energy, 2017, Ny
vekst. Stolt historie, 6.
32
This is one of the main points in Norman (2012).
306 S. Tenold
companies and the authorities have tried to introduce measures that can
alleviate this—recruitment drives, cadet positions, compensation for the
use of Norwegian seafarers and tax breaks. Norway prides itself on its
maritime competence, and this competence has traditionally been trans-
ferred from the sea to the shore. When Norwegian shipping built up its
international position, the captains that went ashore and started their
own companies were crucial. In the post-war period, seafarers came
ashore with skills and knowledge that made them valuable assets in the
daily operation of the business. They became managers, port captains,
supervisors, surveyors and consultants.
Today, the on-board competence—in a purely Norwegian setting—is
disappearing. By far the highest proportion of those working on the NIS
vessels are foreigners. Most shipping companies have outsourced the
employment of seafarers to management companies abroad. We do not
know how this will affect the future of the industry, but it is unlikely to
have a positive impact. Employment in Norwegian waters goes some way
towards alleviating the negative development, but even this part of the
business is “threatened” by foreign labour.
As a result of the rich maritime history, Norwegian companies and
individuals have a maritime identity and awareness that stands out in an
international perspective. This maritime culture is, however, the most
volatile and vulnerable of the three advantages.
In Chap. 2, we divided the cultural dimension into a “maritime cul-
ture” element and a “Norwegian culture” element. While the first of these
has changed quite a lot, in particular during the past decades, there are
still aspects of the “Norwegian culture” that differ from other countries.
Consequently, the third and final element that might make the country
competitive within shipping and other maritime industries is therefore
the specific “Norwegian culture.” Important aspects are egalitarianism,
gender equality and governance.
Norway continues to be relatively egalitarian, despite its strong wealth
and income growth. Egalitarianism is reflected in, among other things, a
compressed wage structure. Unskilled labour is relatively expensive and
highly educated labour is relatively cheap. The compressed wage structure
implies that Norwegian shipping, despite a high overall wage level, might
in fact have a competitive advantage when it comes to the price of
competence. When we adjust for productivity, the costs of using

Norwegian engineers, for instance, is not necessarily higher than in coun-
tries with a much lower general wage level.
The relatively low price of high-quality skills can be a competitive
advantage, not only for shipping companies, but also for many of the
auxiliary industries that are related to shipping. Banking, insurance,
marine equipment production and so on are all high competence and
high value-added industries. Moreover, Norway is at the international
forefront with regard to maritime research, with technological and opera-
tional innovations that spill over into business.
The egalitarian attitude is also reflected in questions of gender. Norway
and the other Nordic countries rank among the top three in the world on
indices that measure differences between men and women, such as the
Gender Inequality Index and the Global Gender Gap Index.33 Gender
equality can be an advantage for economic and business development—it
makes little sense to choose skills and competence from only half of the
population. Moreover, diversity is more likely to reduce groupthink.34 At
the same time, with regard to gender, Norwegian business is not as pro-
gressive as, for example, politics and education, despite policies such as
quotas at Board level in stock exchange listed companies. While 45 per
cent of the ministers in the Norwegian government are women—includ-
ing all of the three most important posts—only 5 per cent of the 100
largest companies listed on the Oslo Børs have female chief executive
officers.
The shipping sector is known for being particularly conservative—at
the international level it is 20 years behind other businesses, according to
one female insider.35 Still, this implies that there is scope for improvement,
and Norway has a shorter way to go than many other countries. In 2008
the Bergen shipowner Elisabeth Grieg became the first female President of
33
Nordic Council of Ministers (2017, 12).
34
Although most studies find no statistically significant effects of female participation on profits, a
recent analysis of more than 22,000 companies from more than 90 countries suggest that “the pres-
ence of women in corporate leadership positions may improve firm performance”; Noland, Moran
and Kotschwar (2016, 3).
35
Tradewinds, 14032018. Of the Fortune 500 companies, only 6 per cent are headed by women,
and “the inequality is even higher in shipping”; Tradewinds, 25012018.
308 S. Tenold
the Norwegian Shipowners’ Association, and she has taken an active stand
in promoting women in business. Today, there are several initiatives that
aim to encourage and support women who work in shipping, including
female-focused organizations and mentoring programmes.
The final cultural element that might make Norwegian maritime
industries competitive is governance and social capital. Efficient and
accountable politicians and bureaucrats, as well as the (relative) absence
of corruption, characterize Norwegian economy and business. The com-
bination of high social capital—trust, norms and networks—and good
governance has been used to explain the economic success of Norway and
the other Nordic countries.36 It can be used as a competitive advantage in
shipping and other maritime industries.
Finally: Summing Up
What are the lessons from the 20th century development? How can a
small country such as Norway remain competitive in the world’s most
global industry?
Norwegian shipping was competitive at the beginning of the 20th cen-
tury due to a favourable starting point. The combination of geography,
history and culture enabled the Norwegians to take advantage of the
strong growth of seaborne trade in the second half of the 19th century. In
other words, when the 20th century began, the Norwegian shipping
community had a head start.
Norwegian shipping remained competitive by becoming less Norwegian.
By embracing markets abroad, by attracting foreign capital, and by com-
bining domestic competence and technology with labour from low-cost
countries, the country’s shipping companies managed to hold on to mar-
ket shares and ensure profitability.
In a shipping world where the playing field has been levelled, and
national differences have almost been wiped out, perhaps Norwegian
shipping can maintain competitiveness by embracing the distinctively
Nordic Council of Ministers (2017, 14–17).

36
Norwegian elements again: a vast maritime sector, where shipping is

complemented by industries that harvest the resources of the ocean; a
national bias towards shipping and the sea; a compressed wage structure;
and an egalitarian society, with gender equality, good governance and
high social capital. Geography, history and culture.
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T. Lennerfors, H. Lindgren & R.T. Poulsen (2012) ‘The Two Declines of
Swedish Shipping’, in S. Tenold, M.J. Iversen & E. Lange (eds) Global
Shipping in Small Nations: Nordic Experiences after 1960 (Basingstoke:
Palgrave Macmillan) 100–128
Menon (2017) Maritim verdiskapningsbok 2017 (Oslo: Menon Business
Economics)
M. Noland, T. Moran & B. Kotschwar (2016) ‘Is Gender Diversity Profitable?
Evidence from a Global Survey’, Working Paper 16-3 (Washington DC:
Peterson Institute for International Economics)
Nordic Council of Ministers (2017) Is the Nordic region best in the world?
(Copenhagen: Nordic Council of Ministers)
310 S. Tenold
Norges Rederiforbund (2015) Norske offshorerederier – i krevende farvann (Oslo:

Norges Rederiforbund)
Norges Rederiforbund et al. (2016) Havnasjonen Norge (Oslo: Norges
Rederiforbund, Norsk Industri, Norsk olje og gass, Sjømat Norge, Norges
Fiskarlag)
V.D. Norman (2012) ‘A Future for Nordic Shipping?’ in S. Tenold, M.J. Iversen
& E. Lange (eds) Global Shipping in Small Nations: Nordic Experiences after
1960 (Basingstoke: Palgrave Macmillan) 202–214
H.W. Nordvik (1997) ‘From Benign Neglect to Active Intervention: Norwegian
Government Shipping Policies from the 1970s Shipping Crisis to the Present’,
unpublished manuscript (Bergen: Norwegian School of Economics and
Business Administration)
A.S. Svendsen (1976) Skipsfartskrisen (Bergen: Institute for Shipping Research)
S. Tenold (2015) Geared for Growth. Kristian Gerhard Jebsen and His Shipping
right holder.
Index1
A Americas, 24n5, 25, 27, 27n14,

Aalborg, 32, 32n23 27n16, 28, 67n14
Aasgaardstrand, 83 Amsterdam, 159, 183, 271
Abrahamsen, Egil, 236 Amundsen, Roald, 75n46,
Admiral Raeder, 138n12 125n79–81
Aframax, 268 Andersen, Håkon With, 109
Africa/African, 28, 116, 124, 240, Anglo-Saxon Petroleum Co., 101
241, 260 Antarctica, 124n77
Agder, 11, 12 Antwerp, 159, 170
Aker group, 212, 213, 213n26, 248, Apartheid, 237
249, 251 Arabian Gulf, 204
Aker H-3, 251 Archangel, 126
Akershus, 13n13 Arctic Ocean, 72
Allied supply lines, 64 Arendal, 14, 35, 38n37, 113,
Altmark, 138, 139 113n57
The American Committee for Flags Argentina, 23, 32n23, 94n5
of Necessity, 231 Armistice Day, 126
Note: Page numbers followed by ‘n’ refer to notes.

1

Economics, https://doi.org/10.1007/978-3-319-95639-8
312 Index
Asia/Asian, 3, 123n76, 124, 199, 78, 82, 83, 107, 108n37, 113,
240, 260, 260n2, 261, 267, 115, 115n58, 115n60, 116,
281, 284 120, 123n74, 126, 139, 142,
“Asian-clause” ships, 240 176, 182, 186, 189, 214, 222,
Asian crews, 240 224, 231, 232, 238, 243, 245,
AS Pelican Co. KS, 249 251, 263–265, 263n7,
Asra, 64 272n24, 289–291, 301, 307
AS Reidar, 92 Bergen Bank, 246
Association of Cotton Factories, 71 Bergen Bar, 160, 254
AS Syracuse Oils Norge, 249 Bergen Radio, 139
Athens, 104 Bergensfjord, 152
Atlantic, 5, 92, 116, 211 Bergens Stuertforening, 106
Austevoll, 265, 290 Bergesen, Sigval, 222, 299
Australia/Australian, 23, 24n5, 24n6, Bermuda, 245
25, 28, 66, 66n12, 72n27, 84, Besseggen, 221
110, 116, 161n5, 197n5, 260 Biørn Biørnstad & Co., 213
Average age, 102, 108, 108n40, 206 Bjørnstad and Brækhus, 83, 84
Average tanker size, 206, 207n18 Black Sea, 104n27, 124
Azores, 110 Blücher, 139
Blue Riband, 5
Bolsheviks, 97n15
B Bona shipholding, 268
Bahamas, 226, 267 Boom, 15, 57, 68, 80–86, 95, 97,
Bahia, 31 123n76, 150, 151, 188, 196,
Bakka, Dag, Jr., vii, 116, 244 204, 205, 209, 216, 251, 287,
Bakkevig, Einar, 222 295, 299
Balance of trade, 148, 231, 269, 302 Bordeaux, 64
Balholm, 66 The Bore War, 136
Bang, Johan, 110 Borgny Dolphin, 251
Bank of England, 143 Bratsberg, 13n13
Barry, 123 Brazil/Brazilian, 23, 51n82
Belen Quezada, 104 Bremerhaven, 172
Belgium/Belgian, 23, 27n14, 65, British America, 22n3, 32, 144
65n7, 66, 94n5, 124n77, British Asia, 23
161n5, 197n5 British Australia, 22n3
Belize, 31 British blockade, 70
Bergen, 12–14, 13n13, 25, 34, British Isles, 78
34n26, 35, 37n32, 38n37, Broad Street, 83, 142–146
49n73, 55, 56, 66, 76, 76n48, Brofoss, Erik, 180n41, 182, 182n48
Index 313
Brooklyn, 91, 122, 123n74 Churchill, Winston, 134, 134n4,

Buenos Aires, 31 143
Bulkification, 171–175, 177, 221 Clyde, 31, 110
Bull-Gundersen, Gunnar, 134n2, CMA CGM, 171
159, 160n2, 190 Coastline, 34, 34n25, 65, 103, 104,
Business cycles, 57, 115, 121, 279 138, 304
Buskerud, 13n13 The Cold War, 163n7
Bygder, 17, 35 Communications technology, 16
Bømlo, 265, 290 Compensated tonnage, 41n47, 42,
Bør Børson Jr., 79n58 94n5
Competence, 15, 16, 40, 210, 220,
223, 224, 232, 246n34, 247,
C 248, 250, 252, 264, 271, 272,
C1-A general cargo ships, 148 278, 284, 290, 292, 302,
Cadiz, 31 305–308
Café Håpløs, 160, 254 Competitive advantages, 47, 49,
Café Måneskinn, 160 232, 291, 292, 302, 306–308
Café Solskinn, 160 Competitive neutrality, 286
Cape of Good Hope, 165, 204 Concentration of ownership, 214
Cape Palmas, 240 Concrete ships, 95
Capital mobilization, 243 Congress (US), 25, 45, 126
Capital sources, 182 Constanta, 124
Captains’ Associations, 106n32 Consuls, 36n31, 56, 69, 69n18
Captain shipowners, 55 Containerization, 171–175
Car carriers, 169, 218, 245, 298 Continental, 27n14, 32, 47, 252,
Cardiff, 31, 124n77 255, 275
Central America, 27n14 Continental Europe, 28, 34, 116
Centralization, 289n16 Contracts of affreightment, 176
Charters, 27, 27n15, 29, 47, 75, Cooperation, 46, 55, 73, 77, 125,
101, 112, 137, 145, 176, 199, 142, 143, 147, 176, 188, 189,
204, 210, 212, 218, 284, 293 220, 222, 251, 293, 298
Chemical tankers, 176, 189, 218, Copenhagen, 34n26, 38
221–223, 245, 290, 298 Corresponding owner, 11n10, 54
Chile, 23, 110 Council for Mutual Economic
China, 27n16, 32n23, 34n25, 126, Assistance, 163n7
260, 260n2, 261, 267, 281, Court Line, 218, 218n34
297–299 Covenants, 212
Christensen, Ivar An, 113 Crude oil transports, 202, 281
Christiania, see Oslo Cruise shipping, 105, 222, 226, 293
314 Index
Cruise vessels, 219, 278 Det Bergenske Dampskipselskap,

Culture, 33–49, 51, 93, 169n17, 120
207, 278, 304, 305, 308 Det norske Veritas, 112n52, 177,
Curacao, 124, 241n26 201n12, 236, 271
Currency regulation, 150 Deutschland, 5
Cyclicality, 204 Ditlev-Simonsen, Olav, 54, 55,
Cyprus, 268 55n93
Diversification, 208, 217, 218,
218n37, 243, 244, 246, 265
D Donations, 232n2
Danzig, 105n29 Dreyfus, 222
Dead weight tonnage (dwt), 55n93, Drilling rigs, 213, 217, 249, 251
75, 121, 122, 152, 168, Dry bulk goods, 174, 175, 281
186n58, 199, 202n14, 238, Dry bulk market, 202, 218n37, 293
263n7, 265, 290, 296, DS AS Vestlandet, 64, 79, 84
296n19, 300 Dusavik, 249
Dekke, Annanias, 42, 119n66 Dutch Republic, 34
Denmark/Danish, 15, 22, 23, 26, Dyvi, Jan-Erik, 222
27n14, 32n23, 33, 38, 39,
39n42, 47, 64, 70n21, 72, 75,
77, 80, 83n71, 84, 93, 112, E
124, 125, 125n81, 137, East Asia, 25, 164, 239
137n10, 140, 148, 161n5, East Asian Tigers, 266
197n5, 199n8, 233, 239, 242, The Eastern Bloc, 163n7
242n26, 267, 268, 277, 283, Eastern Mediterranean, 78
289, 289n16 The East Indies, 51, 166
Den Norske Afrika og Australia Economies of scale, 165, 168–171,
Linie, 116 185–188, 188n65, 204, 216,
Den Norske Amerikalinje, 116, 120, 220, 232, 252, 253, 281, 282,
121, 175 287
Den norske Krigsforsikring for Skib, Eden, Anthony, 134n4
136 EFTA Surveillance Authority, 298
Den norske sjøfarts historie, 18 Egalitarianism, 52, 306
Den oversjøiske eksportforening, 69 Egeland, John Oscar, 14, 94n5,
Den subvenerede Norsk-Spanske 96n10, 103n24, 147, 185n56
Linje, 116 Ekofisk, 249, 249n37, 252
Depreciation, 96, 210, 210n22, 272, Empire, 24, 27, 102, 103, 119, 231
286 Energy transports, 100
The Desert Shur, see Ørkenen Sur Engineers, 196, 253, 307
Index 315
En Sjøens Helt, 133 Fischer, Skip, vii, 279

Equality, 17, 52, 306, 307, 309 Fish exports, 70n21, 71, 76n47
Equity, 45, 84, 97, 113, 114, 179, Fjords, 33, 34n25, 35, 66, 200, 223
181, 188, 205, 212, 226, 243, Flag of Convenience, 38, 105,
282, 284, 285 105n29, 119, 231, 234, 235,
Eriksson, Gustaf, 110n47 237, 238, 266, 267, 288
Established companies, 15, 112, 220, Flagging out, 226, 234, 235
244, 245, 286 Fleet value, 29n17, 37, 204, 263,
EUKOR, 298 300
European Recovery Program, 164 Foreign currency, 148, 149
Europoort, 160 Foreign ownership, 268n14, 284n11
Evergreen, 171 Foreningen for skandinaviske
Export revenues, 2, 70, 99, 118, 149, sømandshjem i fremede havne,
304 123n75
Fosnavåg, 265, 290
Foundations, 36, 36n31, 45, 48, 49,
F 68, 103, 118, 155, 294, 304
Factors of production, 15, 187, 235, Foyn, Svend, 117
280, 294 France/French, 22, 23, 25, 27n14,
Farmers Party (Bondepartiet or 36, 65n5, 78, 92, 99, 115,
Senterpartiet), 151 136, 161n5, 163, 169n17,
Fearnley & Astrup, 249 197n3, 197n5, 233
Fearnley & Eger, 120, 165n10, Francia, 33
199n7, 201n13, 202, 202n14, Fred. Olsen, 80n60, 117, 120, 121,
203, 205n17, 242n28, 299n22 244, 249, 251
Fedje, 126 Fredriksen, John, 245, 268, 269
Fine art, 85 Fredrikshald, 110
Finland/Finnish, 23, 26, 27n14, 76, Freight rates, 56, 57, 68, 80, 81, 97,
111, 161n5, 184n55, 197n5 98, 137, 150, 165, 174, 199,
Finnmark, 117 204, 205, 215n29, 216–218,
Finnmarken, see Finnmark 247n36, 266, 283, 287, 288,
First era of globalization, 68, 86, 96, 298
261 Friis, Finn, 92
First World War, 7, 36n31, 37n33, Friis & Lund, 97n15, 126
42, 63–86, 94, 97, 99, 102, Frimann & Pedersen, 64
113, 114, 119n66, 120, 124, Fruit trade, 25, 25n8, 103, 103n24
125n79, 126, 136–138, 143, Furness Withy & Co., 74
155, 162, 182, 222, 262, 281 Furuseth, Andrew, 104
316 Index
G 71n22, 72n27, 73–75, 74n37,

G.M. Bryde, 116 76n48, 78, 80, 82n70, 100,
Gainsbourg, Serge, 169n17 101n19, 102, 103n25, 108,
Gas tankers, 169, 218 108n38, 111n49, 115,
Gas Traders Pool, 222 136–140, 137n10, 142–145,
Gearbulk, 220, 222, 291 150, 152–154, 163, 164n9,
Gender balance, 17 178, 200n11, 218, 233, 249,
General Agreement on Tariffs and 283
Trade, 164 The Great Depression, 93, 99, 124,
General Consul Storm, 69 161, 199, 281
Gentlemen’s agreement, 137 The great espionage affair (Bergen),
Geography, 33–48, 165n10, 275, 76
276, 308, 309 Great Lakes, 173
George, David Lloyd, 137 The Great Northern War, 37n32
Gerhardsen, Einar, 134n1 Greece/Greek, 9–11, 9n8, 22, 23,
Germany/German, 5, 21, 23, 24n6, 24n6, 27n14, 34n25, 36n30,
25, 26, 27n14, 34, 44, 63–80, 94n5, 103, 103n25, 104,
65n5, 66n10, 67n14, 70n21, 104n27, 137n10, 151,
71n22, 77n52, 84, 94n5, 99, 175n32, 200, 200n9, 211,
102–104, 103n25, 115, 127, 231, 233, 237, 246, 252, 266,
133, 135, 136, 137n10, 267, 287
138–141, 138n12, 143, Grieg, Elisabeth, 21n1, 222, 307
146n32, 161n5, 163, 186, Grieg, Nordahl, 21, 80
197n3, 197n5, 233, 242, Grimstad, 14n16, 110, 113n57, 245,
242n26, 267, 277, 296 263
Globalization, 4, 4n4, 9, 171, 262, Gross Domestic Product (GDP), 1,
279–285, 283n10 118, 161–163, 161n5, 197,
The Golden Age, 107, 159–190, 197n5, 198, 305
195–198, 204, 206, 207, Gross freight earnings, 27–29,
247n35 27n15, 29n17, 66n10, 80, 97,
Goole, 31 97n16, 98, 215n29, 247n36
Gotaas-Larsen, 222 Gross register tonnage (grt), 7n6,
Gothenburg, 112 29n17, 78, 137, 148, 168,
Governance, 292, 306, 308, 309 207n18, 215n29, 217n32,
Gran Canaria, 254 300
Great Britain/British, 8, 12, 21, 22, The Guarantee Institute, 211–213,
22n4, 24, 26, 27, 27n14, 252, 282, 288
27n16, 29, 32, 37, 38, 40, 44, Gutta på skauen, 277
47, 65n5, 66n10, 67–71, Götaverken, 112, 113
Index 317
H Høegh, Leif, 141n20, 147, 222, 268

Haakon VII, 116, 139, 141 Høyre (The Conservative Party), 236
Hague, 96
Ha Ha Bay, 32, 32n23
Halden, 110 I
Halifax, 31 Ibsen, Henrik, 14, 14n16
Hambro, Carl Joachim, 134n4 Ideal X, 172
Hambros Bank, 271 Ilboe, Fredrik W., 63, 63n1
Hamburg, 31, 51 India, 267
Hammar, Hugo, 112, 113 Indian Ocean, 240n22
Hanjin, 171, 173n27 Indonesia, 260n2
Hannevig, Christoffer, Jr., 82–85, Industrial cluster, 270
83n73, 96 Industrial neutrality, 286
Hans Broge, 64 Inflation, 70, 75, 80, 82, 98, 161n5,
Hanse, 34 164, 196, 197
Hansson, Herbjørn, 245, 246 Innovation, 16, 95, 166, 169–172,
Happy Giant, 265 174, 223, 279, 281, 291–294,
Hayek, Friedrich, 151 296
Hesnes Shipping, 291 Institute for Shipping Research, 232
Highway No. 1, 275 Insurance, 12n10, 16, 36, 46, 47,
Hinterland, 171 53, 77–81, 81n67, 84, 96,
History, 173n26, 175, 176, 232, 114, 136, 143, 145, 235,
249n37, 249n38, 272, 248, 270–272, 289, 291,
276–278, 277n3, 294, 295, 307
304–306, 308, 309 Insurance companies, 53, 269, 271,
Hodne, Fritz, 2n2, 44, 44n56 304
Hogmanay Agreement, 144 International Bank for
Hohenzollern, 66, 66n11, 67 Reconstruction and
Honduras, 105 Development, 164
Hong Kong, 123n76, 260, 261, 267, Internationalization, 237, 268, 291
272n24, 296 International Labour Organization
Hooverville, 122 (ILO), 105
Hubris, 209 International Monetary Fund, 164
Human Development Index, 1, 1n1 International solidarity, 238
Hungary/Hungarian, 23 The International Tanker Owners’
Hvor seiler vi?, 159, 189, 190 Association (Interntanko),
Hysing-Olsen, Ingolf, 142 124
318 Index
International trade, 5, 27, 34, 35, Kerguelen, 242n26

39, 50, 68, 93, 94, 99, 104, Keynes, John Maynard, 119
125, 166, 260, 261, 268, 283 Kiær, Anders Nikolai, 8, 22, 26, 29,
The International Transport Workers’ 50, 50n77
Federation, 237 King Midas, 83
Italy/Italian, 6, 22n3, 23, 24n5, King Olav V, 195
27n14, 78, 94n5, 111n49, Klaveness, A.F., 115, 120, 222
116, 139, 161n5, 197n3, Kloster, K.U., 81n65
197n5, 233, 242n26, 267 Kloster, R., 106n33
Klovland, Jan Tore, vii, viii, 32n20
Knowledge, 16, 25, 40, 54–56, 93,
J 102, 114, 138, 155, 176, 188,
Jahre, Anders, 119, 224, 245, 249 246, 270, 278, 281, 292, 303,
Jahre Viking, 265 306
Japan/Japanese, 3, 23, 24n6, 27n16, Knudsen, Gunnar, 14, 57, 57n98,
102–104, 103n22, 103n25, 66, 276
123n76, 126, 143, 163, 164, Knut Knutsen OAS, 120, 246
167, 174n30, 175, 184, Knutsen OAS
184n55, 197n3, 208, 233, Kommandittselskap, 246, 265
260, 260n2, 261, 267, 281, Korean War, 151, 287
291, 298 Kosmos, 119
Jarlsberg and Larvik, 13n13 Kriegsmarine, 138
Jebsen, Atle, 245 Krigsseiler, see War sailor
Jebsen, Kristian Gerhard, 220, 222, Kristiania, see Oslo
245, 291, 297n20 Kristianiafjord, 116
Jobbetid, 80–86, 82n70 Kristiansand, 109, 110, 113n57,
Johannessen, Peder, 110 265, 268
John Bowes, 173 Kronprinz Wilhelm, 5
JO Tankers, 290, 298 Krooboys, 240, 241
Journal of Political Economy, 8, Krupp, Count Gustav, 84
50n77, 209 KS AS Polaris, 249
KS 25/4 Norsk AS, 249–250
Kværner, 222
K
Kalmar Union, 39n42
Keilhau, Wilhelm, 76n48, 79, L
79n57, 81n67 Labour Party (Arbeiderpartiet), 149
Kent, 111 Labour-saving technologies, 232
Index 319
Laguna, 31 Local networks, 49

Land, Emery, 134n4 London, 29, 31, 32, 32n20, 49n73,
Larsen, Karin, 278 83, 104, 110, 119, 126, 135,
Larvik, 13n13 136, 137n11, 139–144, 159,
Lay up rates, 97, 121, 199, 208n20, 231, 237, 245, 268
216 London Cabinet, 142
Lay-ups, 97, 121, 122 Longevity, 213, 217
Lea, Erik Grant, 83, 85 Lorentzen, Hans Ludvig, 177
Leadenhall Street, 140 Lorentzen, Øyvind, 140, 142,
Legal infrastructure, 49 142n22, 177, 222
Leith, 123 Losses of lives, 65, 78, 133, 146,
Les Trente Glorieuses, 163 146n33, 154, 276
Levinson, Marc, 172n23, 173n26, Losses of ships, 73n32
196 Lowdness, Noel, 123n74
Liberalism, 56 Lund, Carl Otto, 92
Liberalization, 40, 41, 164, 165, Lusitania, 5
173, 226, 279, 283n10, Luxembourg, 65, 66
284–288 Læst, 34n26
Liberia, 10, 175, 208, 240, Løvlien, Emil, 150, 150–151n42
267 Låneinstituttet for skipsbyggeriene, 183
Liberty-ships, 148
Licensing, 137, 149n41, 150, 226
Lillesand, 14 M
Limited liability companies, 53, 54, Madagascar, 240n22
114, 181, 181n46, 246 Maddison, Angus, 161n5, 162,
Limited partnerships, 246, 265, 272, 197n5, 198
293 Maersk, 171
Liner conferences, 32, 120 Major dry bulk goods, 174
Liquid Natural Gas (LNG), 174, Malaysia, 260n2
221, 222 Mandal, 13n13
Liquid Petroleum Gas (LPG), 174, Manhattan, 143
222 Manufacturing, 3, 44, 56, 81n67,
Lister, 13n13 85, 99, 102, 148, 164–166,
Liverpool, 31 172n25, 174, 181n44, 190,
Llanelly, 32 213, 239, 261, 261n3, 281,
Lloyd’s, 7n6, 31, 31n19, 103n23, 304n30
143, 186n58, 207n18 Maranham, 31
Lloyd’s List, 26, 29, 31n19, 32, Margate, 111
32n20, 51n82 Mariehamn, 110n47
320 Index
Maritime centres, 263 Mowinckel, Johan Ludwig, 14, 78,

Maritime cluster, 11, 269–271, 289, 86, 276
290, 305 Multinational, 11, 16
Maritime culture, 48–55, 275, 277, Multi-ship companies, 114, 115
278, 305, 306 Mundogas Brasilia, 177
Maritimt Forum, 269 Museums, 36, 51, 52, 110n47, 232
Marseilles, 31, 110 Møre og Romsdal, 264
Marshall Aid, 164
Marshall Islands, 10
McLean, Macolm, 172 N
Mellanrikslagen, 39 Namibia, 237
Mexico, 27n14, 116 Nansen, Fridtjof, 75
Michelet, Jon, 133–135, 154, 155 Napoleonic Wars, 37
Michelsen, Christian, 14, 56, 276 Nash Creek, 32, 32n21
The Middle East, 195 National gallery, 85
Miller, Michael, 67 Naturalization levy, 43
Minde, 182 Navigation Laws, 40
Minimum value clause, 212 Navion, 268
Minister of Defense, 79n57, 155, Nazi Germany, 133, 134
155n53 Nedenes, 13n13
Minister of Shipping, 142 Net freight earnings, 215, 215n29,
The Ministry of Finance, 143, 183 247, 247n36
The Ministry of Petroleum and The Netherlands Antilles, 241n26
Energy, 304, 304n30 The Netherlands/Dutch, 11, 27n14,
The Ministry of Provisioning, 74, 36, 64, 72, 73, 75, 101, 124n77,
142n22 137, 159, 160n1, 161n5,
The Ministry of Trade, Industry and 197n5, 233, 241n26, 271
Fisheries, 304, 304n30 Neutrality, 38, 64, 65, 65n7, 74, 75,
Minor dry bulk goods, 174 77, 79n57, 133, 136–139, 272
Mister Angus, 84 New Brunswick, 32, 32n21
Mitsui OSK, 291 Newbuildings, 68, 72, 150, 151
Moltzau, Ragnar, 113, 292 Newport, 31, 123, 124n77
Moltzau’s Tankrederi, 113 Newport News, 124n77
Montreal, 268 New York, 31, 32, 51, 64, 83, 91,
Moorsom measuring system, 34n26 104, 110, 122, 141–143, 172,
Mortgages, 54, 112, 114, 182, 173n26, 268, 269
182n49, 183, 212, 266, 271, New York Stock Exchange, 245, 268
284 Niarchos, Stavros, 211
Index 321
Niches, 5, 10, 25, 116, 176, 219, The Norwegian International Ship
221, 222, 222n42, 259, 290, Register (NIS), 7n6, 8,
293, 298 234–244, 242n26, 247, 253,
Nippon Yushen Kaisha (NYK), 291 254, 265, 267, 269, 285, 288,
Noco, 249 295, 306
Nopal, 142 Norwegian Navy, 138
Norden (company), 268 The Norwegian Ordinary Register
Nordenfjeldske, 222 (NOR), 7n6, 238
Nordisk Skipsrederforening, 136 Norwegian Research Council, 200,
Nordland, 13n13 201n12
Nordre Bergenhus, 13n13 Norwegian Seamen’s Church, 122,
Nordre Trondhjem, 13n13 123, 160, 160n2
Norðvegr, 33 Norwegian Shipowner’s Association,
Norges Bank, 226 36n31
Norges Handels og Sjøfartstidende, The Norwegian Shipping and Trade
69, 69n18 Mission, see Nortraship
Norges Rederiforbund, 36n31, 147, Nydal, 79, 84
148, 236, 269, 270, 304n30 Næss, Erling Dekke, 119, 119n66,
Norsk Rikskringkasting, 133, 159 142, 144, 231, 232, 234,
Norsk Sjømannsforbund, 237 255
Norsk Skibshypothek AS, 182
Norsk Skibs Hypothekbank AS, 182
North America, 3, 27n14, 123, 124, O
173 Ocean Drilling & Exploration
North Atlantic, 5, 78, 260 (Odeco), 249
The North Sea, 40, 64, 65, 67, Oceania, 124n77
70–77, 138, 213, 224, Ocean Viking, 249
246n34, 247, 248, 250, 251, Odfjell, 189, 221, 222, 245, 251,
253, 263, 271, 290, 301, 302 290, 298
North Sea Declaration, 65, 65n5 Odfjell, Abraham, 245
North Sea oil, 204 Odfjell, Dan, 245
Nortraship, 133, 135, 139–145, Odfjell, Fredrik, 147
144n26, 149, 153, 154, 231 Offshore oil production, 198, 224,
The Nortraship-fund, 135 247
Nortraship’s secret fund, 152 Oil consumption, 200, 204
Norwegian Cruise Line, 222 Oil price increase, 198, 200, 201,
Norwegian culture, 49, 52, 306 203, 204, 206, 207, 218,
Norwegian government, 65, 126n83, 218n36, 281
133, 135, 136, 285, 307 Oil products, 202n14
322 Index
Oil tankers, 10, 100, 101, 103, 112, P

134, 165, 174n29, 177, 205, Pacific, 22n3, 25, 111n49, 172n25,
207n18, 218n36, 223, 225, 260
268, 281 Panama, 10, 104, 105, 148, 267
Onassis, Aristotle, 211 Panocean Anco, 222
OPEC, see Organization of Parcels, 167, 169, 174, 188, 188n65,
Petroleum Exporting 189
Countries Part ownerships, 11, 11–12n10, 45,
Open hatch bulk, 176, 220–223, 46, 53, 114, 181, 293, 294
291, 293 Partsrederi, 52
Operating costs, 28, 37, 205 Paspébiac, 32
Operation Weserübung, 139 Path dependence, 42, 180, 209
Orderbook, 206, 207n18 Pearl Harbor, 143
Organization for Economic Pensacola, 31, 51, 123
Cooperation and Pernambuco, 31, 51n82
Development (OECD), 7n6, Persian Gulf, 165, 225
184, 184n55, 197, 197n3, Philadelphia, 31
200, 233 Phillips Petroleum, 249
Organization for European The Phoney War, 136, 137
Economic Cooperation The Pillars of Society, 14
(OEEC), 184, 184n55 Piraeus, 36n30, 104, 200n9
Organization of Petroleum Exporting Poland/Polish, 139, 238
Countries (OPEC), 203 Politics, 5, 14, 70, 85, 269, 276,
Oslo, 12, 74, 79n57, 112, 112n51, 278, 307
113, 115, 119, 120, 139, Pommern, 110n47
182n49, 195, 214, 222, Pools, 16, 53, 123n74, 124, 170,
232, 237, 263, 263n7, 265, 176, 189, 220, 291, 293, 303
268, 268n14, 289–291, 299, Porter, Michael, 270
301 Port Glasgow, 110, 110n47
Oslofjord, 12, 13n13, 110, 117, Portugal/Portuguese, 23–25, 27n14,
139 111
Oslo Radio, 139 Prime Ministers, 14, 56, 57, 66, 86,
OSM, 272n24 134n1, 137, 144, 189, 236,
Ottoman Empire, 103 236n9, 276
Outflow of tonnage, 226, 235 “The Prince of Whales,” 119
Outsourcing, 101, 261, 281, 293 Privateering, 38
Overcapacity, 97, 98, 121, 199, 200, Pro-British bias, 66
232, 250 Procyclicality, 180
Index 323
Produktplakatet, 39 Risk, 46, 73, 77–80, 93, 134, 152,

Professionalization, 291–294 177, 183, 205, 205n15, 208,
Profits, 15, 28, 29n18, 46, 53, 77, 209, 218, 221, 235, 243
79–81, 82n70, 84, 85n81, 96, Romsdal, 13n13
98, 105, 118, 145, 153, 166, Roosevelt, Franklin D., 126, 134n4
171, 174, 179–182, 199, 204, Rotterdam, 159, 160, 170
205, 210, 218n34, 220, 224, Royal Caribbean Cruise Line, 222
241, 243, 246, 247, 272, Royal Navy (British), 139, 240n22
272n25, 282, 284, 292, 293, Royal Viking Line, 222
295, 304, 307n34 Rule, Britannia, 102n21
Progress Party (Fremskrittspartiet), Rumania, 23, 27n14
237 Rum Row, 92
Protection & Indemnity (P&I) Russia/Russian, 11, 11n9, 22n3, 23,
insurance, 271 26, 27n14, 34n25, 65n5,
Protectionism, 39, 94, 99 67n14, 85, 99, 111n49, 126,
Puerto Rico, 172 146n33, 267
The Russo-Japanese War, 57, 123n76
Ryggvik Helge, 249n37, 250,
Q 250n41
Quebec, 31, 123
S
R Saga Forest Carriers, 291
Rasmussen, A. H., 49n76, 268 Saga Petroleum, 249n39, 250
Rationalization, 161, 185, 238, 239, Sagatind, 91–93, 92n3, 97, 97n15,
253 126–127
Rederi, J.L. Mowinckels, 117, 120, Sagen, Tryggve, 83
220 Sailing ships, 7n6, 11–14, 11n9,
Regional concentration, 264 22n3, 25, 28–30, 29n18, 35,
Regional differences, 10–14, 222 43, 43n54, 48, 50, 54, 78n56,
Reksten, Hilmar, 119, 142, 211, 82, 94, 101, 109–111,
213, 224, 224–225n46, 225 110n46, 111n49, 114,
Republic of Korea, see South Korea 167n11, 171n22, 173, 263,
Requisition, 140 275, 294n18, 302
Rig ownership, 250, 251 Sailing vessels, 7n6, 10, 16, 17,
Rio de Janeiro (Ship), 139 25, 31n19, 47, 64, 108, 109,
Rio Grande, 31 224
Rio Janeiro, 31 Sailors’ gifts, 51
324 Index
Salaries, 144, 152, 180, 236, 236n9, Shanghai, 123, 123n76, 126
237, 253 Ship brokers, 36, 82, 207n18, 210,
Sandefjord, 113n57, 115, 117, 224 249n38, 291, 304
Savannah, 31 Shipbuilding, 14, 38n37, 44, 94, 95,
Scandinavia, 27, 27n14, 39n43, 64, 102, 124, 125, 164, 169, 177,
73, 83n71, 116, 125 183, 184, 199, 199n8, 203,
Scanpet, 250 261, 284, 302
Scheme Agreement, 137 Ship financing, 212–214
Schierwater, Harry T., 124 Ship Mortgage International, 271
Schjølberg, Oddvar, 154 Shipping banks, 36, 243, 269, 271
Schreiner, Johan, 18n22, 18n23, Shipping companies, 2, 32, 64, 93,
74n39, 86, 86n83 145, 174, 196, 232, 260, 279
The Schulters Group, 272n24 Shipping cycles, 96, 216
Scoll, David, 144 Shipping Directorate, 140, 238
Scotland, 33, 139 Shipping industry associations, 234
Seafarers, 2, 35, 64, 92, 134, Shipping policy, 177–179, 178n38,
151–155, 160, 232, 235, 260, 236, 269, 287, 304
276 Shipping shares, 54, 81
Seafarer’s unions, 234 Shuttle tankers, 245, 246, 252, 263,
The Second Boer War, 56 264, 268
Second-hand prices, 81 Sig. Bergesen d.y., 115, 249, 296
Second World War, 7, 55, 97, Sinclair Petrolore, 169, 169n17
104n27, 105, 108, 111, 119, Singapore, 260, 267, 268, 272n24
124n77, 133–155, 162, 163, Single vessel partnerships, 15
166–171, 179, 185, 186, 211, Single-ship companies, 114, 115
231, 260, 277, 281, 283 Sing Sally Oh, 51n82
Seglem, Trygve, 246 Sjappa, 124
Segments, 10, 12, 25, 100, 120, 166, Sjøloven av 1860, 46
174, 176, 188, 188n65, 199, Skaregrøm, 110, 110n47
202, 203, 209, 210, 213, Skaugen, 222
215n29, 219–221, 223, Skudesneshavn, 265
242n29, 261, 266, 281, 290, Smålenene, 13n13
291, 298, 300 Smedvig, 244, 249, 249n38, 251,
Seismic surveys, 250, 265 264, 268
Sekula, Alan, 9, 9n8 Smith-Petersen, Morten, 14n16
Seland, Johan, 110n46, 148, 210n23 Smuggling, 92, 92n3, 93, 93n4, 105
Seneca, 91, 126n83 Social-democratic, 225
Serbia, 66 Socialist Left Party (Sosialistisk
Seychelles, 240n22 Venstreparti), 237
Index 325
Sognefjord, 66 Sterling Crisis, 150

S.O. Stray, 110, 110n46 Stettin, 31
South Africa, 225, 225n48, 237 Stock exchange, 82, 84, 181, 182,
South America, 25, 27, 27n14, 266, 268, 268n14, 284n11,
69n18, 142 293, 307
South coast, 11–14, 38, 42, 45, 95, Stolt-Nielsen, 189, 221, 222, 298
101, 109, 110, 112, 113, Stopford, Martin, vii, 169, 200n10,
113n57, 139, 182n49, 245, 207n18
264, 272n24 Strategic parameters, 204, 206
Southeast Asia, 25, 164, 239 Strøm-Erichsen, Anne Grethe, 155,
Southern Europe, 239 155n53
South Georgia, 117, 124n77 Sturmey, Stanley G., 115, 178
South Korea, 260, 261 Submarines, 63, 64, 67, 72–76,
South Shetland, 117 72n28, 138, 138n12, 139,
Spanish Civil War, 126 146, 154n52
Spain/Spanish, 23, 27n14, 36, Subsea, 265
103n24, 116, 139, 239, 254 Subsidies, 45, 261
Specialization, 2, 32, 94, 100, Subsidization, 184, 203
171–175, 177, 188, 218–223, Suez Canal, 165, 204
261, 279, 289–291 Sunde, Arne, 142, 142n22, 153
Specialized markets, 219, 220, 222, Sunningdale, 141
281 Supertankers, 206, 207n18, 210, 264
Speculators/speculation, 69, 80, 82, Supply shipping, 250, 265, 290
84–86, 205, 251 Supply vessels, 224, 250, 255, 264,
Spot market, 199, 199n7, 206, 265
207n18, 211, 213, 251 Supreme Court, 153, 297, 297n20
SS Norway, 226 Sweden-Norway, 39, 40
SS Warrior, 172, 172n23 Sweden/Swedish, 6, 11, 11n9, 23,
Stagflation, 196 26, 27n14, 39, 39n42, 40, 47,
Stanford-le-Hope, 124 56, 72n28, 75, 77, 84, 93,
Staubo, 244 112, 113, 124, 125, 125n79,
Stavanger, 13n13, 25, 31, 35, 125n81, 137n10, 138, 161n5,
113n57, 115, 224, 249, 252, 197n5, 199n8, 233, 239, 268,
264, 265, 268, 290, 299 277, 283, 285, 289
Steamships, 7n6, 11n9, 13, 14, 21, Switzerland, 161n5, 197n5
22, 22n3, 25, 28–30, 29n18, Syse, Jan Peder, 189
31n19, 35, 41n47, 42, 54, 64, Sæther, Rolf, 265
94, 102, 109, 111, 125, 152, Søndre Bergenhus, 13n13
259n1 Søndre Trondhjem, 13n13
326 Index
T Trapani, 31
Table Bay, 31 Treasury, 143, 200
Taiwan, 260, 267 Tromsø, 13n13
Tanker fleet, 100, 101, 136, 201, T2-tankers, 148
209, 215, 216, 245, 268, 296 Turbine tankers, 205, 206, 207n18,
Tanker share, 206, 207n18 207n19
Tanker shipping, 100, 112, 121, Tønsberg, 25, 35, 113n57, 115, 117,
173, 175, 208, 209, 292 263
Tante Klara (Klara Breivik), 123, Tønsberg Bar, 160, 254
123n74
Tax reform, 272
Tax system, 177, 180, 208, 210, 272, U
272n25, 297 Ugland, 222, 245
Technological improvement, 16, Ugland Nordic Shiping, 268
106, 166, 168 Ulltveit Moe, Jens, 246
Technological innovation, 223, 293 Ultra Large Crude Carriers (ULCC),
Technological revolution, 171–175 210
Teekay, 268 Understanding on Export Credits,
Telegram, 16, 66, 79n58, 108n37, 184
140n17 Unemployment, 105, 106, 121, 164,
Terminals, 124, 160, 169n17, 170, 196, 197, 253
171n22, 221, 222 Union with Denmark, 39n42
Thailand, 260n2 Union with Sweden, 39
Theogennitor, 252 United Fruit Company, 105
Third-country shipping, 37 United Maritime Authority (UMA),
Thome, 272n24 147
Thor Dahl, 248 United Nations Development
Thoresen, 97n14, 116 Programme (UNDP), 1, 1n1
Thorshøvdi, 248 The United States/American, 9, 21,
Titanic, 5 22, 22n3, 25, 27, 28, 32,
Tonnage agreement (1917), 74, 78, 34n25, 40, 45, 63, 66, 67,
137n10 67n14, 72, 75, 78, 83, 91, 92,
Tonnage per capita, 8, 22n3 94–96, 94n5, 99, 100, 102,
Torrey Canyon, 169n17 103n25, 104, 105, 107,
Traditions, 5, 15, 42, 46, 48, 209, 107n33, 120, 122, 124n77,
217, 232, 237, 240, 245, 250, 126, 126n83, 140, 142–144,
277, 290, 304, 305 147, 148, 148n37, 152, 163,
Tramp trade, 5, 115, 116 170, 172, 200, 205n15, 221,
Index 327
231, 237, 249, 261, 266, 267, Wars, 36, 63–89, 93–100, 133, 161,
296, 298 214, 265, 276
Unrestricted submarine warfare, 64, War sailor, 134, 134n1, 135,
74, 78 151–155, 154n52, 155n53,
Urbanization, 17 276, 277
US Coast Guard, 91, 92 The Warzaw Pact, 163n7
US Congress, 25, 45, 126 Westfal-Larsen, 120, 189, 220, 222,
Uteseilere, 160 244
West Indies, 27n14
West of Norway, 13
V Weston, William, 144
Vaderland, 170 Whale oil, 118
Vancouver, 123n74, 268 Whaling, 13n13, 48, 81n67,
Vaterland, 5 117–119, 181
Vera Cruz, 31 Wilh, Wilhelmsen, 115, 117, 120, 298
Verdens Gang, 134, 134n1, 236n9 Wilhelm II, Kaiser, 66
Vertical integration, 222 Wilhelmsen, Anders, 222, 298
Vestfold, 118, 272n24 Wilhelmshafen, 67
V.Group, 272n24 Willoch, Kåre, 236, 236n9
Vikingen, 105 Wirtschaftswunder, 163
Vikings, 33, 49, 50n77 “Worst case” scenario, 201
Vikøren, David, 178, 235 Wuhu, 32, 32n23
Virginia, 124n77
von Gerich, Walter Harald, 76
von Rautenfels, Baron, 76, 77 Z
Zanzibar, 240n22
Zarate, 32, 32n23
W Zurich, 183
Waage, Hagbart, 213
Waaler, Per, 220, 222
Wallem, 272n24 Ø
Wallenius Wilhelmsen Logistics, Ørkenen Sur, 122
298 Østre Toten, 190
Wanderjahre, 50, 120
War insurance, 77, 136, 182
The War Insurance Fund, 136 Å
War losses, 77–80, 109, 146n33, Åland, 110, 110n47
150 Ålesund, 265

Norwegian Shipping in The 20th Century

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PALGRAVE STUDIES IN MARITIME

More information about this series at

Palgrave Studies in Maritime Economics

Library of Congress Control Number: 2018952928

Cover illustration: Hans Berggren/GettyImages/Fatima Jamadar

Strømme Svendsen and Roar Ådland, as well as colleagues at the Bergen

1 A Brief Introduction to Norwegian Shipping 1

2 The Starting Point: A Small Country, but a Major

3 The First World War: The Neutral Ally 63

4 Crisis? What Crisis? Norwegian Shipping in the Interwar

5 The Second World War 133

6 Bigger and Bigger: Shipping During the Golden Age,

7 The Shipping Crisis 195

8 Rebound: The Return of Norwegian Shipping 231

9 Onshore and Offshore: The New Maritime Norway 259

10 Epilogue: A Century of Norwegian Shipping 275

Fig. 4.4 Norwegian lay-ups, quarterly estimates, 1920–1939, 1000

© The Author(s) 2019 1

Given that Norway is a small economy, relations with other countries

An Important Maritime Nation

with a small shipload of salt.

Therefore, at the very beginning of the 20th century, Norway tried to

The International Shipping Industry

Hovde (1948, 259).

• If we want to learn about the development of the shipping industry in

The bounce-back was spectacular, with the fleet multiplying by a

Kiær (1893, 361).

What Is “Norwegian Shipping”?

v­ariations between Greek-owned and Norwegian-owned ships. Greek

would be sourced from locations further away—even crossing interna-

Figure 1.2 illustrates the large geographical differences in the owner-

This geographical division becomes even more striking if we look at

stock exchange-listed multinational conglomerates that drew labour and

Fritz (1980, 148).

i­nformation, increasingly decided the business and instructed the cap-

Norwegian Maritime History: An Update

Statistics Norway (1961) Skattestatistikk for inntektsåret 1960 (Oslo: Statistisk

Norway is larger than anyone knows:

© The Author(s) 2019 21

Shipping had continued to increase in importance after Kiær made his

The Portuguese example illustrates that maritime hegemony is not per-

United Kingdom Other

Fig. 2.1 Norwegian foreign-going shipping 1900, by country and region,

tant markets—though again, it is important to remember that the effect

Thanks to A.N. Kiær’s insatiable appetite for shipping statistics, we

Table 2.2 The Norwegian fleet, transport and revenue, 1900

Lloyd’s List.20 Places such as Nash Creek in New Brunswick, Canada

Why Norway? Geography, History and Culture

The majority of the new ships were built in Norway, particularly on

At end of the war, Norway’s status as a Danish province ended after

The liberalization of the international market was a necessary condi-

century the development changed dramatically. In the period 1850–1875

Built in Norway Bought from abroad Wrecked and condemned

Sold abroad Net change

In the early expansionary phase, in the 1850s, when the majority of

share of the ships—in particular sailing vessels—began to sail without

battered and weather-beaten, ready to sail again after an overhaul in dry

Norwegian Maritime Culture

The second element is “Norwegian culture,” which covers the manner

seamen’s memoirs themselves—with their exoticism and tales of adven-

clearly enabled and encouraged capital formation on a scale that would

became Able seamen, and could progress to Boatswains. Third mates

The First Decade of the New Century

1 A Brief Introduction to Norwegian Shipping 1

2 The Starting Point: A Small Country, but a Major

3 The First World War: The Neutral Ally 63

4 Crisis? What Crisis? Norwegian Shipping in the Interwar

5 The Second World War 133

6 Bigger and Bigger: Shipping During the Golden Age,

7 The Shipping Crisis 195

8 Rebound: The Return of Norwegian Shipping 231

9 Onshore and Offshore: The New Maritime Norway 259

10 Epilogue: A Century of Norwegian Shipping 275

An Important Maritime Nation

The International Shipping Industry

What Is “Norwegian Shipping”?

variations between Greek-owned and Norwegian-owned ships. Greek

information, increasingly decided the business and instructed the cap-

Norwegian Maritime History: An Update

Why Norway? Geography, History and Culture

Norwegian Maritime Culture

The First Decade of the New Century

The Crucial Role of Shipping During Wars

Hands Across the North Sea

War Risk and War Losses

Jobbetid: The Financial Boom

illion plus interest—though with no reimbursement for the fact that

International Shipping in Transition

o perated in a “dark, dark grey area,” sometimes with shady tactics to

he Hare and the Tortoise: From Laggards

The New Breed

Not All Rosy

The Sagatind Aftermath

The Forgotten War