200 years of Swire: The China Navigation Company
In celebration of World Maritime Day, this latest post in the series commemorating the 200th anniversary of John Swire & Sons focuses on The China Navigation Company [CNCo].
Established in 1872, today CNCo is the wholly owned, deep-sea shipping and operating arm of the Swire Group, operating a a global network of multi purpose liner services, drybulk, and bulk logistics services.
By the early 1870s John Samuel Swire was convinced that there was an opening for increased steam shipping on the Yangtze River and decided to establish a new company for this. The China Navigation Company was formed in London in 1872 with a capital of £360,000 chiefly put up by John Samuel Swire and William Hudson Swire with Holt’s, Rathbones, Y H Ismay, R N Dale, John Scott, T Barlow and Mssrs. Imrie and Harrison supplying additional money.
John Samuel Swire initially ordered three ships to be built for the Lower Yangtze trade and in 1873 purchased the Union Steam Navigation Company giving the China Navigation Company two ships and the leases on property in Shanghai and at other river ports.
By the mid-1870s CNCo interests had spread to the Canton River trade and by the late 1870s to the Shanghai to Ningpo [Ningbo] and Shanghai to Tientsin [Tianjin] routes, despite periods of intense competition and rates wars as well as pool agreements with the other shipping companies on these routes.
In 1883 the Coast Boats Ownery, which had been formed to handle local coastal trade was fused with the CNCo and in the 1880s and 1890s the CNCo expanded its fleet and the ports of call so that by 1894 it consisted of twenty-nine ships calling at ports along the Yangtze, down the South China coast, in the Philippines, S E Asia, Australia, Japan, Russia and the North China coast.
Despite problems in Far Eastern trade and affairs during the Twentieth Century, including increased nationalist sentiment and anti-foreign campaigns, boycotts, piracy, staff and salary discontent, and disrupted trade routes due to China’s internal civil disturbances, the CNCo fleet continued to operate up to the Second World War and in 1940 was requisitioned by the British Government for the duration of the conflict. In the autumn of 1945 CNCo returned to Hong Kong and Shanghai and gradually requisitioned shipping and property seized by the Japanese was restored and normal working resumed.
Butterfield & Swire were appointed from the formation of CNCo as Eastern Managers, all correspondence with John Swire & Sons, the London Managers being conducted by the offices in Hong Kong and Shanghai. While Shanghai was responsible for the CNCo business on the Yangtze River and the North China Coast (from Ningpo [Ningbo] north), Hong Kong handled the south coast and Canton trade and all the South East Asian, Australian and Philippines routes. In many ports the B&S agent acted for CNCo although in some places a separate CNCo office might be established and in the Philippines, Australia and S E Asia, where there were no B&S offices, independent agents were employed.
After World War II, CNCo began to pioneer ‘new’ trading routes from Australia to Papua New Guinea and the Pacific Islands – a region that is now the focus for CNCo’s owned and managed trades.
In the 1960s, the company introduced a revolutionary new method of cargo carrying to these Pacific trades: “unitisation” involved palletised cargo carried in specially adapted ships fitted with side ports and worked with forklift trucks carried on board, and was ideally suited to island ports where shore facilities were minimal. In the late 1970s, CNCo repeated the trick by upgrading these services to full containerisation, using self-geared vessels fitted with mobile gantry cranes – an innovative approach at that time.
The 1960s and 70s also saw China Navigation diversifying its scope of activities in two other very different directions. In the 1960s CNCo developed a passenger cruising business creating a niche market operating seminar cruises out of Japan and successfully dominated this market for almost 20 years. The early 1970s also saw CNCo beginning to invest seriously in the dry bulk carrier market – a move that marked the company’s first departure from a traditional owner/operator role to that of ship manager, with a succession of vessels, ranging from Handymax to Capesize, chartered into some of the world’s leading bulk pools.
The mid-1980s saw another new departure for CNCo, and the beginning of a highly successful, decade-long involvement in the Very Large Crude Carrier market, with two owned and managed vessels traded on long-term charter to oil majors, helping the company to further diversify its expertise.
During the 1990s, China Navigation’s liner trades expanded rapidly, but the focus of management activity moved away from its head office in Hong Kong. Asia Australia Express merged with Australia Japan Container Line, and thereafter Crusader Swire Container Service merged with New Zealand Unit Express coming under the aegis of a common P&O Swire Containers office in Sydney from 1991. Management of New Guinea Pacific Line moved from Hong Kong- via a three-year joint venture with Bank Line and Columbus Line in Singapore – to be consolidated with that of Chief Container Service in the Swire Shipping Offices in Sydney in1993. With the initiation of a trans-Tasman service in 1999, Swire in Sydney became a natural focus for management of this trade too.
Meanwhile, CNCo’s interests in the New Zealand markets hinged on its shareholding in first, Tasman Asia and, later, Tasman Orient Line – both headquartered in Auckland.
In 2009, CNCo relocated its headquarters to Singapore and established The China Navigation Company Pte Limited, as a subsidiary of The China Navigation Company Limited (UK registered parent company). The company has evolved from operating niche trades on the Yangtze River and along the China coast to establish a position as the leading provider of multipurpose liner shipping services with a specific focus on Papua New Guinea, Australia, New Zealand and the island nations of the Pacific Ocean.