The Allen Collection

Shaw Savill Line

History

The UK-New Zealand trade was one of the last routes to convert from sail to steam. Early steamships needed to carry so much coal fuel for the great distance from New Zealand to the bunkering facility in the Falkland Islands, that steam service was unprofitable. There was also a considerable imbalance of trade, so that about half the ships arriving in New Zealand sailed in ballast to the Dutch East Indies, China or even the west coast of USA for return cargoes. A round voyage took at least 9 months, but seasonal wind patterns and seasonal northbound agricultural cargoes made regular monthly sailings impractical and each ship usually completed only one voyage per year.

Two British companies provided most of the ships. These were Shaw, Savill & Co (founded in London in 1858 by Robert Shaw and Walter Savill) and Patrick Henderson’s Albion Shipping Co (founded in Glasgow in 1864, although Henderson began operating to New Zealand as Albion Line in 1856). As the two organisations operated from different British ports they developed a friendly rivalry. Both companies mainly acted as brokers, advertising for passengers and cargoes for New Zealand and utilising chartered ships. Over the years the two companies bought the best of the chartered ships, especially ships with ‘tween decks that were suitable for the carriage of emigrants.

In 1873 the New Zealand Shipping Co was formed by local settlers. (See New Zealand Line history) The new company followed the same operational pattern as the two British companies and took about one third of the expanding southbound trade, but NZSC presented the existing companies with a serious challenge by capturing about half of the northbound cargoes. Despite this all three companies maintained a friendly relationship and worked together to improve the volume of northbound cargoes. From 1879 Shaw, Savill and NZSC jointly financed pioneer steamship voyages (without financial success), while in 1882 NZSC successfully converted a sailing ship to carry a cargo of frozen meat to UK. These experiments produced a strong political campaign in New Zealand for a refrigerated steamer service to UK. This resulted in a joint Mail Contract being awarded to Shaw, Savill and NZSC in 1883.

This led to the 1883 amalgamation of the two British companies as Shaw, Savill & Albion Co Ltd with a combined fleet of 31 sailing ships. Shaw, Savill retained 5 ships and Captain John Leslie took 3 Albion ships. These additional sailing ships were chartered to SSA. Orders were placed with Wm Denny for two steamers (Peter Denny was a director of SSA) and in the interim steamers were chartered to begin the mail service. SSA operated London-Cape Town-Hobart-New Zealand-South America-London. Five ships were needed and SSA entered into a joint-venture agreement with White Star covering three steamers that were surplus in its fleet. This became a permanent arrangement with White Star providing passenger ships under SSA management.

The new arrangements were very successful and by 1886 New Zealand exports exceeded imports for the first time. As a result of a major dock strike in London in 1889, SSA moved much of its refrigerated cargo to dedicated cargo carriers, often sailing to other UK ports. In 1897 SSA and NZSC agreed to pool the carriage of meat and wool from New Zealand.

J P Morgan’s IMMC acquired control of White Star in 1902. There was no change in the joint service arrangements with SSA, although White Star gradually increased its shareholding in SSA. In 1905 George Thompson & Co converted its Aberdeen Line into a limited company with separate management and investment shares. (A common practice at the time) White Star took 12.5% and SSA 8.5% of the investment shares, but jointly took 67% of the management shares giving them control of the business.

In 1910 Sir John Ellerman began buying SSA shares on the London market, ending up with 55% of the company while White Star increased its holding to 45%, but with the majority of the management shares. The two organisations amicably agreed board representation, with the existing SSA management remaining in control of operations. Sail services ended when Captain Leslie sold his last sailing ship in 1913 – the last SSA directly owned sailing ship having been sold in 1908. SSA was fortunate during WW1 and only lost 3 ships, while Aberdeen was miraculously completely unscathed. Some services were routed via the Panama Canal after 1916.

In 1927, Lord Kylsant took control of White Star. This had no immediate impact upon the operations of SSA, except for imposing an obligation to buy all future ships from Kylsant’s Harland & Wolff. Kylsant’s empire was now seriously overextended and was unable to make the 1928 repayments due on British Government loans. The repayments were rolled over and Kylsant raised £2 million from the London Stock Exchange, by issuing a sale prospectus that was more a work of fiction than financial fact. Also in 1928 Kylsant bought the heavily loss making Australian Commonwealth Line from the Australian Government on a deferred payment basis and placed it under Thompson’s management as the Aberdeen & Commonwealth Line. Despite having control of SSA, Kylsant used half of the new money to buy Ellerman’s minority shareholding, without consulting his board. The board was outraged at this misuse of scarce cash and when the 1929 government repayments could not be met, Kylsant was removed from office, subsequently charged with fraud over the 1928 prospectus and imprisoned.

In 1930 the British Government set up the Royal Mail Scheme, using London City lawyers, accountants and bankers to rescue as many as possible of the Kylsant companies. Fortunately although Kylsant had removed its cash, SSA had not been integrated within the group. It was however, dependent upon White Star ships and White Star was hopelessly bankrupt. In 1933 SSA was taken over by Furness Withy and recapitalised. SSA bought Aberdeen Line. SSA, P&O, Furness Withy, NZSC and Orient took over Aberdeen & Commonwealth, with SSA as managers. In 1934, the Government funded the creation of Cunard-White Star Ltd on the basis that all of the White Star Australian assets were sold to SSA.

The underlying strength of the SSA business enabled it to survive the Kylsant catastrophe. At the outbreak of WW2 SSA owned 26 ships, with one under construction. It lost 12 ships to enemy action. After the war the company embarked upon a major rebuilding and expansion programme that resulted in the fleet reaching a peak of 33 ships in 1968, but containerisation and airline competition soon rapidly reduced fleet numbers. In 1980 Furness Withy was bought by the Hong Kong shipowner C Y Tung and in the subsequent reorganisation SSA disappeared when it became an integral part of Furness Withy Shipping in 1985.

Shaw Savill Line