The Norwegian Shipping and Trade Mission (Nortraship) was established in London in April 1940 to administrate the Norwegian merchant fleet outside German controlled areas. Nortraship operated some 1.000 vessels; was the largest shipping company of the world and is credited in giving a major contribution to the Allied war effort. It was however also criticised by the British for being too much focused on profit, and not enough on the war effort.
Nortraship had its main offices in London and New York, and was active during World War II. Nortraship was vital to Norway and the exile government as it lacked other sources to support the Allied fight against the Axis powers. The organisation handed the various vessels back to its owners when Norway was liberated in May 1945.
The Norwegian merchant fleet prior to World War II
In the years after World War I the Norwegian merchant fleet regained its losses and expanded into new sectors, primarily tankers but also dry cargo vessels. Particularly the years from 1930 were a growth period, contrary to the other major shipping nations. By the end of 1938 some 7% of world tonnage was Norwegian and Norway was the forth-largest shipping nation, behind United Kingdom, USA and Japan. Moreover, the expansion was based on newbuildings, thus lowering the median age of Norwegian vessels. Most of the new vessels were powered by diesel motors, they accounted for some 62% of the fleet, while Japan had some 27%, and UK 25%. Around 42% of the fleet was modern tankers, a total of 18% of the world tanker tonnage. Norwegian shipowners were innovative and willing to take risks in ordering new vessels during the depression.
The various services needed for ships operation had also been expanded, most important the classification society Det Norske Veritas, but also shipbrokers, insurance companies and shipping banks. The government also played an important part in establishing and updating regulations, and providing schools for engineers and navigators.
The forgotten war, September 3, 1939 - April 9, 1940
When Norway was invaded by Germany on 9 April, 1940 the merchant fleet had been at war for seven months. Norway was neutral, but lost 58 ships and around 400 sailors. During these months much of the framework that Nortraship was to operate within was created, most important the Norwegian-British tonnage agreements. Called the Scheme Agreement it stated that a percentage of the Norwegian fleet, including two-thirds of the tanker tonnage, was to go on charter to Britain. In return Norway would receive important commodities. This agreement alleviated the British problem of access to the Norwegian fleet, especially the tankers which they regarded as of "... exceptional importance." To protect the Norwegian neutrality, the agreement was negotiated between the British government and the Norwegian Shipowners Association.
The reasons for Norway being so important for the Allies was the relative decline of the British merchant fleet, too optimistic pre-war tonnage planning and the US Neutrality Act that effectively forbade US vessels to enter the war zone. The only other nation with a comparable merchant fleet was The Netherlands, but they strongly rejected any tonnage agreement, in fear of German reprisals.
The Norwegian government also established contingency plans for alerting vessels in case of war. In order to reduce the risk of being torpedoed most Norwegian vessels followed British convoys. The added safety was not without problems as Norway as a neutral country thus was close to siding with one of the belligerents. The convoying regime reflected Norway's dependence on Britain, as had been the case during World War I.
Norway invaded, the battle for control of the fleet, and Nortraship established
With the German invasion of Norway the question of control of the Norwegian merchant fleet became critical, and the Norwegian government, the British government and the Germans were the main contenders. Around 15% of the total fleet was within German controlled area and was lost for the Allies; the battle would be for the remaining 85% sailing worldwide.
The British contemplated confiscating the Norwegian merchant fleet as they did with the Danish fleet, but this was cancelled due to the continued Norwegian fight and intervention by the Norwegian ambassador. Through radio the Germans and their Norwegian collaborator, Vidkun Quisling, tried to get Norwegian vessels sailing for German controlled waters, but this was ignored by Norwegian masters.
To counter this the British Ministry of Shipping on April 12 negotiated an agreement with the Norwegians that temporarily settled insurance problems for the Norwegian fleet, contingent on vessels sailing for Allied harbours and this was radioed by the British Admiralty to all Norwegian merchant vessels 2. The next question was how the fleet was to be administered; the Norwegian ambassador was hard pressed on this issue by both Britain and Norwegian shipowners in London. It was however difficult to communicate with the Norwegian government as it was fleeing the German forces.
On April 16 it was held a meeting of Norwegian shipping professionals in the Norwegian chamber of commerce, where a detailed plan for a organisation for the merchant fleet was presented. The Norwegian ambassador Erik Colban and shipowner Ingolf Hysing Olsen were presented the plan but was however leaning towards a joint solution with the British Ministry of Shipping. The shipping professionals argued that a more independent organisation would be in a better position to safeguards Norwegian interests and the revenue from the fleet. As Colban and Hysing Olsen accepted this view it was already on April 19 arranged with renting offices in City and the following day, April 20 the first shipping experts moved in.
The Norwegian government now came forward with a cable that stated that the merchant fleet was to be administered jointly from London and New York. This was a surprise for the Norwegian ambassador in London, and the British government was not in favour of this. British pressure resulted in the Norwegian government in a meeting April 22 in Romsdal adopting a decree that would requisition the Norwegian merchant fleet for the Norwegian government. The administration should be in London and be led by Ĝivind Lorentzen , Norwegian minister of Shipping. By this act the largest shipping company in the world was created.
Nortraship in London - the early days
The main challenges for the new organisation were to take control over the around 1.000 vessels and to establish policies for working with Britain, and the still neutral USA. There was a lack of qualified personnel, and the ones available were often vocal, determined and used to work independent. That several of the Nortraship staff had their own shipping interests to take care of was also adding to the problem of managing the organisation.
The top management was almost exclusively Norwegian, while the lower ranks were dependent on British and US personnel. An exception was the accounts department; a major British accounting firm staffed it. In October 1940 Nortraship had 230 employees in London, by October 1941 this was increased to 350, one-third Norwegians. At the same time Nortraship New York had over 200 personnel, more than half of them Norwegians.
There were also legal problems to be solved, most crucial if Nortraship could have at its disposal vessels owned by shipowners still in occupied Norway. This could be solved by the Norwegian government appointing "... a curator to act on behalf of the Norwegian Owners." If not done, Nortraship vessels could be arrested in neutral harbours, like the US. After some discussion, The Norwegian government (still in Norway, Tromsĝ) declared by law 18 May 1940 that Ĝivind Lorentzen was to act as curator.
The insurance problems had to be solved - as the initial British offer was provisional. The vessels needed several categories insurance, and they were cut off from the ones provided by insurance companies in occupied Norway, as was the case for the classification society, the DNV's main office. On 28 May 1940 Ĝivind Lorentzen signed a "Memorandum of Understanding" with the British Ministry of Shipping that solved the insurance issue for a period of three months. This MoU was to be the foundation for insurance agreements for the rest of the war. The classification problem was solved by Nortraship taking over the DNV branch offices around the world, coordinated from the DNV office in Newcastle upon Tyne.
As the fighting in France evolved disastrously the British were however pushing for more tonnage, and to harmonise wages; Norwegian seamen were paid significantly more that British. Due to political reasons Nortraship got preferential treatment with an agreement signed 20 June 19403. Reducing the Norwegian seamens wages solved the unequal wages problem, the surplus would be placed in a fund to be paid out after the war (this was later to be a hotly debated issue in postwar Norway).
Nortraship in New York, internal fighting
After the initial organisation of Nortraship was clear, the business perspective came into focus. Nortraship was the exiled Norwegian government's main source of income and while contributing to the war effort, had to be managed for the highest possible profit. The vessels that were ceded to the British were fixed and had subsidised rates; the ones outside (the "free ships") was primarily sailing for the (still neutral) US on market rates.
When Norway was invaded German consuls entered Norwegian vessels in several US harbours; attempting to have them sailing for Norway. The Norwegian consulate did its best to counter this, and in deliberation with Norway's ambassador in London "The Norwegian Shipping Committee" in New York was established. Among the challenges was the crew problem; due to an agreement with the British wages were reduced from 5 June 1940, while crew on the "free ships" enjoyed an increase. Nazis and communists tried to sap the crewing and serious desertion problems were encountered, resulting in ships lying idle for months.
Meanwhile, in London the British were hard pressed with France on the verge of defeat. Within Nortraship the view that it was inexcusable not to have an adequate office in New York was gaining steam. In spite of resistance from the Norwegian ambassador it was decided on 21 May 1940 to send a Nortraship delegation to New York4, the reasons being both security in case of a German invasion, and commercial; many Nortraship vessels called at US ports. The British Foreign Minister, Lord Halifax was informed of the decision on 24 May 1940; they were reluctant but grudgingly had to accept it.
The delegation arrived in New York 11 June 1940 and started working with the already established committee, the main issues being organisation and the freight earnings from the "free ships"; until now they had been kept by the shipowners (or their US representatives). This resulted in revolt from the Norwegian shipping professionals in New York; they basically demanded status quo. As the situation became critical Ĝivind Lorentzen decided to travel to New York to sort it out. He arrived 5 July 1940 and after a meeting with the interim committee it was dissolved on 15 July 1940; thus paving the road for the Nortraship's New York office.
Ĝivind Lorentzen had only planned for a brief visit in New York, and in his absence Ingolf Hysing Olsen, Norwegian representative in Britain for the Norwegian Shipowners Association was acting head in London. Thus new friction was created, as the leaders of the two main Nortraship offices did not cooperate well. It was so severe that the Minister of Supply and Shipping, Trygve Lie had to forward it to the government for a formal resolution. 25 October the Norwegian government stated that the two offices were "... parallel enterprises, each working independently with its ships". This also resulted in a tally of ships; as of 21 November 1940 London administerer 570 ships while New York had 282.
Nortraship had a large fleet, and the expenses were considerable, it was therefore requisite to have a currency strategy. It was formulated by Arne Sunde (who later would become Minister of Shipping) on 1 August 1940 and stated that expenses should be paid with Sterling currencies, while one should refrain from using US dollars. The reason for this was both the current currency situation and the participated situation after the war.
In the fall 1940 Nortraship New York still had problems with "free ships", the most urgent the ones owned by Fred Olsen. The shipowner Thomas Olsen, residing in New York insisted on managing them, and argued that as the owner he would be in the best position to do so. He was cautioned by Ĝivind Lorentzen, to no avail, and after Olsen wrote a letter to the government Trygve Lie commented that Olsen's behaviour was "the kind that bordered on high treason5. Olsen was not alone in his scepticism to Nortraship, and 18 February 1941 "The Norwegian Shipowners Conference in America"; to ensure Norwegian shipowners interests outside Norway. Part of the scepticism was founded on the Norwegian government being Labour and thus possibly contemplating nationalisation of the shipping companies after the war. The Prime minister rejected this, and in a cable in March 1941 he promised that all ships would be handed back to their owners as soon as possible when the war was over.
The internal quarrels were still not settled, partly due to that Ĝivind Lorentzen also had ships that was managed contrary to Nortraship policy, in the Nopal line led by his son Per A. Lorentzen (later on head of Nortraship New York charter department). This was partly corrected after pressure from the London office in August 1940, but it did damage Lorentzen's position as head of Nortraship and was a recurring theme for his critics. One of the sternest opponents of Lorentzen was Hilmar Reksten , a maverick shipowner who himself had been in the spotlight for bending the Nortraship rules.
British pressure for more tonnage
Even though most of the Norwegian ships were sailing for the Allies, the British in April 1941 wanted more. This was a delicate dilemma for Norway and Nortraship; on one side Norway was allied and dependent on Britain, on the other the "free ships" that were sailing on neutral US generated hard US dollars, much needed for reconstruction of Norway after the war. The voyage to the British isles were moreover the most dangerous, and Nortraship argued that the modern Norwegian tankers would be better utilised in other trades. A more hidden agenda was the Norwegian fear that British and US would use the war to get an unfair competitive postwar position.
An initial mutual understanding was reached in a meeting in the British Ministry of Shipping 19 March 1941; Nortraship were to transfer 500.000 tons of its "free ships". Even though the agreement was not officially signed until October, the work with tonnage transfer started.
Nortraship London under Hysing Olsen tended to favour the British, while Nortraship New York under Lorentzen had a more businesslike stance. As the Allied losses increased dramatically the British on 29 April 1941 demanded all Norwegian ships, this was a total surprise for the Norwegians. Nortraship's New York office tried to influence the US through the US Maritime Commission, arguing that Norwegian vessels was much needed for US import and export; in fact only 30% of it was on US keel in 19396.
After hard negotiations with both the British and US shipping administrations a new tonnage agreement was signed the 10 October 1941, effectively letting Britain charter 3/4 of all Norwegian vessels.
In the negotiations Nortraship tried to secure the US dollar freight income, to obtain a more equal footing with the British in governing the Allied merchant fleet, and to receive assurances regarding Norwegian shipping rights after the war. In the currency issue Nortraship's stance seems to have prevailed; while in governing the Allied merchant fleet there was established a Anglo-Norwegian Shipping Committee that despite scores of meetings only superficially handled the issue. Finally, The British only gave vague promises as to their postwar shipping policies.
The United States enter the war
Nortraship's situation as a shipping enterprise changed dramatically when the US entered the war 7 December 1941. When the US was neutral Nortraship could benefit on the lack of tonnage and increased rates. With the British Ministry of War Transport and the US War Shipping Administration coordinating their policies in the Hogmanay agreement, Nortraship and its chief negotiator, Erling Dekke Nĉss had to follow suit.
Postscript
When World War II ended in 1945 Nortraship's main task was over, even thoug the final settlement was not done until 1964. In spite of internal quarrel the legacy was mainly positive; Norway retained control of her merchant fleet, it gave a vital contribution to the Allied war effort, and the basis was maintained for continued Norwegian shipping after the war.
References
- Thowsen, Atle (1992) "Handelsflċten i krig 1939 - 1945, Nortraship, profitt og patriotime". Grĝndahl og Dreyers Forlag A/S. ISBN 82-504-1895-6
- Undated PM, possibly mid September 1939, Ministry of War Transport, 59/1405, Public Record Office, London, United Kingdom
- Note 2: The message was transmitted every second hour in 24 hours from a number of British controlled radio stations around the world, Admiralty 199/495, Public Record Office, London, United Kingdom
- Note 3: Memorandum regarding chartering of additional Norwegian tonnage, 20 June 1940, Ministry of War Transport, 59/1646, Public Record Office, London, United Kingdom
- Note 4: Ĝivind Lorentzen diary nr II, p 31
- Note 5: Letter from Lie to Lorentzen, 20 October 1940, copy in Aake Anker Ording archive, box 15.
- Note 6: United States Maritime Commission. Report to Congress for the Period ended October 25 1941, House Document No. 554, Washington 1941, p 2, USMC, National Archives
Some essential data
- In the two years period from 9 April 1940 - 9 April 1942 a total of 157 Norwegian tankers did 615 voyages and delivered 6.9 million tons of oil; supplying some 1/3 of the total British isles need.
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