Strategic shifts

The shipping industry offers neither an easy nor a consistent means of earning a living; always peaks and troughs, a Beaufort Scale of a business, with rare periods of calm weather between storms of varying intensity. Throughout the Bibby Line’s history, major strategic decisions have been in response to external changes – whether in technology, such as the introduction of steam power, diesel engines, air travel, containerisation; to changes in British government policy, or to world events such as the annexation of Burma, the opening of the Suez Canal, assorted wars, globalisation, or the Asian crisis. Add in the cyclical nature of the shipping industry – cycles that can take decades to work through, or turn almost overnight.
Internal pressures are harder to analyse – personal ambition and interests, family and shareholder issues can exert considerable pressure on strategic decision making. For instance, Sir Derek Bibby wrote in 2001 of the relationship with his father, noting one of the successes of his tenure as ‘standing up successfully, to my father.... If I had not won, I feel certain the Company would have folded in 1971 when the trooping contracts ended and the Burma/Ceylon trade packed up.’
The company nearly foundered 10 years later, too, after Bibby left Seabridge. Michael Bibby explains the company’s crisis in the early 1980s: ‘With high inflation and the high corporation tax rates of the 1970s, plus 100% writing down allowances (which could be sold to other companies), a ship could be ordered and on delivery two years later would be worth 50% more – and 50% of its value could be offset against tax. The new ships therefore seemed certain to make money and many were ordered. But all that changed after Margaret Thatcher came to power in 1979: inflation was quickly reduced and the tax breaks were removed. At the same time the freight markets crashed, so Bibby Line’s income fell dramatically, causing ship values to plummet. The company had overextended itself on the new ships, and was forced to sell to pay back the banks. No new vessels were ordered between 1977 and 1989 (the only addition to the fleet was the little 2,500 ton dwt ethylene carrier Leiv Eriksson, acquired in 1985) as the company struggled to survive. Cost savings were paramount and the high cost base and high quality standards of a UK ship owner/manager was threatened by low cost operators from overseas competing in international markets.
‘The company was on its knees, unable to ride the cycles in shipping, says Michael. ‘Shareholder funds were down to £13 million and unless my father could find ways to diversify the business, he knew the Bibby Line would be finished.’ The next stage of the company’s evolution began, with the start of Financial Services and Distribution, specialising in higher value LPG and chemical tanker vessels, the development of marine activity through ship management, and finding niche opportunities in the coastel, jackup and offshore industries.
Costs were mitigated by flagging the vessels out (ie registering ships outside the UK) and moving the seafarers on to offshore contracts thereby avoiding national insurance tax contributions. Foreign crews were also introduced. A major shift for the company and, at the time, difficult to sell to Bibby Line employees, the move offshore helped the company survive and the manning operation on the Isle of Man has since been turned into a profitable business in its own right.
The LPG story ended with the highly profitable sale of the three LPG carriers in the Exmar pool – Cheshire, Oxfordshire and Lancashire – in February 2005, almost at the top of the market, proving that there is always a time to sell. This has given Bibby Line a substantial injection of funds which are to be invested in new shipping opportunities.
‘Looking back, the 1970s was about survival, the 1980s about change and the search for new markets, and the 1990s saw consolidation and organic growth,’ says Michael. ‘In the 2000s, the businesses started in the 1980s are maturing, so we are now having to be more creative and more professional to deal with stronger competitive pressures. Our risk management is improving – we understand better what we do, and how to minimise the risks while still developing people to deliver more ambitious ideas.’
As the company enters 2007 the strong balance sheet, new acquisitions, expanding international presence and raft of new products across the business means that the company is entering yet another growth phase. Whether the lessons of the past, to back the winners and quickly to limit the losses from experiments that don’t work, has the desired effect on the company’s fortunes, no doubt the seventh generation will make very clear to the sixth, in due course.

Loss of the Yorkshire

This extraordinary photograph captures the moment that the Yorkshire was torpedoed by U-boat U-37 while in convoy off the French coast; 33 passengers and 25 crew lives were lost as she sank in just nine minutes. The US ship Independence Hall picked up 118 passengers and 160 crew, prompting the U-boat to surface and thank the American crew, in English, for the rescue. Captain Mackenzie of Independence Hall said: ‘The officers of the British ships were sublime. With blood streaming down his face and although seriously wounded, the second officer of the Yorkshire coolly gave orders to abandon ship.’
Miss Crowther, a passenger on the Yorkshire, said: ‘The most harrowing thing was to see people clinging to bits of wreckage, or floundering in the water, begging in vain to be taken aboard.’
Second Officer Sheldrake, the only officer to survive, went on to become the Commodore of the Bibby Line in 1970.

Early days

Moored next to a giant of the 1970s, the first ships of the Bibby Line would have looked like sprats alongside a basking shark; the Dove – the first ship in which John Bibby had a share, back in 1801, was a mere 60 tons burthen and probably no more than 65ft in length. The largest ship John Bibby ever owned was the Cestrian, at 380 tons and 109ft length she was a major step up from the Dove, but even the largest sailing ship the Bibbys ever owned – Melbourne – was only 1,212 tons.
Compare the English Bridge of 1973, 925ft in length and 167,000 tonnes deadweight. Almost the only similarity between her and the Dove is that they both floated in salt water. Material, design, propulsion, navigation, communications, crew skills, living conditions, range and cargo have all changed beyond recognition. The only other common factor for every ship that ventures out to the deep ocean is that not even the biggest and most technically sophisticated is entirely safe – the sea is capable of swallowing a steel Leviathan without trace; no mariner, of whichever century, would ever ignore the power of the elements.
John Bibby didn’t build a ship until 1812 – the Highfield, named after his partner John Highfield, was a brigantine of 142 tons, built in Chester (she was sold for breaking in 1839 with the rare distinction of having served with one owner for her entire 27 years). Up to that point, Bibby & Highfield acquired a mixed bag of vessels, some of them built on the Mersey and owned locally, and others were prizes captured from the French or the Spanish by privateers and sold on – L’Harmonie and Providence, for instance.
A couple of Bibby’s ships were lost to the same fate: Mary and Sarah, for instance, both seized and sold in the West Indies in 1810 by the marauding French while Napoleon was wreaking havoc across Europe. Mary had been acquired by Bibbys after she was detained at Liverpool as a prize in retaliation for the seizure by Denmark of British Baltic traders.
French privateers were only one hazard – shipwreck, fire, pirates and weather could be the cause of losses. As could the tiny Teredo navalis, or shipworm. Actually a bivalve mollusc, Teredo tunnels into submerged wood and digests the cellulose, creating serious damage to wooden hulls. The only effective prevention was to sheath the bottoms in copper as a barrier to the destructive creature. (Hence the expression ‘copper-bottomed’ to mean a safe investment.) Maria, built in Nova Scotia, was of birch planking with a layer of pine over the top to try to stop shipworm, but the technique was not successful and Maria only stayed in the fleet for two years. John Bibby and his sons profited handsomely, incidentally, making copper sheathing for ships at their rolling mills in Seacombe.
Sailing ships were always at the mercy of the weather – too much wind or no wind could keep a vessel in port for long enough to break contracts; bad weather en route, even if the ship got home, could mean months of repairs. To own ships carrying other people’s cargo was not a viable proposition; so most ships were owned by the merchants whose goods were being carried. It was unusual for a ship to have a single owner – too exposed to manifold marine hazards. Ownership of most ships was split into 64ths, with owners taking shares in a variety of vessels to spread the risk; and one individual or partnership would have the controlling interest and the management of the vessel.
John Bibby’s motley fleet needed constant replacement, as most of the early acquisitions were lost at sea; gradually John Bibby grew the fleet with his own new built vessels; by 1836 there were 18 ships, of which 15 had been built for Bibby. The total tonnage of these 18 vessels together, incidentally, was less than the gross tonnage of the first Lancashire, built in 1889 for John’s son and grandson, James and Arthur.