Erling Dekke Næss
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Erling Dekke Næss (5 September 1901 – 7 February 1993) was a Norwegian shipowner and businessman. Brother of philosopher Arne Dekke Næss, his nephew was the mountaineer and businessman Arne Næss Jr. Best known for his early adoption of
flags of convenience Flag of convenience (FOC) is a business practice whereby a ship's owners register a merchant ship in a ship register of a country other than that of the ship's owners, and the ship flies the civil ensign of that country, called the flag stat ...
, Næss was Deputy Head of Nortraship's New York office from 1942 to 1946. Næss was the initiator behind the OBO carrier. He is also credited as proposing the
Norwegian International Ship Register Norwegian International Ship Register or NIS is a separate Norwegian ship register for Norwegian vessels aimed at competing with flags of convenience registers such as Panama and Liberia. Originally proposed by Erling Dekke Næss in 1984, it was ...
, which allowed Norwegian shipowners to compete on an equal footing with flags of convenience.


Family and early years

Erling Dekke Næss was born in
Bergen Bergen (), historically Bjørgvin, is a city and municipality in Vestland county on the west coast of Norway. , its population is roughly 285,900. Bergen is the second-largest city in Norway. The municipality covers and is on the peninsula o ...
, Norway, and was son of Ragnar Næss, a businessman and banker. He had two brothers, the younger being the philosopher
Arne Næss Arne Dekke Eide Næss (; 27 January 1912 – 12 January 2009) was a Norwegian philosopher who coined the term "deep ecology", an important intellectual and inspirational figure within the environmental movement of the late twentieth century ...
. The family moved to
Kristiania Oslo ( , , or ; sma, Oslove) is the capital and most populous city of Norway. It constitutes both a county and a municipality. The municipality of Oslo had a population of in 2022, while the city's greater urban area had a population of ...
in 1911, where his father died in 1913. Næss studied economy at the
Royal Frederick University The University of Oslo ( no, Universitetet i Oslo; la, Universitas Osloensis) is a public research university located in Oslo, Norway. It is the highest ranked and oldest university in Norway. It is consistently ranked among the top universit ...
and earned a
B.S. A Bachelor of Science (BS, BSc, SB, or ScB; from the Latin ') is a bachelor's degree awarded for programs that generally last three to five years. The first university to admit a student to the degree of Bachelor of Science was the University ...
in 1920. He contemplated continued studies and travelled to Britain to finish a
Ph.D. A Doctor of Philosophy (PhD, Ph.D., or DPhil; Latin: or ') is the most common degree at the highest academic level awarded following a course of study. PhDs are awarded for programs across the whole breadth of academic fields. Because it is ...
at the
London School of Economics The London School of Economics and Political Science (LSE) is a public university, public research university located in London, England and a constituent college of the federal University of London. Founded in 1895 by Fabian Society members Sidn ...
.


Studies and work in Britain

Næss, however, did not have the financial resources to study, so he had to work; after a short stint at Midland Bank, he changed over to C. J. Hambro & Son. He started out as a typist, writing letters to Scandinavian customers, but after a year, he was made assistant in the new currency department. In the evenings, he continued his studies in economics, and was greatly influenced by
John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...
. Of special interest for his research and work were the imbalances created by the German war reparations, as their consequences could be seen in the currency market with the German mark rapidly losing value against other main currencies. The young Næss was amazed at being in the center of the disastrous decline of the mark, severely undermining the
Weimar Republic The Weimar Republic (german: link=no, Weimarer Republik ), officially named the German Reich, was the government of Germany from 1918 to 1933, during which it was a constitutional federal republic for the first time in history; hence it is ...
. By the middle of 1923, Næss decided to concentrate on his Ph.D. and thus ended his engagement with the bank. The aim of his research was to show how fluctuations in the currency market influenced each nation's prices, and he became a member of the
Royal Economic Society The Royal Economic Society (RES) is a professional association that promotes the study of economic science in academia, government service, banking, industry, and public affairs. Originally established in 1890 as the British Economic Association, ...
in order to follow lectures by Keynes and others. Keynes was a proponent of economists investing in the market, in order to "live as one learned", and young Næss followed this. He started out with small investments in rubber, as there were huge imbalances in supply and demand which he had found through his research. With the profits he continued into tin, and as he was successful he was offered a job as an analyst by his broker, so leaving him with less time for concluding his research.


Into whaling

In 1927, Næss got to know Rupert Trouton, and he presented Næss with a plan to buy control of his father-in-law's whaling enterprise, the Norwegian company ''A/S Hektor''. In establishing the ''Hektor Whaling Ltd,'' Næss developed his banking experience and contacts in
City A city is a human settlement of notable size.Goodall, B. (1987) ''The Penguin Dictionary of Human Geography''. London: Penguin.Kuper, A. and Kuper, J., eds (1996) ''The Social Science Encyclopedia''. 2nd edition. London: Routledge. It can be def ...
. Næss took £50,000 of the company's total capital of £600,000, a gamble that was to make him a huge profit. Due to his success in this enterprise, he was contacted by the Norwegian whaling pioneers Torger Moe and Johan Rasmussen in the summer of 1928. They asked for his help to arrange financing of their ''Viking Whaling Company Ltd'', as they planned to build one of the world's first whale
factory ship A factory ship, also known as a fish processing vessel, is a large ocean-going vessel with extensive on-board facilities for processing and freezing caught fish or whales. Modern factory ships are automated and enlarged versions of the earlier wh ...
. The vessel ''Vikingen'' was to be built as a tanker, with the whale processing factory on its deck; thus being able to trade both as a factory ship and a tanker. Næss found the prospect very interesting, arranged the financing and the first whaling company trading on the
LSE LSE may refer to: Computing * LSE (programming language), a computer programming language * LSE, Latent sector error, a media assessment measure related to the hard disk drive storage technology * Language-Sensitive Editor, a text editor used ...
started in January 1929. Næss did receive some critique from Norway for "selling out know-how" to the British, as whaling was a huge Norwegian industry. Næss' view was that the capital was difficult to obtain in Norway and that the crew and supplies would come from Norway anyway. ''Vikingen'', with a
deadweight tons Deadweight tonnage (also known as deadweight; abbreviated to DWT, D.W.T., d.w.t., or dwt) or tons deadweight (DWT) is a measure of how much weight a ship can carry. It is the sum of the weights of cargo, fuel, fresh water, ballast water, provis ...
of 15,000 tons was delivered in September 1929 and sailed for its first season, which was a huge success.


Enter the Panama flag

However, there were problems. As ''Vikingen'' was British registered, Norwegian stockowners were taxed twice. In order to remedy this, Næss found the innovative solution of moving the administration to France and registering the vessel ''Vikingen'' in
Panama Panama ( , ; es, link=no, Panamá ), officially the Republic of Panama ( es, República de Panamá), is a transcontinental country spanning the southern part of North America and the northern part of South America. It is bordered by Co ...
, as US-owned vessels had done since 1922. Næss had to overcome a number of obstacles, one of them arranging a tax agreement between the US and Panama. In concluding this agreement Næss got assistance from Standard Oil Company of New Jersey. After much research and work a Panama company named Viking Corporation was established and the ''Vikingen'' with its whaling vessels was sold to that company in 1931. The various Norwegian sailors' organisations were informed that all wages and agreements would remain as before, and a bonus would be given covering the fact that the seamen would not receive Norwegian public pensions. This was accepted by the powerful head of the seamen's union, Mr. Ingvald Haugen.


Depression and overproduction

The purpose of the ''Viking Whaling Company Ltd'' was not only to operate its own whale factory ships but to buy shares in Norwegian companies. It bought shares in A/S Vestfold, A/S Sydhavet and A/S Rosshavet, all controlled by Johan Rasmussen & Co. Besides ships these companies had a whaling station on
South Shetland The South Shetland Islands are a group of Antarctic islands with a total area of . They lie about north of the Antarctic Peninsula, and between southwest of the nearest point of the South Orkney Islands. By the Antarctic Treaty of 195 ...
. For the years 1924 - 1928, profits were above 60%, with a maximum of 147% as net profit to capital. With the depression the prices collapsed, and in the beginning of the 1930s, there were a number of vessels laid up and restructuring in the business. Næss was closely involved in this, especially with the sale of the new whale factory ship ''Vestfold'' () to a newly established company in London, as A/S Vestfold could not service its debtors. This was made possible by Næss's good connections in London, and saved the Norwegian company from bankruptcy. During the years 1932-34, the prices on
whale oil Whale oil is oil obtained from the blubber of whales. Whale oil from the bowhead whale was sometimes known as train oil, which comes from the Dutch word ''traan'' (" tear" or "drop"). Sperm oil, a special kind of oil obtained from the head ...
sank from £25 to £10 per ton. To counter this the first voluntary reductions of production came forth, as governed by a quota agreement signed 9 June 1932. The agreement set limits on production of whale oil and the length of the season, it was to start 7 October 1932 and end 30 April 1933. This resulted in that the companies Næss was involved with used only the modern ''Vestfold'' for that season.


A taste of whale hunting and shadows of war

In December 1934, Næss travelled to
Cape Town Cape Town ( af, Kaapstad; , xh, iKapa) is one of South Africa's three capital cities, serving as the seat of the Parliament of South Africa. It is the legislative capital of the country, the oldest city in the country, and the second largest ...
to study the whale hunt, and reached the ''Vestfold'' in January 1935. He saw the whole process of hunting and processing the whales. He was trying his luck at shooting whales and was very much impressed by the gunners' skill. The largest whale caught was some 33 m with a weight of over 100 tonnes. Næss seemed to regret part of his involvement in the whaling business, as it ended almost exterminating the large whales. Næss was back in London in March 1935, and though the market was still down it had improved, due to large purchases of whale oil by the German government. In the season 1937 - 1938 the market was down again, and with ''Vestfold'' producing a loss it was decided to sell ''Vikingen''. The only buyer was the German government, and it could only pay with building a tanker. It was a huge political gamble, but the agreement was signed in Berlin early 1938 and the building of the tanker started at Deutsche Werft in
Hamburg (male), (female) en, Hamburger(s), Hamburgian(s) , timezone1 = Central (CET) , utc_offset1 = +1 , timezone1_DST = Central (CEST) , utc_offset1_DST = +2 , postal ...
. Næss was acutely aware of war looming and followed the building himself. The vessel named ''Norness'' and delivered on 4 May 1939. The remaining whale factory vessel in the cooperating companies was now ''Vestfold''; it would do its last season 1939 - 1940. After delivering some of its cargo to
Procter & Gamble The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble. It specializes in a wide range of personal health/consumer he ...
in New York and the rest in Liverpool it would act as a bunker vessel in
Freetown Freetown is the capital and largest city of Sierra Leone. It is a major port city on the Atlantic Ocean and is located in the Western Area of the country. Freetown is Sierra Leone's major urban, economic, financial, cultural, educational and po ...
until 1944, when it departed and was sunk by a German submarine.


Into the tanker trade

The whale factory vessels were actually tankers with the whale processing equipment added, so Næss and his partners ventured into tankers. The first small step was in 1930 ,with two motor tankers, ''Nore'', a vessel and ''Norvinn'' , both considered large by then current standards. The vessels were to have traded in the spot market, but as the rates were low, both were laid up. Næss was not discouraged by this, and on 20 February 1936, he established the company ''Viking Tanker Company Limited'' with capital raised in London. The administration was in Paris, and the vessels were to sail under the
Panama Panama ( , ; es, link=no, Panamá ), officially the Republic of Panama ( es, República de Panamá), is a transcontinental country spanning the southern part of North America and the northern part of South America. It is bordered by Co ...
flag. It bought the two previous mentioned tankers from Rasmussen & Moe's Rederi A/S, and it ordered and bought several vessels. By 1938, the company had five vessels, ''Nore'', ''Norvinn'', ''Norvik'', ''Norlys'' and ''Norbris'', totalling - a large tanker fleet for that period. This resulted in a net profit of £192,575 for the company's second year of operation.


War and the escape from Norway

In September 1939,
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...
began, and the tanker markets became very strong. Even though sailing under a neutral flag, the ''Viking Tanker Company'' vessels were able to trade as they followed British regulations. Næss travelled to Norway in April 1940, as he had been requested by the British Ministry of Trade to contact Norwegian shipowners that did not fully support the blockade of Germany. He would also meet his colleagues in
Sandefjord Sandefjord () is a city and the most populous municipality in Vestfold og Telemark county, Norway. The municipality of Sandefjord was established on 1 January 1838. The municipality of Sandar was merged into Sandefjord on 1 January 1969. On 1 ...
, Johan Rasmussen and Torger Moe. Næss had a meeting on 8 April 1940, with the Norwegian Foreign Minister,
Halvdan Koht Halvdan Koht (7 July 1873 – 12 December 1965) was a Norwegian historian and politician representing the Labour Party. Born in the north of Norway to a fairly distinguished family, he soon became interested in politics and history. Star ...
and woke up the day after, 9 April, with the German invasion of Oslo, seeing the German transport planes landing at the Fornebu airport from his brother Arne Næss's house in
Holmenkollen Holmenkollen () is a mountain and a neighbourhood in the Vestre Aker borough of Oslo, Norway. It goes up to above sea level and is well-known for its international skiing competitions. Overview In addition to being a residential area, the are ...
. Næss was pessimistic about Norway's chances towards the German invasion and escaped Oslo on 10 April, heading westwards by air. The journey would be by train, air, car, and small boats. He ended up in
Ålesund Ålesund () sometimes spelled Aalesund in English, is a municipality in Møre og Romsdal County, Norway. It is part of the traditional district of Sunnmøre and the centre of the Ålesund Region. The town of Ålesund is the administrativ ...
, where he volunteered as an interpreter for the British Expeditionary Force. On the way, he was twice locked up by Norwegian police, suspecting him of being a spy. After a few weeks in Ålesund, the British forces had to withdraw, and Næss followed them back to Britain. Back in London, Næss had to establish contact with the seven vessels operated by the group. Until the invasion, they had been controlled by the office in Sandefjord, Norway. These were the whale factory ship ''Vestfold'' (built in Framnæs shipyard), the tankers ''Norness'', ''Norbris'', ''Norlys'', ''Norvinn,'' and the dry cargo vessels ,''Nordal'' and ''Nortun''. The British government also wanted control of his fleet, demanding to have the vessels on bare-boat charter. This was a blow to Næss, as he felt insulted by what he viewed as unfriendly treatment of a friend of Britain. Næss insisted on running the company himself, as he knew both the vessel and the crew. The British government initially did not accept this, and weeks followed where Næss was not allowed to contact his vessels or leave the country. The solution came through the banker Sam Guinness, as the companies had substantial amounts of US dollars in New York banks. This money could only be released by Næss, and the British government needed dollars. For $1,125,000, Næss got his travel permit to the US. In August 1940, Næs arrived in New York on the White Star/Cunard liner ''
Scythia Scythia (Scythian: ; Old Persian: ; Ancient Greek: ; Latin: ) or Scythica (Ancient Greek: ; Latin: ), also known as Pontic Scythia, was a kingdom created by the Scythians during the 6th to 3rd centuries BC in the Pontic–Caspian steppe. Hi ...
'', and he immediately proceeded to secure premises in State Street for his company office. However, the British government was still insistent on controlling the vessels, and their weapon was the bunkering permit needed for British-controlled harbours. As Næss thought he was the most capable person to control the fleet, he took his case to the
United States Maritime Commission The United States Maritime Commission (MARCOM) was an independent executive agency of the U.S. federal government that was created by the Merchant Marine Act of 1936, which was passed by Congress on June 29, 1936, and was abolished on May 24, 195 ...
. After a 10-minute meeting with its leader, Admiral Emory S. Land, in September 1940, he was instructed that two of his vessels should be chartered to the British and five to the US. Thus, Næss was one of the few, if not the only, private shipowners allowed to continue his operations during the war. The other countries controlled their vessels' crews, while Næss with his Panama flag had to recruit his seamen on a voluntary basis. Næss established a working relationship with the ''United States Maritime Commission''. For the accounting year ending 31 July 1940, the net profit was £150,325. For 1941, it was £155,844, and for 1942, it was £158,397. The first vessel the company lost was ''Norness'', which torpedoed off of Long Island in January 1942. It was the first vessel to be sunk that close to the US coast. The sinking was huge news and the press coverage was extensive, even though the whole crew was saved.


Serving Norway

During the summer of 1942, Næss was called for a meeting with Johan Ludwig Mowinckel, former
prime minister of Norway The prime minister of Norway ( no, statsminister, which directly translates to "minister of state") is the head of government and chief executive of Norway. The prime minister and Cabinet (consisting of all the most senior government department ...
. He was not satisfied with how
Nortraship The Norwegian Shipping and Trade Mission (Nortraship) was established in London in April 1940 to administer the Norwegian merchant fleet outside German-controlled areas. Nortraship operated some 1,000 vessels and was the largest shipping company ...
was administered and wanted Næss to manage the organisation, as he had established connections with the ''United States Maritime Commission''. In November 1942, Næss was given the position as Deputy Head of the Nortraship New York office. Næss he had to give up his job as head of the ''Viking Tanker Company'' and sell his shares in order not to have a conflict of interest. Immediately after joining ''Nortraship,'' Næss was thrown into negotiating a new tonnage agreement with his British and US counterparts, Bill Weston from the
Ministry of War Transport The Ministry of War Transport (MoWT) was a department of the British Government formed early in the Second World War to control transportation policy and resources. It was formed by merging the Ministry of Shipping and the Ministry of Transport ...
and David Scoll from the
War Shipping Administration The War Shipping Administration (WSA) was a World War II emergency war agency of the US government, tasked to purchase and operate the civilian shipping tonnage the United States needed for fighting the war. Both shipbuilding under the Maritime C ...
. The negotiations took months, and the agreement was signed on New Year's Eve 1942, and thus named the Hogmanay agreement. The agreement was to last for the rest of the war, and Næss played the inexperienced US negotiator against the British, thus landing as many benefits as he could for the Norwegians. With the tonnage agreement settled, Næss focused on the bad relationship between the main ''Nortraship'' offices, London, and New York. He initiated an exchange of reports between the offices, and made a number of visits to the London office, thus gradually improving the cooperation between them. When the war ended in 1945, Næss was asked to stay on to help liquidate Nortraship and to arrange the negotiations for new vessels replacing the ones sunk during the war. Næss stayed for another year and, together with Nortraship's representative in Washington, George O. Mejlænder, a number of vessels were secured for Norwegian owners. Næss later regretted the decision to stay on as his rivals Onassis and Niarchos got a head start on him.


Establishing the Næss group

In November 1946, after leaving Nortraship, Næss established the company ''Næss, Mejlænder & Co. Inc.'' in New York with a capital of $50,000. They quickly set up two companies in Panama, ''Nortuna Shipping Company Inc.'' and ''Norness Shipping Company Inc.'' Næss managed to secure financing from J. P. Morgan & Co. which became a pillar in the group's growth. ''Nortuna'' bought four old US general cargo ships, and two liners were ordered from '' Mitsubishi Shipbuilding & Engineering'' in
Tokyo Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and List of cities in Japan, largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, ...
, to be built by their dock in
Yokohama is the second-largest city in Japan by population and the most populous municipality of Japan. It is the capital city and the most populous city in Kanagawa Prefecture, with a 2020 population of 3.8 million. It lies on Tokyo Bay, south of T ...
. Næss made his first visit to Japan in 1949 when the country was still occupied by US forces, and the orders were the first from a foreigner after the war. In the years to come, Japanese shipyards were to deliver around 30 vessels to the Næss group. The vessels were named ''Sagura'' and ''Yama'', the latter sold just after delivery as the market was bad. That was a huge mistake as the war in Korea broke out and the demand for vessels soared. After selling the four old vessels, Næss liquidated ''Nortuna Shipping'' and concentrated on ''Norness Shipping. A''fter a slow start, he started using "Contracts of Affreightment" in a 1954 agreement with ''American Independent Oil Company'', of San Francisco. The contract stipulated that a given amount of oil was to be transported to
Houston Houston (; ) is the most populous city in Texas, the most populous city in the Southern United States, the fourth-most populous city in the United States, and the sixth-most populous city in North America, with a population of 2,304,580 i ...
, Texas from the
Persian Gulf The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a mediterranean sea in Western Asia. The bod ...
. The form of the contract gave Næss room to arrange the best possible conditions for transporting the oil, both for him and the oil company. The terms of the contract created a small sensation, and Næss was summoned for a lunch in the
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. After the
Korean War , date = {{Ubl, 25 June 1950 – 27 July 1953 (''de facto'')({{Age in years, months, weeks and days, month1=6, day1=25, year1=1950, month2=7, day2=27, year2=1953), 25 June 1950 – present (''de jure'')({{Age in years, months, weeks a ...
the market dived, but as an economist, Næss was sure the market would rise again. To realize this idea , Næss organised the "Naess Scheme Charters", where he would take other shipowners' vessels on long-term charters. The spirit behind this was pooling resources; each would do what one did best. The shipowners supplying tonnage would build, finance and manage, while Næss as the charterer would do his utmost to place the vessels. From 1954 ten vessels were chartered by ''Scandinavian American Shipping Company'' (owned 57% by ''Norness Shipping'' and 43% by the
Rockefeller family The Rockefeller family () is an American industrial, political, and banking family that owns one of the world's largest fortunes. The fortune was made in the American petroleum industry during the late 19th and early 20th centuries by brot ...
) on ''Naess Scheme Charters'', from reputed Scandinavian shipping companies, among them A. P. Møller. Næss's theory seemed to hold; although for some years the charters ran with losses, the shipping boom after 1967 ended the 15-year charters with a solid profit.


Years of explosive growth

In 1956, Næss started to order vessels that he anticipated the oil companies would need in the coming years. The basis was long-term financing from banks and insurance companies in the US and other countries. He ordered four big tankers from Japanese builders; each was around , to be delivered from September 1957 to June 1958. Within a few months all four were on long-term charter, two to
Socal Southern California (commonly shortened to SoCal) is a geographic and cultural region that generally comprises the southern portion of the U.S. state of California. It includes the Los Angeles metropolitan area, the second most populous urban ag ...
and two to
Texaco Texaco, Inc. ("The Texas Company") is an American oil brand owned and operated by Chevron Corporation. Its flagship product is its fuel "Texaco with Techron". It also owned the Havoline motor oil brand. Texaco was an independent company unt ...
. By April 1957, Næss had ordered 20 new buildings, to be delivered over the following five years. Except for three of the vessels, they were covered by long-time charters. Seven of the vessels were to be built by Japanese shipyards, due to their high quality and prompt delivery. George Mejlænder decided to start his own brokerage firm and Næss paid him out; the company name was changed to ''Næss Shipping Co. Inc.'' As the "battle of convenience flags" heated up, Næss decided to secure his position, and on the 15 November 1958, he established ''Anglo American Shipping Co. Ltd'' on
Bermuda ) , anthem = "God Save the King" , song_type = National song , song = "Hail to Bermuda" , image_map = , map_caption = , image_map2 = , mapsize2 = , map_caption2 = , subdivision_type = Sovereign state , subdivision_name = , es ...
; thus, the vessels could fly the British flag.


The flag of convenience fight

In 1958, the battle of convenience flags heated up and a boycott of ships sailing under such flags was declared by the ITF. Næss was having problems with insurance for his vessels and from a number of accusations of him being a "pirate." He was the chairman of the ''American Committee for Flags of Necessity,'' and as such, a highly visible target. He countered by registering vessels in Bermuda. The island required no taxes. He had to employ a British captain, chief engineer, and radio officer. Another benefit from using Bermuda was that quite a few charters were settled in British pounds, so using the British flag removed the currency risk. Næss also counter-charged by attending a conference with major British newspapers on 10 July 1958, where he stressed his view that flags of convenience did not need to be substandard. If the ITF encountered substandard vessels, he would support a boycott of them, Næss argued. Ships with crews paid according to standards, and with a technical standard on a line with what international regulations required, should however not be targeted.


Moving office to Bermuda

In the 1950s, Næss had offices in Nassau, Bahamas, but as he was not satisfied with the political conditions, he started searching for other options. He surveyed Panama City but found the city to be too far from New York, and it would be difficult to recruit good management there. He was advised to have a look at Bermuda, and found it favourable, so he moved his offices there. ''Anglo American Shipping Co. Ltd'' was introduced on the London Stock Exchange in November 1959, the majority of the shares owned by ''Norness Shipping'', the remainder owned by British investors and Næss's friends within New York finance. Five vessels were ordered for the company, the largest being the ''Naess Sovereign'' and ''Naess Champion''; both were around and built by Mitsubishi in
Nagasaki is the capital and the largest Cities of Japan, city of Nagasaki Prefecture on the island of Kyushu in Japan. It became the sole Nanban trade, port used for trade with the Portuguese and Dutch during the 16th through 19th centuries. The Hi ...
, Japan. When delivered in January 1961 ''Naess Sovereign'' was the third largest tanker in the world, and the largest under the British flag. To manage the vessels Næss linked up with a company in Glasgow, establishing the firm ''Næss Denholm & Co. Ltd''. For the shipping industry at large 1960 was a difficult year, with old tonnage laid up; ''Anglo American'' with its new vessels and long-time charters was an exception.


Merger and ABC with P&O

Creating ''Anglo American'' and the transfer of a number of vessels on time-charter to that company partly changed ''Norness Shipping'' to an investment company, as it held 68.5% of ''Anglo American's'' shares. As the years 1959 - 1961 were bad in the tanker market Næss placed his attention on developing large
bulk carrier A bulk carrier or bulker is a merchant ship specially designed to transport unpackaged bulk cargo — such as grains, coal, ore, steel coils, and cement — in its cargo holds. Since the first specialized bulk carrier was built in 1852, eco ...
s and arranging "affreightment" contracts for them. The focus on ''Norness Shipping'' created anxiety among ''Anglo American'' shareholders as to whether enough was being done to expand that company. This created the basis for a merger between the two companies, but that was complicated as there were serious problems connected to taxation of shareholders. The tax problem for the US ''Norness Shipping'' shareholders was solved in February 1962 and the merger talks could start in detail. The final agreement was signed on 15 December 1962; the value of Næss's original $50,000 was now $44,000,000 and the new company was named ''Anglo Norness Shipping Company Ltd.''. In 1962, Næss learned that the P&O had ordered four bulk carriers, each of around . Næss knew that this was a new area for P&O and arranged a meeting with the chairman, Sir Donald F. Anderson, whom he knew well from his Nortraship days. Næss proposed that the two companies should cooperate and pool their vessels into one joint owned company. P&O found the idea attractive and ''Associated Bulk Carriers Ltd.'' was established on 8 April 1964. The joint company was a huge success and by 1970 ''ABC'' contained 36 vessels with a total of . Part of the success was that Næss was able to persuade the more conservative P&O to order a number of OBO carriers, thus adding flexibility to the concept.


The OBO carrier

Næss was always searching for increased efficiency, and the long voyages ballasted for tankers posed an intriguing problem. In the mid of the 1950s, he started to think about a combination ship that could carry both oil and bulk cargoes. Oil and ore ships had been in operation since the 1920s, but a vessel with the capability of carrying both oil and bulk cargoes seemed impossible to construct. Næss pushed his chief naval architect T. M. Karlsen to keep researching the combined vessel, also checking in on various failed projects like the ''Mando Theodoracopulos''. One of the deficiencies of that vessel was the small hatches, too small for efficient discharging. In 1964, the Naess group started a collaboration with P&O in the form of the jointly owned company Associated Bulk Carriers, thus giving them access to P&O's vast technical department. The last hurdles were cleared under a meeting at the A. G. Weser shipyard in Bremen on 6 April 1964, and a contract for building the first combined vessel was signed. The vessel was christened 16 June 1965, as Naess Norseman. The German industrialist owning the shipyard proposed the type to be called ''Naess-type.'' Næss found it more appropriate to name it after the cargoes carried. Thus, the name for the new type was to be OBO for Oil-Bulk-Ore. The vessel performed as expected, with some 75% of the time with cargo and only 25% in ballast. The much increased time with cargo would then more than outweigh the 15% higher cost of the vessel. Adding to the versatility of the type was that the oil and bulk market often developed differently. The OBO ship could then trade with bulk cargoes when that market was on top, and change to oil when the demand for tanker tonnage was high.


Trying years and the Zapata merger

After the boom from mid 1956 to mid 1957 the shipping markets were depressed for years to come. In spite of this the ''Anglo Norness Shipping Company'' had impressive results: The cooperation with ''P&O'' in bulk carriers had started through ''Associated Bulk Carriers Ltd.'', and the battle of flags of convenience had been won. In twelve years the ''Anglo Norness'' fleet had expanded into one of the largest in the world, with 58 vessels totalling including new buildings and charters. The three years from 1964 were meagre for the Næss group. The market continued to be depressed, and the group had losses on the chartered vessels. Næss was put under considerable pressure to abandon his policy of operating in the spot market but he strongly resisted long time charters as he believed the markets would recover. Then, in June 1967 the
Six-Day War The Six-Day War (, ; ar, النكسة, , or ) or June War, also known as the 1967 Arab–Israeli War or Third Arab–Israeli War, was fought between Israel and a coalition of Arab states (primarily Egypt, Syria, and Jordan) from 5 to 10 Ju ...
erupted, and the Suez Canal closed for years to come. This created an enormous surge in demand for tanker tonnage and the Næss group was ideally positioned with 16 large tankers available, receiving extremely good rates for its vessels. With a strong financial situation Næss started thinking about the group's long-term strategy; the world economy was volatile, and there were inflationary pressure and currency problems. The company was courted by ''Occidental Petroleum Company'' and '' Zapata Offshore Company'' (founded in 1953 by George H. W. Bush), and the latter won the merger with an offer of $5 per share, valuing the company at $47.5 million. As a diversified offshore company Zapata seemed to be well positioned to take advantage of the expected boom in oil exploration and its offer was accepted in May 1968, and the company name changed to ''Zapata Norness Inc.''. Næss started as a member of the board of the new company and initiated a huge expansion program, ordering a number of ship with a total costing $163 million. As Zapata had its offices in Houston it became tedious for Næss to attend board meetings; he withdrew and his son Michael was elected in his place. By 1972 Næss grew more and more concerned over the huge volume of new buildings, he feared a collapse of the market and was thus positive when approached by ''P&O'' and
Hilmar Reksten Hilmar August Reksten (29 October 1897 – 1 July 1980) was a Norwegian shipping magnate. In the autumn of 1973 he was counted among the world's richest men, possessing a fleet worth about £300,000,000. At his death in 1980, all was lost; he ...
who offered to buy his fleet. Næss had very mixed feelings as he had been in shipping for more than 40 years, however, with his experience and background as an economist he anticipated a downturn in the market. He did not have to wait long to see his decision pay off. In July 1973 the deal was closed and ''Anglo Norness'' was sold for $208 million. Today it would equal $1.2-1.6 billion. In October the OPEC cartel quadrupled the oil price creating the 1973 oil crisis and the tanker market crashed. Næss was quite self-critical and had lambasted himself after other decisions; however, he had reasons to be proud of the perfect timing of this deal.


INTERTANKO and pollution

Even though being a staunch defender of personal initiative and unregulated business, Næss supported organisations that could solve problems specific for the business area voluntarily. The reasoning behind
INTERTANKO The International Association of Independent Tanker Owners (INTERTANKO) is a membership association for owners of independent tankers throughout the world. The Association was formed in its present guise in Oslo in 1970 to speak out for those indep ...
was to organise the independent tanker owners and solve problems particular to the tanker market. In the 1960s it was scrapping old vessels; after the 1973 oil crisis this problem surfaced again. With his large fleet of tankers Næss was a natural participant, and after being a member of the executive committee he was elected chairman in 1976. Due to the large number of new buildings the rates in 1975 gave the shipowners huge losses; some $125 million on Persian Gulf to Europe alone. Of a total tanker tonnage of close to were laid up, while an equal amount sailed with reduced speed. As the INTERTANKO president Næss concentrated on scrapping old tonnage, pollution and utilizing supertankers as floating storage tanks. Scrapping older vessels would reduce the amount of surplus tonnage, and this would then in the long run produce better rates. In trying to reduce the surplus tonnage Næss however got into arguments with the US Justice Department as they were on the verge of viewing his actions as violating the anti-trust laws. His job of promoting scrapping of old tonnage was however made easier by the grounding of the ''Argo Merchant'' off Nantucket in December 1976, a 23-year-old run-down tanker. The spillage from the grounding pushed the major US oil companies to examine the vessels they were chartering closely, thus eliminating a large group of old, badly kept vessels. As a citizen of Bermuda Næss was acutely aware of the problem with marine pollution; taking a walk on his beach he could easily spot lumps of tare that most probably came from tankers. Næss was therefore a staunch supporter of reducing oil waste as much as possible. Næss linked up with the Norwegian explorer
Thor Heyerdahl Thor Heyerdahl KStJ (; 6 October 1914 – 18 April 2002) was a Norwegian adventurer and ethnographer with a background in zoology, botany and geography. Heyerdahl is notable for his ''Kon-Tiki'' expedition in 1947, in which he sailed 8,000& ...
who had himself witnessed the increased pollution during his expeditions. Næss pushed forward various recommendations that INTERTANKO then took to the International Maritime Organization (IMO), the UN organisation responsible for improving maritime safety and to prevent marine pollution.


Retirement

Næss settled in Bermuda, buying land and building a hotel, but well into his old age, seemed always on the lookout for a good deal that could have him started again in shipping. He made generous donations to
Bergen Bergen (), historically Bjørgvin, is a city and municipality in Vestland county on the west coast of Norway. , its population is roughly 285,900. Bergen is the second-largest city in Norway. The municipality covers and is on the peninsula o ...
, especially the museum documenting the old hanseatic influence on the city. His personal lifestyle was frugal, a striking contrast to his shipowner colleagues who kept large yachts and mansions. He loved gardening, and guests at his hotel sometimes took pity on the old guy having to work in the garden, giving him a dollar as they passed by.


References

*Næss, Erling Dekke (1972) ''The great PanLibHon controversy: The fight over the flags of shipping''. Gower Press. Aldershot, Hampshire, England, UK. *Næss, Erling Dekke (1977) ''Autobiography of a shipping man''. Seatrade Publications Ltd. Colchester, England, UK. *Thowsen, Atle (1992) ''Handelsflåten i krig 1939 - 1945, Nortraship, profitt og patriotime''. Grøndahl og Dreyers Forlag A/S. Oslo, Norway * Mossige, Erling (1989) ''Storrederiet Nortraship - Handelsflåten i krig''. Grøndahl & Søn Forlag AS. Oslo, Norway *The Protocol of 1978 Relating to the International Convention for the Prevention of Pollution From Ships, 1973 -
MARPOL 73/78 The International Convention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of 1978, or "MARPOL 73/78" is one of the most important international marine environmental conventions. MARPOL 73/78, MARPOL is an amalg ...


External links


The whale hunting museum in Sandefjord, NorwayIntertanko, independent tankers organisation, Næss was the president of the organisation from 1976 - 1979The ITF flag of convenience campaignBryggen Museum in Bergen - Næss donated to establish it
{{DEFAULTSORT:Naess, Erling Dekke 1901 births 1993 deaths Alumni of the London School of Economics Nortraship people Businesspeople from Bergen in shipping Place of death missing