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 in the world and is credited for 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. The Norwegian countercharge was that British commercial interests were disguised as wartime needs.
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.
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."1 To protect the Norwegian neutrality, the agreement was negotiated between the British government and the Norwegian Shipowners Association.
These negotiations showed the dual nature of the Norwegian merchant fleet; it was a huge asset, but also vital for both the belligerent factions. In order to safeguard Norwegian neutrality, but at the same time maintain the close commercial relationship with Britain one had to thread carefully. Norway's policy during World War I had been labeled the silent ally and the Norwegian government wanted to continue along the same line in World War II.
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 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 in London. Through radio the Germans and their Norwegian collaborator, Vidkun Quisling, tried to order Norwegian vessels to sail for German controlled waters, but this was ignored by Norwegian masters.
To counter German pressure 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. The British government wanted to take control over the Norwegian vessels, while Norwegian shipping professionals in London favoured an independent Norwegian organisation. The issue had to be decided by the Norwegian government; it was however difficult to communicate with it as the government was fleeing the advancing German forces.
On April 16 it was held a meeting of Norwegian shipping professionals in the Norwegian chamber of commerce in London, where a detailed plan for an 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 the City and the following day, April 20 the first shipping experts moved in at 144 Leadenhall Street.
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 Øivind Lorentzen, Norwegian minister of Shipping. By this act the largest shipping company in the world was created, with more than 1.000 vessels and around 30.000 seamen.
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 severe lack of qualified personnel, and the ones available were often vocal, determined and used to work as independents. 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, Tromsø) declared by law 18 May 1940 that Øivind 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 (Det Norske Veritas) main office. On 28 May 1940 Øivind 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).
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") were 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 Øivind 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 that was located at 80 Broad Street, Manhattan.
Øivind 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 (whaling ships not included).
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 anticipated 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 Øivind 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 on 18 February 1941 "The Norwegian Shipowners Conference in America" was established; 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 Øivind Lorentzen also having ships 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.
More crewing problems
During the summer and autumn of 1940 ship losses catapulted, from 9 April to 30 December 1940 Nortraship lost 96 vessels and hundreds of seamean, almost all in the North Atlantic trade. This resulted in an increasing number of Norwegian seamen taking landbased work in the US, or changed to other countries ships running in less dangerous areas. This created a shortage of seamen that was a huge challenge for Nortraship and the Norwegian exile government.
From the seamen's organisations it was argued that the only effective remedy would be higher wages. This resulted in wage negotiations started in London, June 1941 that were concluded in a new and significantly higher wages agreement from 1 September 1941. The British government was highly critical but Nortraship and the Norwegian government's view was that it was impossible to withstand the seamen's demand. A second round of negotiations was concluded in an agreement effective 1 December 1942, with yet higher wages, this one was to last for the rest of the war.
The war's need for strict discipline created other problems not easily solved. Even though the Norwegian exile government as early as 12 July 1940 decreed that all Norwegian citizens above 18 had to register and take assigned work this legislation was difficult to enforce as it had no jurisdiction in the UK and no courts. This was facilitated by a law by the British government of 22 May 1941, the Allied Powers Maritime Courts Act which gave allied governments the possibility to establish their own courts on British soil, where all but the most severe cases could be tried.
Seaman and vessel safety
The biggest threat to the vessels were the Axis submarines, although mines, surface raiders and bombing from aircraft were also much feared. The main countermeasure was convoying, large groups of merchant vessels, from 20 to 100, protected by naval ships. In 1940 the Norwegian vessels were unarmed, but slowly defensive measures like guns against surfaced submarines and low flying aircraft were added. By the spring of 1945 around 1,700 men were registered as gunners on Norwegian vessels, in addition there were some 900 British gunners.
The vessels also got degaussing against magnetic mines, and seamen were issued watertight survival suits if the ship had to be abandoned. An important part of security was strict secrecy regarding routes and destinations as made famous in the slogan "Loose lips sinks ships". Despite these and other measures losses were high; of a total of about 30,000 Norwegian seamen 3,670 lost their lives together with 977 foreign crewmen due to the war at sea. 706 ships were lost to enemy action.
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 were 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.
Tankers with clean/dirty oil and spare decks
Before the age of specialized supertankers the vessels could take "clean" oil, "dirty" - or change between them. The "clean" oil would be refined, as gasoline, while "dirty" was unrefined crude oil or heavy oil. A vessel only carrying "clean" oil would deteriorate quicker, and so it was an ongoing fight from both Nortraship offices to get as many "dirty" cargoes as possible. Nortraship had a tough adversary in the British Ministry of War Transport as they produced statistics showing that British vessels were carrying more "clean" cargoes than the Norwegians' did. The US War Shipping Administration was more accommodating in this issue and let several Norwegian vessels change to "dirty" cargoes.
In peacetime it's very rare, if it at all happens that a tanker takes deck cargo. The war changed this as there was a huge demand for transporting large pieces of war equipment from the US to Europe and other war theatres. It was quickly figured out that tankers had large uncluttered deck areas that could be used for volume cargoes, like airplanes and trucks. For this the tankers had to be equipped with so-called "spar decks" where the cargo could be secured. On 1 January 1944 a total of 58 Norwegian tankers were equipped to take deck cargo. The installation of the "spar decks" were paid for by the UK and Nortraship did not ask any payment for it, as the charter for the oil cargo already covered the costs.
The United States enters 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 Næss had a hard fight to protect Norwegian interests.
When Norway was dragged into the war Norwegian sailors had significantly higher wages than other Allied sailors. The British government feared this could have negative influence on the other Allied sailors and pressed for wage reduction. In the summer of 1940 an agreement was signed, where the wage difference would be placed in a special fund, to be used for the Norwegian war sailors after the war. As the war ended, the fund was some 43 million NOK.
A vocal minority with its spokesman Leif Vetlesen argued for the money to be paid directly to the sailors, and not distributed as assistance to needed seamen and seamen's widows, as the government and the seamen's organisations proposed. It became a lengthy legal process that the government won in the Norwegian supreme court in February 1954. This created much bitterness, and the issue was not permanently solved until the Norwegian Parliament in 1972 decided to pay a ex gratia sum, a total of 155 million NOK. With this all seamen or their surviving relatives received 180 NOK per month sailed. Instrumental in solving this protracted case was Rear Admiral Thore Horve, himself a veteran from the war.
As a huge organisation, with tens of thousand of people working around the world during 5 years of war its not strange that there were internal problems. The main were between the offices in New York and London, each led by determined shipowners; Øivind Lorentzen and Ingolf Hysing Olsen. A special case was the various intrigues by Hilmar Reksten, as he worked at both offices. Reksten got into trouble with Hysing Olsen already when Reksten arrived London in April 1940, as he wrongly got an insurance settlement from one of his ships transferred to his accounts; this was according to the requisition to be handled by Nortraship. Reksten was indeed a highly competent shipping man, but after allying himself with various of the Nortraship leaders he was in the end sidelined and expelled from the organisation.
Other problems was created by Arne Sunde, Minister of Provisioning in the Norwegian exile government from autumn 1940 and Minister of Shipping from 1942. Supported by his protegee Reksten he had various attempts to micromanage the two main Nortraship offices, which were in turn repudiated either by the powerful foreign minister Trygve Lie or the prime minister Johan Nygaardsvold.
After 1945 and Nortraship today
When World War II ended in 1945 Nortraship's main task was over, even though the final settlement was not done until 1964. Immediately after the hostilities in Europe ended Nortraship had a very busy period, its work was governed by the Allied United Maritime Authority that was tasked to control all international shipping until the transition period after the war ended. Nortraships's requisition of Norwegian ships ended 30 September 1945 and as the various shipowners took charge of their vessels Nortraship started the huge work to liquidate the organisation; which involved settling various claims, paying compensation for vessels etc. The original Nortraship organisation was terminated 30 July 1958 and its remaining tasks were transferred to the trade department.
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, Norway's exile government had sound financials and the basis was maintained for continued Norwegian shipping after the war. As the final report was represented in the Norwegian parliament in 1964 by Minister Trygve Lie the total financial contribution from Nortraship to the Norwegian society during and after the war was 1,219,000 NOK.
During the Cold War the Nortraship name was used for the organisation that were to run the Norwegian fleet, if there would be a war. When the Cold War ended in 1991 the organisation was dissolved.
The Nortraship name again came to use after 9/11 as the Norwegian Shipowners Association established a contingency committee on 1 January 2002. It has seven members, six civilians from various parts of the Norwegian maritime industry and one from the department of defence.