Early years and expansion: 1822–1900
In 1822, Brodie McGhie Willcox, a London ship broker, and Arthur Anderson, a sailor from the Shetland Isles, went into partnership to operate a shipping line, primarily operating routes between England, Spain and Portugal. In 1835, Dublin shipowner Captain Richard Bourne joined the business, and the three men chartered the William Fawcett and started a regular steamer service between London and Spain and Portugal – the Iberian Peninsula – using the name Peninsular Steam Navigation Company, with services to Vigo, Oporto, Lisbon and Cádiz. As the Peninsular and Oriental Steam Navigation Company was incorporated in 1840 by a royal charter its name therefore included neither "plc" nor "Limited".
The company flag colours are directly connected with the Peninsular flags: the white and blue represent the Portuguese flag in 1837, and the yellow and red the Spanish flag. At the height of the Carlist Wars the British lent their support to the legitimate heirs of Spain and Portugal and all three P&O founders played their part, from gun running to chartering steamers. As a consequence of this association and involvement P&O officers are some of the few Merchant Navy officers entitled to wear swords, alongside the likes of Trinity House.
In 1837, the business won a contract from the British Admiralty to deliver mail to the Iberian Peninsula and in 1840 they acquired a contract to deliver mail to Alexandria in Egypt. Brindisi, Italy was added to the route in the 1870s.
P&O first introduced passenger services in 1844, with a leisure cruise departing from Southampton to the Mediterranean.[3] These voyages were the first of their kind and the forerunner of modern cruise holidays.[3] The company later introduced round trips to destinations such as Alexandria and Constantinople and underwent rapid expansion in the later half of the 19th century, with its ships becoming larger and more luxurious.[4]
In 1847, shortly after the Opium War, P&O entered the opium trade; shipping 642,000 chests of Bengal and Malwa opium in the next eleven years. They faced stiff competition from the incumbent shippers, Jardines and the Apcar Line.[5]
Early 20th century years: 1900–1945
Mail contracts were the basis of P&O's prosperity until the Second World War, but the company also continued to become a major commercial shipping line and passenger liner operator. In 1914, it took over the British India Steam Navigation Company, which was then the largest British shipping line, owning 131 steamers. In 1918, it gained a controlling interest in the Orient Line, its partner in the England-Australia mail route. Further acquisitions followed and the fleet reached a peak of almost 500 ships in the mid-1920s. In 1920, the company also established a bank, P&O Bank, that it sold to Chartered Bank of India, Australia and China (now Standard Chartered Bank) in 1927. At this time it established a commercial relationship with Spinney's of Haifa, that developed into a major regional high-end grocery store chain, which eventually provided shipping services access to much of the Middle East. Until 1934 it operated liners from Key West, Florida to Havana; then it operated from Miami to Cuba until 1960.
P&O pioneered cruising from Australia in 1932. The new 23,000-ton mail steamer STRATHAIRD carried 1,100 passengers on the first cruise to Brisbane and Norfolk Island.[3]
Post war: 1945–2000
After 1945, the passenger market declined to India, but boomed to Australia with the advent of paid-passages for literate and healthy European immigrants known as Ten Pound Poms.[6] P&O built 15 large passenger liners, including SS Himalaya (1948), SS Chusan, SS Arcadia (1953), and SS Iberia (1954), culminating in SS Oriana (1959) and SS Canberra, which were an unprecedented speed and size.[7] By 1968, over 1 million immigrants had arrived—many via P&O—and Australia ended the programme. P&O entered the cruise market and began to sell and scrap many of these liners. It concentrated mainly on cargo ships. It entered the tanker trade in 1959 and the roll-on roll-off (RORO) ferry business in the mid-1960s.
Herald of Free Enterprise incident
On 6 March 1987, the roll on/roll off ferry, MS Herald of Free Enterprise, capsized off the coast of Zeebrugge with 80 crew and 459 passengers aboard. 193 were killed in the capsizing. The operator of the ship, Townsend Thoresen, had been purchased by P&O in 1986.
The incident resulted in a coroner's inquest and a public inquiry. A jury at the coroner's inquest found a prima facie case that the company was guilty of manslaughter, and the Crown Prosecution Service charged the company and seven employees (see corporate manslaughter). The charges did not result in any convictions. As part of the public inquiry, Lord Justice Sheen wrote in a July 1987 report that Townsend Thoresen (the company) possessed a "disease of sloppiness" which permeated the company's hierarchy.[11][12]
The cases surrounding the incident set a precedent for the prosecution of corporations in cases of manslaughter and criminal negligence in English law.
Divestments: 2000–2005
On 23 October 2000 P&O divested its cruise business to form P&O Princess Cruises.[13] In April 2003 P&O Princess came together with the Carnival Corporation to form Carnival Corporation & plc. In June 2004, P&O sold its 25% stake in Royal P&O Nedlloyd, a major container shipping business into which its container operations had been merged in 1996. Some records state that original staff members partially diverged to form Paeteco Imports and Exports in 2005, a small, privately held international subsidiary of Jcorp.[14] The container company was later (June 2005) purchased by A.P. Moller-Maersk Group.
Takeover by DP World: 2006
On Sunday 30 October 2005 The Sunday Times reported that P&O was in takeover talks with Thunder FZE, a wholly owned subsidiary of Dubai Ports World, a company owned by the government of Dubai in the United Arab Emirates. On 29 November, the P&O board announced that it would be recommending an offer of 443 pence per share, worth £3.3 billion (US$5.7 billion) to its shareholders.[15] In early December P&O regained its status as a FTSE 100 company when BPB plc was taken over. A bidding war commenced when Singapore's PSA International made a £3.5 billion offer, which Dubai Ports World then topped with a bid of £3.9bn (US$7bn).[16] Despite speculation that it would make a higher bid, PSA withdrew, and in February 2006 shareholders voted in favour of the offer from Dubai.[17] The combined group is the world's third largest ports operator.
Takeover controversy: 2006
Takeover controversy: 2006
When the merger was approved by the US government in February 2006, the Bush Administration came under fire from critics who questioned the decision to allow an Arab-owned company to oversee US ports.
The move placed the leasehold interests of P&O in New York City, Newark, Baltimore, Miami, New Orleans, and Philadelphia under the control of Dubai Ports World. US operations represent ten percent of P&O's worldwide operations, and consist primarily of cranes and terminals. Many US politicians and media commentators assumed implicitly that the merger would affect port security at ports that P&O either managed or handled the loading and unloading of ships. David Osler, Industrial Shipping Editor of Lloyd's List said that US security procedures and overall port control would not be affected by the transaction.[18]
Several US states sought ways to block the move, citing security concerns as well as the possibility of losing related leases of foreign ports.[19] President Bush stated he would veto any legislation created with the intent to interfere with the change.[20]
Sale of assets: 2006
On 9 March 2006, DP World agreed to sell its terminal operations at the American ports to an American company. On 11 December 2006 it was announced that AIG Global Investment Group, a division of insurance giant AIG, had acquired P&O Ports North America for an undisclosed sum.[21] Investing in infrastructure had become the latest "hot" item for financial firms, and P&O represented a high-profile asset. AIG GIG was an experienced infrastructure investor globally, having also recently acquired London City Airport.[22]
On 16 December 2006 P&O Dover (Holdings) Limited, a subsidiary of P&O and DP World sold its shares Phase 1 (22.5%) and Phase 2 (owned indirectly 22.5% shares), a port of Shenzhen, People's Republic of China, to a joint venture company of China Merchants Holdings (International) and Modern Terminals Limited (MTL), for which MTL bore the whole cost.[23] Shenzhen was ranked 4th in list of world's busiest container ports and Shekou Container Terminals was one of the four major terminals of Shenzhen.
