Peninsular and Oriental Steam Navigation Company
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| P&O Steam Navigation Co. | |
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| Type of Company | a DP World company |
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| Founded | 1837 |
| Headquarters | London |
| Key people | Sir John Parker (Chairman) Robert Woods (CEO) |
| Industry | Transport |
| Products | Ferries, port services, logistics services, real estate: |
| Revenue |  £2.40 billion GBP (2004) |
| Employees | 22,038 (2004) |
| Slogan | "Unknown" |
| Website | pogroup.com/ |
- The P&O Cruises brand is not owned by the Peninsular and Oriental Steam Navigation Company. For more information, see Carnival Corporation & Plc.
The Peninsular and Oriental Steam Navigation Company, which is usually known as P&O, is a British shipping and logistics company which dates from the early 19th century. Its head office is in London. In March 2006 it was sold to Dubai Ports World for £3.9 billion. Prior to its takeover, it was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index.
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[edit] Current organisation
P&O's interests are as follows:
- P&O Ports — A major global container port operator
- P&O Ferries — The largest ferry operator in the United Kingdom
- P&O Cold Logistics. — An international cold logistics business (freezing, handling and storage)
- P&O Property — Minor property development interests.
[edit] History
In 1822 Brodie McGhie Wilcox, a London ship broker, and Arthur Anderson, a Scottish sailor, went into partnership to operate a shipping line, primarily operating routes between England and Spain and Portugal. In 1835 a Dublin shipowner named Captain Richard Bourne joined the business and the three men 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.
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.
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. The present company, the Peninsular and Oriental Steam Navigation Company was incorporated in that year by a Royal Charter, and its name therefore includes neither "Plc" nor "Limited".
Mail contracts were to be the basis of P&O's prosperity until the Second World War, but the company also became 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. 85 of the company's ships were sunk in the First World War and 179 in the Second World War.
[edit] Post war
After 1945 the passenger market declined. P&O entered the cruise market, but 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. It was also a pioneer of container shipping, as a member of a four company consortium that founded Overseas Containers Limited (OCL). By the early 1980s it had converted all of its dry cargo liner routes to container operations and in 1986 it bought out the remaining OCL partners, renaming the operation P&O Containers Limited (P&OCL). P&OCL was merged with Nedlloyd in 1996 to form P&O Nedlloyd.
In 1975 P&O established Pandoro for operation of the company's Irish Sea RORO routes. Pandoro was an acronym for P AND O ROro. In 1998 P&O European Ferries (Irish Sea) Ltd was formed by the internal merger of Pandoro Ltd. and P&O European (Felixstowe) Ltd., to run the Irish Sea routes.
In 1987 P&O took over the European Ferries Group which traded as Townsend Thoresen and renamed the company P&O European Ferries.
Over the last quarter of the Twentieth Century P&O also diversified into construction management (through the Bovis companies, which it owned from 1974 to 1999), property investment and development, and a variety of service businesses including exhibition and conference centres, but most of these activities were disposed of following the company's decision in March 1999 to concentrate on its maritime and transport interests. Its P&O Ports and P&O Cold Logistics divisions both developed from P&O's operations in Australia, where it has a leading position in both of these fields.
Fastcraft is the name given to a service implement by shipping company P&O after the split-up of P&O European Ferries in 1998. The first ship was called Superstar Express (entered service in 1998) and sailed alongside the Pride of Cherbourg and Pride of Hampshire to Cherbourg and back. There were decisions to have another one in the next six years.
[edit] M/S Herald of Free Enterprise incident
On 6 March 1987, the roll on/roll off ferry, M/S 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 P&O possessed a "disease of sloppiness" which permeated the company's hierarchy. [1]
The cases surrounding the incident set a precedent for the prosecution of corporations in cases of manslaughter and criminal negligence in English law.
[edit] Ships
In the early 1970's P&O took over British India, Strick Line and Haines Norse, amongst several other lines. The BI ships were renamed Strath*M* (Strathmore Strathmuir, Strathmay etc), the Strick line ships renamed Strath*A* (Strathanna, Strathard, Strathattrick (the big "A") etc) and the Haines Norse ships Strath*T* (Strathtruim, Strathtay etc). BI ships had air conditioning, the Strick line and Haines Norse didn't, but they were sent to the Gulf anyway. They were murder, with officers and wives sleeping on the floor in the bar since it was the only place with air-con. They were built to go UK - New Zealand, not the Gulf!
The newest ships were the Strath*D*s (Strathduns etc) were SD14's from Newcastle and were cheap rubbish. P&O also purchased 6 ships from Japan (the Strath*e*s referred to above) but they kept falling apart. P&O sold them and sacked their crews.
[edit] Demergers
On October 23, 2000 P&O demerged its cruise business P&O Princess Cruises plc. 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. The container company was later (June 2005) purchased by A.P. Moller-Maersk Group.
The operating profit for 2004 was £268.3 million.
[edit] Takeover by DP World
Main article: DP World controversy
On Sunday October 30, 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 November 29, 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 [2]. Ironically 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) [3]. Despite speculation that it would make a higher bid, PSA withdrew, and in February 2006 shareholders voted in favour of the offer from Dubai [4]. The combined group is the world's third largest ports operator.
[edit] Controversy
When the merger was approved by the U.S. federal 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 world-wide operations and consist primarily of cranes and terminals.
Many U.S. politicians and media commentators assumed implicitly that the merger would affect port security at ports P&O managed or did stevedoring.
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, according to . [5]
Several U.S. states sought ways to block the move, citing security concerns as well as the possibility of losing related leases of foreign ports. [6]
President Bush stated he would veto any legislation created with the intent to interfere with the change. [7]
[edit] Sale of North American Assets
On March 9th, 2006, DP World agreed to sell its terminal operations at the American ports to an American company. On December 11th, 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. [8] Investing in infrastructure has become the latest "hot" item for financial firms, and P&O represented a high-profile asset. AIG GIG is an experienced infrastructure investor globally, having also recently acquired the London City Airport. [9]
