Dead reckoning

On the night of 22 October 1707, HMS Association and three other Royal Navy warships were on the last leg of a voyage from Gibraltar, heading for Portsmouth.

The ships had been navigating by dead reckoning — the method of projecting forward from a last known, fixed position using speed, heading, and elapsed time to deduce current location. The technique is sound in principle, but danger lies in the risk of cumulative error, with a small deviation at the start of a voyage compounding over time. The vessels had been underway for over a thousand miles without a reliable fix, and the gap between where their calculations said they were and where they actually were had grown to a hundred miles. Just after 8pm, all four ships struck rocks off the Scilly Isles. Only 26 of 1,647 crew survived. Many commercial vessels perished in similar fashion, and seven years later parliament passed the Longitude Act of 1714, establishing a prize worth £6m in today’s money to solve the puzzle of establishing longitude aboard ship, and thus eliminate the need for navigation by dead reckoning.

Britain’s relationship with the sea is not an abstract one — as an Island nation it could never be so — and our ships and seafaring ability led us to dominate the globe. Our empire is remembered as a product of national vision and lofty ambition, but in reality it was built by working men in genuine peril — sailors who toiled across vast distances in small ships with leaking hulls, on rotting provisions, through waters that offered no margin for error. Sometimes these voyages ended in tragedy, but those that did not generated unprecedented wealth. At the height of empire, British-registered vessels carried something close to half of all the world’s seaborne trade.

The East India Company’s Indiamen were the workhorses of the merchant fleet, carrying spices and textiles across global trade routes for nearly two centuries. The Royal Navy may get the histories and the films, but it was the merchant fleet that carried the cargoes that made the empire a cost worth bearing. The City of London grew rich processing the transactions those ships made possible. The insurance market at Lloyd’s, the commodity exchanges, the banks that financed the voyages — all of it was a consequence of the fact that British ships were moving British (and other nations’) goods across every ocean on the planet.

That dominance has long since vanished, along with the institutional knowledge, the technical capacity, and the cultural identity that sustained it. What remains is a key part of shipping, but key in the way that back-office functions are. London still has the legal infrastructure, the insurance market, the financial architecture of global shipping, but they are serving ships that fly other nations’ flags. In short, we have gone from leading an industry of our own, to administering an industry on behalf others. 

Before arriving at how that happened, it is worth establishing what ships — and the cargoes they carries — do for the world. 

International trade is the most consequential collective human activity of the last century. It is measured by the only metric that ultimately matters: human lives improved. Since 1990, more than 1.5 billion people have been lifted out of extreme poverty. In 1990, 2.3 billion people — more than a third of the world’s population — lived below the poverty line. Today that number stands at around 800 million. That transformation was not driven by aid but by trade: factories in Guangdong, Shanghai and Tianjin making things that people in Birmingham and Boston and Berlin wanted to buy, connected to those markets by container ships. The shipping container is the reason your television is cheap; it is also, less obviously, the reason that on and a half billion people are no longer poor. Shipping did not cause that transformation on its own, but without cheap shipping and containerisation, it could not have happened.

Walk around any room in your house and identify what did not arrive by sea. It is harder than it sounds. Your flat-pack furniture, your television, your clothes, your coffee, the medicine in your cabinet, the grain in your bread — all of it came by ship.

We are uniquely dependent on maritime imports

The UK produces around 60 per cent of its food by value but imports eighty-five per cent of its fruit, half its vegetables, and virtually all its vegetable oils, rice, coffee and tea — and that figure excludes the imported fertiliser and feed without which much of what we nominally grow could not be grown at all. Fifty-seven per cent of the gas we do not produce ourselves arrives as LNG on ships, held in storage covering only ten to sixteen days of national demand — the lowest ratio of any major European economy. We are uniquely dependent on maritime imports.

The cessation of maritime trade would be almost uniquely destructive. Within days fresh produce would vanish from shelves. Within weeks gas pressure would fall and medicines run short. Domestic travel would become impossible as fuel runs out. Within months the agricultural system itself would begin to fail as imported fertiliser and feed it requires runs out.

A nuclear strike on London would be catastrophic, but in terms of the country’s ability to function as a whole, it would be more recoverable.

How maritime disruption cascades so quickly into societal failure is a function of what shipping actually is: it is not one industry but several smaller ones, each a real-time barometer of a different layer of global economic activity. Dry bulk carriers move the raw materials of manufacturing and infrastructure provision — iron ore, coal, grain, fertiliser. The cost of chartering them is measured by the Baltic Dry Index, one of the most reliable leading indicators of industrial confidence available: that data arrives in the freight market months before the same signal shows up in GDP data. When it falls sharply, someone somewhere has stopped ordering the inputs needed to make things. Container ships carry the finished goods those inputs eventually become, and the Harpex container rate index is a good short-run measure of consumer confidence: rates only hold when someone expects to sell what they are shipping. Tankers move the energy that powers much of what we do, and their spot charter rates are acutely sensitive to geopolitical chokepoints — Hormuz, Suez, the Bab el-Mandeb. Gas carriers move the fuel that heats homes and generates power, their cryogenic cargoes requiring specialist crews and billion-dollar terminal infrastructure at both ends. Taken together, these markets do not merely reflect global trade — they effectively are global trade, with supply and demand visible in real time via public price data.

Britain built much of that system, and for two centuries sat at its centre. In 1975 it still operated 1,614 merchant vessels totalling fifty million deadweight tonnes — a post-war peak, and a figure that placed the UK among the world’s leading maritime nations. Behind those vessels sat an ecosystem of owner-operators: P&O, Ocean Steamship, Furness Withy, Ellerman Lines, Andrew Weir’s Bank Line, Ben Line, the British and Commonwealth Shipping group, and the captive fleets of the oil majors.These were the institutional embodiment of a national maritime culture employing British officers, crewed by British ratings, managed from British offices, insured at Lloyd’s, and generating the distributed knowledge of global trade that filtered back into port cities, newspaper offices, and government departments.

The collapse was not gradual. By 1982 the fleet had fallen to thirty-two million deadweight tonnes — a near-fifty per cent reduction in seven years. Britain was losing roughly two ships a week. Several factors lay behind this decline: flag-of-convenience competition that undercut British crewing costs, the container revolution that concentrated liner capacity into a small number of mega-operators, the collapse of the tanker market after 1973, and the general retreat of British institutional capital from any business where the returns were long-cycle and the risks were physical.

The corporate names tell the story plainly. Furness Withy — which had accumulated Royal Mail Lines, Shaw Savill, Houlder Brothers, and others into a substantial British shipping group — was sold to C. Y. Tung of Hong Kong in 1980. P&O merged its container operations with Nedlloyd in 1996; the combined entity was acquired by Maersk, a Danish company, in 2005. Ellerman Lines was broken up in the mid-1980s. Ben Line ceased deep-sea operations. The Bank Line was sold to Swire in 2003 and closed in 2009. British and Commonwealth pivoted to financial services and left the sea entirely. Each of these transactions passed without public comment, without parliamentary debate and without ministerial intervention.

When Kraft acquired Cadbury in 2010, the exact opposite happened: parliament convened, ministers warned publicly against asset-stripping and the takeover panel rewrote its rules. The nation, it turned out, had strong views about who owned its chocolate. It had no views at all about who owned its ships — or what it meant that the the owners were “anyone but the British”.

The skills that sustained it will not come back without a political decision that nobody, so far, has shown the remotest inclination to make

Other maritime nations did not follow this path. In Greece and Norway, shipping is not an industry but a culture — graduates enter a world their families have inhabited for generations, and the knowledge is self-sustaining. Britain has the educational institutions: Strathclyde, Warsash at Solent, Newcastle, but it has lost the culture that made them matter. That culture was dismantled in a mere fifteen years, and the skills that sustained it will not come back without a political decision that nobody, so far, has shown the remotest inclination to make.

Approaching the edge of British waters on that night of 22 October 1707, one man got it right. The master of one of the other ships correctly judged that the fleet was not west of Ushant but already dangerously close to the Scillies. He said so, but was overruled. Four ships and 1,647 men were lost.

Britain has now, as we did back on the 1970’s and 80’s, no shortage of people who can read the situation. What it has lacked, at every stage of its maritime decline, is the institutional will to act on the reading. That will existed for Cadbury, but it has never existed for a fleet (and an industry) that made us nationally wealthy in a way nothing since has. The sailors who ate salt beef and navigated in the dark so that Britain could trade with the world deserved better than they got.