In Part 1 of this article, the history of Pacific Mail Steamship Company (a predecessor of American President Lines) was profiled. Its other owners are profiled in Part 2.
Dollar Shipping Company
Born in Scotland and raised in Canada, Captain Robert Dollar was a successful lumber merchant in British Columbia. He bought his first ship in 1893 after unsuccessfully seeking regular service to move lumber from the Pacific Northwest to California.
A few years later, Dollar founded the Dollar Steamship Company (commonly referred to as the “Dollar Line”) on August 12, 1900. The Dollar Line soon had a large fleet of schooners that were used to transport lumber from northern California and Oregon to markets in southern and central California.
(Image: timetableimages.com)
Dollar sailed to Asia for the first time on a Pacific Mail ship in 1902. He wanted to explore potential lumber markets in Asia. He acquired several ships and began trans-Pacific shipping with a chartered voyage to Yokohama, Japan and the Philippines, which was his entry into international shipping.
During World War I, Dollar ordered the construction of multiple ships in China for $30 million.
In 1921, Dollar acquired the Pacific Mail Steamship Company, which had been having severe financial difficulties. The next year the Dollar Line acquired the Admiral Oriental Line; it was renamed the American Mail Line.
Dollar then purchased seven liners in 1923 from the US Shipping Board that helped him begin his round-the-world service. The seven ships were named after U.S. presidents, a tradition that Dollar Shipping continued until the company’s end. The first Dollar Line departure of this type was the President Harrison on January 5, 1924.
In 1925 Dollar bought eight more “President Type” liners from the Shipping Board, which had been run previously by Pacific Mail.
The Dollar Line continued its expansion in the mid-1920s. It bought five more President Type ships in 1926. That year, over 45,000 passengers sailed on Dollar Line ships. Dollar encouraged others to invest in Asia, which helped open Asia to 20th-century industry. In addition, the Merchant Marine Act of 1928 (also known as the Jones-White Act) helped Dollar Line. It led to a lucrative new mail contract, which required the company to order new ships to meet demand.
The company was renamed the Dollar Steamship Line in 1929. Then, as the Wall Street Crash of 1929 was beginning, Dollar ordered two steam turbo-electric ocean liners. The two ships were the largest built for a U.S. shipping company up until that time. The SS President Hoover was launched in 1930 and the SS President Coolidge was launched the following year. Although they were state-of-the-art luxury liners, the Great Depression was taking its toll; the ships “carried only half their capacity on their maiden voyages.”
At 88, Robert Dollar died on May 16, 1932. His son, Robert Stanley Dollar, succeeded him as the head of the company. However, the company began a steady decline, due in part to increased operating costs. Then in December 1937 the President Hoover ran aground off the coast of Taiwan; the seven-year old ship was written off as a total loss. The company was $7 million in debt by 1938, and interest on its debt increased by $80,000 daily. In June 1938 the President Coolidge was seized under admiralty law in San Francisco for an unpaid debt.
Dollar Steamship Lines had expanded its services in the 1925-38 period. By 1938, however, the combined impacts of the Great Depression and its debt load (most of which was due to the expansion of its fleet) meant that the company was on the brink of bankruptcy.
That led the Federal Maritime Commission (FMC) to arrange a subsidy to keep the company solvent; in August 1938, the FMC released the company from its debt in return for 90% of the company’s common stock. All this was done because the services of Dollar Steamship Lines were considered vital to the interests of the U.S. in light of the rise of fascism in Europe and the Sino-Japanese war in the Far East.
William Gibbs McAdoo was appointed as the company’s new president. The Dollar Steamship Line was renamed the “American President Lines” (or APL) on November 1, 1938, and the American Mail Line was sold to R.J. Reynolds.
Dollar Steamship, which had been a major player in American shipping, slipped into maritime history.
APL in World War II
The U.S. government had commissioned 16 new ships for APL by 1940, and continued naming the ships after presidents. The U.S. entered World War II on December 8, 1941, and the War Shipping Administration was created in 1942. APL was an agent for the War Shipping Administration, managing some of the Administration’s ships, “maintaining and overhauling them, crewing them and being responsible for the handling of cargo and passengers.” APL’s ships also were used for the war effort, in addition to the hundreds of Liberty and Victory ships that were built. An additional 16 ships were built specifically for APL in 1944.
(Photo: http://www.usmm.org)
APL’s fleet saw service activity during World War II; several ships were sold to the U.S. Navy for troop transports and others operated as Liberty ships, transporting materiel for the war effort.
R. Stanley Dollar initiated court proceedings in 1945 in an attempt to regain the company. The case lasted seven years, and the government continued to operate APL during that time. The company renewed its round-the-world passenger service, and launched the SS President Cleveland and SS President Wilson, which were advertised as “your American hotel abroad.”
The company continued to expand, building 11 ships between 1952 and 1954. These included cargo ships as well as passenger ships. The Dollar case was also resolved – but the Dollar family did not win control of the company.
Ralph K. Davies, a former Standard Oil of California executive, had begun buying shares in American President Lines in 1944. By 1952, he owned 11% of the company’s outstanding shares and was its largest minority shareholder. On October 29, 1952, Davies and a group of investors outbid two other investor groups (including one led by R. Stanley Dollar) and paid $18.3 million for the FMC’s controlling interest in the company.
Davies was named APL chairman (he held the position until 1971), and he merged APL with Natomas Company, a gold-dredging company that became an oil and gas exploration company (and, in 1965, the parent of APL). Davies also acquired control of American Mail Line at the same time; he sought to reintegrate that company into APL.
When Davies took control of APL it was a leader in providing cargo and passenger services between the U.S. Pacific Coast and the Far East. It also offered around-the-world services for cargo and passengers.
Container shipping
Malcom McLean’s Sea-Land Corporation (with significant assistance from Fruehauf Trailer Company), was beginning the freight revolution on ships, railroads and trucks with the intermodal container. Sea-Land’s use of intermodal containers began in the mid-1950s.
In 1958, APL began researching containerization; the company sent teams to 28 major ports. Based on information collected, Davies began integrating intermodal containers into the APL business model. By 1961, APL began launching ships capable of container transport. The SS President Tyler and SS President Lincoln were the first two combination break-bulk/container vessels in the APL fleet. Various ports around the world also began adapting their operations to new container-based systems, although many shippers, carriers and ports were still wary. By the end of the 1950s, APL was still purchasing combination ships rather than all-container ships. However, by 1969, 23% of APL’s business moved via container.
Changes in the 1960s and 1970s
Chandler Ide succeeded Davies as head of Natomas in 1971 when Davies retired. Ide led the company’s retrenchment in the mid-1970s; APL discontinued its around-the-world freight services and passenger services to concentrate on its Pacific and Indian Ocean lines.
Passenger ships’ share of travelers decreased dramatically in the 1960s as more travelers flew in airplanes rather than travel by ship. By 1973, APL’s last passenger liner was the SS President Wilson. The ship completed her final global trip and was sold. That same year, American Mail Line’s absorption into APL was completed, and its ships were given traditional “President” names.
Container transport continued to increase; by 1971 58% of APL’s business moved via container. That led APL to begin converting many of its traditional break-bulk freight and combination ships into more efficient container-only ships in 1973; it also ordered four new container ships. In 1977 the company’s management decided to end worldwide freight service and shifted APL’s focus to trans-Pacific routes.
With containerization firmly established, APL began developing the concept of “seamless integrated intermodal service in the U.S. market” in 1977 – moving containerized freight via ship, train and truck under one corporate identity. APL started the LinerTrain in 1979, a direct rail land-bridge service transporting containers from Los Angeles to New York using its own railcars. The result was a very reliable system to deliver containers. Concurrently, APL ordered its largest vessels to date – three diesel-powered container ships.
The 1980s
APL began its StackTrain service in 1984, which followed on from the successful LinerTrain operations. StackTrain used double-stacked railcars that carried a container stacked on top of another container, which doubled the freight carried on each railcar. The railcars were built with a well that held the bottom container, which lowered the two stacked containers and therefore reduced their combined height to fit within rail line clearances. That led to the common nickname for double-stack railcars – “well cars.” The double-stacking of containers was introduced in the late 1970s and deployed in 1981; APL was the first shipping line to fully embrace and exploit the concept. APL’s railcars were developed and manufactured by Thrall Car. Line-haul rail service was initially provided by Union Pacific Railroad and Chicago and North Western Railway (and eventually by Conrail once track clearances were increased).
By double-stacking containers operating efficiency was significantly improved. Train lengths were decreased as were the number of axles per container, which saved fuel per ton-mile. Another benefit was created by permanently joining five cars in a set. This reduced the number of couplers, which reduced slack action. Less slack action reduced the damage to the freight transported in containers.
APL also continued to modernize its fleet, ordering ever-larger and faster containerships. The company also started Red Eagle service, a door-to-door service. APL also introduced larger container sizes – 45-foot containers in 1982, 48-foot containers in 1985 and 53-foot containers in 1988. The company also developed post-Panamax vessels in 1988. These ships were too large to transit the Panama Canal, measuring 903 feet long and 129 feet wide. Each had the capacity to load 4,300 twenty-foot containers (known as TEUs). Because of these innovations, APL was declared an industry leader in 1989, with the award of the “Admiral of the Ocean Sea Award” by the United Seamen’s Service to APL president W. Bruce Seaton.
The 1990s
APL’s growth continued in the 1990s. It still named its ships after U.S. presidents, and its fleet included 20 fully containerized ships. APL started stack train service from Chicago to Mexico in 1991 to serve Chrysler auto plants, as well as providing general service to other customers.
In 1993 APL began a 30-year agreement with the Port of Los Angeles to open a new $70 million terminal. It almost doubled the size of its Seattle terminal in 1994, increasing it from 83 acres to 160 acres.
Changes in ownership and direction
In 1997, APL was acquired by Neptune Orient Lines, or NOL. The next year, the APL China was battered by a storm south of Alaska’s Aleutian Islands. Nearly 400 containers were swept overboard and many others were damaged (as was the ship). This led to a $50 million lawsuit against APL, the largest maritime shipping loss in history at that time.
NOL sold APL’s stack train franchise to Pacer in 1999; it is now known as Pacer Stacktrain. In the new century, business began to falter. In 2001, NOL reported an annual loss of $57 million, followed by a staggering loss of $330 million in 2002. APL’s sales dropped from $3.8 billion in 2000 to $3.4 billion in 2002.
This led acting CEO Ron Widdows to start a cost-cutting campaign, as well as faster decision-making. The company began generating profits in 2003. Technology was a focus in 2005; APL introduced its “Real-Time Locating System” that used RFID tags to accurately record every container in its system’s position. Using RFID tags reduced delays and “lost” containers. This also meant that APL could handle more cargo more efficiently; APL’s Global Gateway South terminal at the Port of Los Angeles moves 1.65 million TEUs each year.
Another change of ownership
APL’s headquarters in Oakland, California were moved and consolidated with NOL and its other business lines in Singapore in 2009.
Then, on June 10, 2016, NOL (as well as APL) became subsidiaries of CMA-CGM.
APL today
Compared to the situation at the end of World War II, there are very few U.S. flagged vessels left. However, American President Lines (and its predecessors) have been a partner to the U.S. government for “ocean transportation and in-country logistics.” APL has a U.S.-flagged fleet of ships that provide secure, efficient services to key foreign military locations.
The APL fleet of U.S.-flagged commercial vessels with military utility provide reliable support that is essential for national defense. APL’s U.S.-flagged fleet is manned by a pool of trained U.S. mariners.
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