POLAND'S NETWORK OF INTERNATIONAL LINER SERVICES

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CIA-RDP85T00875R001700040028-6
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C
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28
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December 20, 2016
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March 30, 2006
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28
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October 1, 1972
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Approved r Releas r 2006 4/19 :CIA-RDr85T00875R001700040 28-6 C?n~idential DIRECTORATE OF INTELLIGENCE Intelligence l~emorandum Poland's Network of International Liner Services Confidential ER IM 72-145 October 1972 copy o ~ ~ Approved For Release 2006/04/19 :CIA-RDP85T00875R00170004002 -$ 25X1 gpproved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 CONI'IDIJNTIAL CONTENTS Page Summary 1 Introduction . 2 Discussion .3 Organization and Growth . 3 Liner Routes -Increasing "ervices . 7 Asian and Australian Division 7 Far East Services . 7 India-Pakistan 11 Middle East 11 Australia 11 African and Mediterranean Lines Division 12 Mediterranean 12 West Africa 12 East Africa 12 American Lines Division ~. 13 North America 13 South America 14 European. Lines Division 1 S Scandinavia . United Kingdom European Continent .Prospects 16_ Liner Serv~~es of the Polish Ocean Lines, August 1972 1y. - - CC~NFIUFNTIAL Approved For,Release 2006/04/19.: CIA-RDP85T00875R001700040028-6 Approved For Release ~t~6 ,l~~l'~~~~~~Q~>~5T00875R001700040028-6 1. Polish Merchant Fleet, by Steamship Company 5 2. Tonnage Carried by the Polish Merchant Fleet G Figure 1. Organization of Polish Ocean Lines (PLO), 30 June 1972 . 4 Figure 2. Polish Ocean Lines Routes .. . 8 Figure 3. Hel-class Jastarnia Bor 10 Figura 4. Container Terminal at the Port of Gdynia 17 Approved For Release 2006/O~y~~G~Q~,,8~.~Q.0,8Z5R001700040028-6 CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence October 197? INTELLIGENCE MEMORANDUM POLAND'S NETWORK OF INTERNATIONAL LINER SERVICES Summary 1. Poland, more than any other Communist country, has been able to build its shipping services into a worldwide network. In the process, Polish Ocean Litres (PLO) has achieved a strong position in international shipping and now ranks among the top 10 liner~t~ companies of all flags. Its ships provide service to most Third World countries, `~ the industrial West and Japan, and ?o Asian Communist countries; only the west coast of Nortlt America and Cuba are notable exceptions to its coverage. 2. In establishing its extensive network, PLO has operated both within and outside the shipping conferences.t2~ For instance, in South America, I'LO recognized the region's sensitivity to 17ag discrimination and accepted a cargo quota system, helping to break !tp the monopolistic shipping conference structure tktat had served the east coast of South America. Joining with the USSR and East Germany to form BALTAMERICA, the Poles entered newly formed conferenc.?s that resulted from Brazilian and Argentine decrees imposing cargo quotas on foreign s'.tips in their seaborne trade, thus wiping out existing conferences. On the west coast, PLO acted like any independent by undercutting the existing conference rate structure to stimulate trade with the area and to enable its ships to obtain cross trade cargoes. In this case, as in most instances, once PLO established its service it joined the appropriate conference regulating the trade. 1. Liners are ships that operate on a relatively fixed schedule carrying high-value general-tyre cargoes, compared with tramps that have no schedule and usually h?ansport low-value bulk commodities such as coal. Tankers operate as tramps. 2. Organizations of liner operators that fix freight rates and allocate sailings in specific directions on specific trade routes. Note: This memorandum was prrnared by the Office of Economic Research. Approved For Release 200/~'~r~~~,875R001700040028-6 Approved For Release 2~A~~/~~.~~C~~-~~~5~,T00875R001700040028-6 3. PLO is divided into four operational divisions based on geographic areas. By mid-1972, PLO operated 157 ships of 904,000 deadweight tons (DWT) on 32 li~ier routes. Although its slii;~s transport only a little more than one-fourth of the Polish fleet's carriage, they account for a preponderance of the fleet's foreign exchange earnings. PLO's high earnings are explained by the sig~~iflcantly higher re.te structure for liner cargo, compared with tamp cargo. Tlie earnings also reflect the profitability of PLO's operations. In the Indian trade, PLO joined with several Indian shipping companies to form a highly profitable joint service (INDOPOL) that provided equal revenue sharing with the Indian companies and excluded third flag ships from the trade. With the East German steamship company (DSR), PLO cre: ted a joint service (BALTAFRICA) and by offering lower freight rates was able to capture the East African coffee trade wit;i the United Kingdom that historically was handled by West European steamship companies. 4. PLO has been improving its liner network by introducing new slops and opening new services. In mid-1971 its conventional service to the Far East was supplemented by an express service to Japan employing a new class of high-speed cargo liners. The Poles also made a significant breakthrough during 1971 on their North American service by opening a new line to the potentially lucrative Great Lakes ports, both US and Canadian. Efforts through 1975 apparently are geared to improving existing services rather than adding new lines. During the period of the Polish Five-Year Plan (1971-75), PLO will add 327,G00 DWT of shipping to its fleet, some 30% more than in the previous five years. This expansion should enable PLO to maintain its position as a top liner company. Although the addition of new, fast container ships will facilitate the carriage of container cargo, ''i0, as is the case for all other Communist liner companies, will continat: to lag far behind the container carriage of Western shipping companies. 5. For more than two decades, Poland's maritime policy .has focused on establishing a strong position in the international seaborne cares liner trade. In 1951, Poland's liner trade consisted of 1.5 million metric tons of cargo carried on 48 ships (220,000 DWT) operating on 10 routes. By the end of the decade, however, carriage was up to 2.5 million tons as the route ,structure was expanded to 28 lines handled by 90 ships (approximately 500,000 DWT). At that time, Poland for the most part had laid out the projected long-term coverage of its liner trade and during the 1960s emphasized expansion of liner fleet and cargo handling capabilities. During this period, only three new lines were added, yet ships in the trade Approved For ReleaseC2~~4~~~~A~F~~85T00875R001700040028-6 Approved For Release 2006/04~~,,C.rl,~q~~,gQ~7,5R001700040028-6 increased to ab~~ut 140 (80G,~~0 DWT) and carriage to nearly 4.2 million tons. This memorandum examines the activities of PLO, which has functioned as the principal instrument for Polish lines trade expansion. The analysis covers PLO's growth, operational activities, route structure, and future plans. Or;,a,,;zation and Growth 6. In the early 1950s, Poland's ~~ierchant fleet was organized under the Ministry of Shipping into two companies: PLO and the Polish Steamship Company (PZM). PLO assumed responsibility for r;post of the ships in scheduled liner service and PZM for all other vessels, a majority of them in non-scheduled tramp service. As the fleet tonnage of the two companies grew, delineation of responsibilities became murky; PZM operations began to encompass all liner service in Europe and in December 195is were extended to longer range cargo lines with the opening of scheduled services to West Africa. About the same time, PLO entered into tramp operations using ships withdrawn fro;n liner service. To counter these apparent operational conflicts and for economic efficiency, the Polish merchant fleet was reorganized on l January 1970. At tha? time, PLO took over all liner services and PZM assumed sole co~itrol of tramp shipping. PLO was organized into four operating divisions, each responsible for linen services in a specific geographic area (see Figure l ). 7. Under this reorganization, 46 freighters (111,300 DWT) were transferred from PZM to PLO, which in turn shifted five tankers (100,000 DWT) to PZM. These changes, coupled with deliveries of 12 new liners - 70,000 DWT -during 1971, raised the size of PLO's fleet by the e~id of the year to 157 ships with a tonnage of 904,000 DWT (see Table 1). PLO's inventory in 1971 accounted for 57% ~f the ships and about 41% of the tonnage in the entire Polish merchant fleet, and tonnagewise, PLO emerged among the top 10 liner companies of all flags, comparing favorably with such slopping giants as the British Peninsular and Oriental team Navigation Company and the Japanese Nippon Yusen Kaisha. 8. After the reorganization, PLO restructured Poland's liner operations, expanding some services and discontinuing others so that by Approved For Release 2006/d4l~I11~~~T~L5R001700040028-6 Organization of Polish Ocean Lines (PLO) ~u June ~y72 General Management Headquarters, Gdynia Asian and Australian Lines Division Heac .uarters, Gdynia Gdynia-Middle East Gdansk-Bombay Gdansk-Bay of Bengal 'Gdyni a-Malaya-Thai land- Japan-Korea-China North Vil~am ia- Australia-Europe African and Mediterranean Lines Division Headquarters, Gdansk American Lines Division Headquarters, Gdynia European Lines Division Headquarters, Szczecin Gdynia-East Africa (BALTAFRICA) (Operated jointly with the East German steamship company D5R) Gdansk-Medfterranean Szczecin-West Africa United West Africa SUNIAFR~~ `Operat jointly with DSR and the USSR's Estonian Shipping Company) Szcze~.in-Morocco-Canaries (UNIAFRICA) 'OFfiond upnezs sailing : aNerod as a pn!fude to a lepan-Expn!ss service. ss.~u cr.~ a, VSlleaz~t coast~~ ports Gdynia-continent-US and Canadian Grea! Lakes Gdynia-Central America Gdynia-East coast of South Amenca (BALTAMERIC (Operated jointly with l~R and the $OYiet Baltic Stea~hi~ Company) Gdynia-INontreal (passenger) (South A erica Szczxin-Oslo idansk-Stoc!cholm Gd~~sk-Scandinavia Szczecin-Copenhage Gdansk-Finland (Operated jointly with the Fnska Angfartygs AB) Szczecin-North Finland Szczecin-Finland Szczecin- HamburgBremen Gdynia-Hull Szczecin-andon Gdynia-lpsriich Szczecin-Yiest coast UK Szczecin-Rotterdam Szczecin-Antwe-p Szczecin-France-Ireland Swinoujscie-Y::tad (car ferry) Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 Supply Division Headquarters, Gdynia Approved For Release 2006/04/'~~)L1r1 1 17,~5~2001700040028-6 I'olisli Merchant Pleet, by Steamship Company Polish Steamship Polish Ocean Lines Company Tots~lJ Number Thousand Number Thousand Number Thousand As of 31 December of Ships DWT of Ships DWT of Ships DWT 1965 80 655 100 451 180 1,106 1966 83 673 112 591 195 1,264 1967 89 721 123 725 212 1,446 1968 94 774 128 78G 222 1,560 1969 100 810 135 870 235 1,680 1970 145 834 102 961 247 1,795 1971 157 904 108 1,138 265 2,042 a. Excludes Polish-flag ships assigned to the Chinese-Polish Shipbrokcrs Company, Ltd. (CHIPOLBROK), which arc nominally subordinate to PLO but under indefinite time charter to CHIPOLBROK, because they do not participate in PLO's operations in Polish seaborne trade. CHIPOLBROK is a joint stock company formed in 1950 by PLO and the China Ocean Shipping Company (COSCO). ~HIPOLBROK was established both to circumvent restrictions on the sale of merchant ships to the People's Republic of China and to counter ossible Nationalist China's seizure of PRC-fla vessels navi atin in the vicinit of Taiwan. 25X1 mid-1972 it was operating 32 lines (see the tabulation). Of these, 23 function under PLO exclusively and the rest operate .jointly with other Communist and non-Communist steamship companies. Although PLO's ' As of 31 December PLO Lines 1967 1968. 1971 .1972,(30 June) 17 31 U 30 0 3f COI~,'FIDENTI~~ Approved For Release 2006/04/19 :CIA-RDP85T00 58001700040028-6 Approved For Release 2~.~~~~~~~P~~T00875R001700040028-6 Europeali Lines Divisions manages 50% of the liner sen~ices (see the tabulation}, nearly half of its fleet tonnage and the largest and fastest ships are in the Asian and Australian Lines Division, reflecting its long-distance operations. Total PLO (as of 31 December 1971) Asian and Australian Lines Division African and Mediterranean Lines Divisicn American Lines Division European Lines Division Average Capacity Capacity Number ~ousancT- Vcssefs (Thousand of DWT Percent Number Percent DWT) Lines , 224 ?S 45 29 9. In 1971 the Polish merchant fleet carried 18.4 million tons of foreign trade cargo (see Table 2), earning about 300 millior. to 350 million Polish Ocean Lines Polish Steamship Company Total Year Liner Tramp Total Liner Tramp Total Liner Tramp Total 1966 2,250 972 3,222 1,364 7,566 8,930 3.614 8,538 12,152 1967 2,411 616 3,027 1,435 8,590 10,025 3,84G 9,206 13,052 1968 2,614 709 3,323 1,460 10,032 11,492 4,074 10,741 14,R15 1969 2,767 1,101 3,868 1,432 11,109 12,541 4,199 17.,210 16,409 1970 4,044 452 4,49G 149 12,776 12,925 4,193 13,228 17,421 1971 4,430 300 4,730 0 13,628 13,628 4,430 13,928 18,358 foreign exchange zloties ($80 million to $95 million). Of this total, PLO earned more than 75%, although its operations accounted for only about 25% of total carriage. This results from freight rates for liner cargoes (whicY~ include machinery, egtlipnnent, and other general cargoes) that were Approved For Release ?(~~p~(j~4~~~~~~~5T00875R001700040028-6 Approved For Release 2006/04/~~i~~>~~~R001700040028-6 normally four to five times greater than those for tramp cargoes such as grain, coal, and other bulls commodities. PLO's earnings were derived from the carriage of about 2.5 million tons of Polish exports and nearly 2.2 million tons of goods for foreign shippers, including interport cargoes in Western Europe's trade with third countries and cargoes for East European countries transiting Polish ports. On 17 of the 32 lines, most of them to Baltic and Atlantic ports in Europe, trade is limited almost exclusi~~ely to goods that move through Polish ports. The remaining I S cargo lines also carry significant tonnage in trade between Western Europe and other continents. Unlike the USSR, however, Poland apparently operates no lines where the chief or sole object is to earn foreign exchange by carrying goods in other countries' trarie. For example, Soviet ships run between Western Europe and Canada, carryin@ non-Soviet goods, t~ earn hard currency for the transport service. Liner Routes -Increasing Service Asian and Australian Division Far East Services 10. Far East services have changed considerably since their start in mid-1950. At first, only slow ships that had been built before and during World War II were used on a run from Poland to China with intermediate cal:a at Middle Eastern, Indian, and Pakistani ports. In 1957, ships of the new 16-knot Mu-celi Nowotko type were introduced and the service was divided into two separate lines -one to India and the other to the Far East. V/ith this split, the Far East service became more timely, offering twice monthly round-trip voyages from Polish and West European ports to Malaya, Singapore, Indonesia, North Vietnam, China, and Japan and monthly round-trip voyages to North Korea and Australia. Additional changes took place in the 1960s, and early in 1970 three separate Far East lines were established: around-trip eastbound line from Gdynia and Western Europe to Malaya, Thailand, Japan, North Korea, and China; aone-way eastbound line from Gdynia to Indonesia and North Vietnam; and aone-way westbound line from Australia to Europe, using ships retu~,~ing from voyages to Indonesia and North Vietnam. Details on these and other liner routes, including cargo information, are given in the Appendix. The map, Figure 2, depicts PLO's route structure. 1 i. PLO's China service is confined to the port of Shanghai, where ships call with pork and general c~,:go from Europe and apatite and metal ores fram North Korea. Some additional service to China and North Korea comes from the unscheduled operations of CHIPOLBROK. By December 1971 the CHIPOLBROK fleet included 11 Polish and four PRC 7 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 CONFIDENTIAL Approved For Release 20~1'J~~~~T~0875R001700040028-6 Polish Ocean Liner Routes ~ Nan-Communist countries sorve~ by Poland ~ Communist countries served by Poland IAalae. l ! r ` ~ i11~::1 Irj~ptinq r., u /t Tnrkoy I ` Poepl~'q B~pphlio of Chlnq ~ Iodh ! '? / Approved For Release(2+~$11~~4/1f~;J~hQt~~~5T00875R001700040028-6 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-fi LONFIDI/NTTAL vessels that moved from ports in Europe (Gdynia and Rijeka) to Haiphong, North and South China ports, and Chongjin and Nampo in Pdorth Korea.t3~ 12. With the mining of Haiphong harbor during May 1972, PLO's carriage to North Vietnam was suspended. Since 1964, PLO ships have delivr,red more than 323,000 tons of cargo to North Vietnam. Deliveries surged in 1968, when more than 56,000 tons were brought in, and since then annual offloadings have been in the range of 60,000 tons. 13. Starting in June 1971, PLO supplemented its conventional service to Japan with optional express sailings. The conventional service offers twice- monthly sailings on 15 Peking-class 10,000-DWT ships with 16-knot speeds; the express service uses five new 14,170-DWT Hel-class ships (see Figure 3) with 22.5-knot speeds (the fastest vessels in PLO's fleet) that offer monthly service over a shortened route. Round-trip express voyages from t'oland to Japart now take only 120 days, compared with 180 days for conventional service. 14. Until 1963, T'LO functioned outside the Far East Freight Conference (FEFC). At that time, agreement was reached with FEi~C and affiliated conferences in the trade, giving PLO a "tolerated outsider" status on eastbound routes and "associate membership" status on westbound routes. The agreement permitted PLO to operate 24 round trips annually on the Europe-Far East run. 15. The expansion of PLO's Far East line, notably the addition of express voyages ~o Japan, led in 1971 to the revision of conference arrangements. On 1 July of that year, PLO became a full member in the westbound FEFC, its eastbound counterpart (FEFC Outward Continental), and the affiliated conferences (Europe/Japan, Japan/Europe, Far East/Gulf of Aden and Red Sea, and Japan/Gulf of Aden and Red Sea). This enabled PLO to increase annual r~~~nd-t;ip sailings to 26 and to haul more tonnage on the route. 3. Poland also formed a joint stock company with North Korea, the Korean-Polish Shipbrokers Company (CHOPOLSHIP). Organized in 1966 to train Nortlr Korean crews and to establish North Korea as an international carrier, CHOPOLSHIP started by operating three time?chartered Polish ships in North Korea's trade with other Asian countries and Australia. B 1969 o erations were reduced to a sin le shi Mickiewicz, The ship sti l flies the Polish flag and moves regu arty rom North Korea to orth Vietnam, Hong Kong, and Japan. Approved For Release 20(~9~~~~~~$~bA875R001700040028-6 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 CONKII)I?N'l'IAL Figure 3. He/-Class Jasiarnia Bor, 14,150 DWT, one of five high-speed cargo liners used on PLO~s Express Service to Japan. Approved For ReleaseQ?d1j~.~1~~P~,5T00875R001700040028-6 Approved For Release 2006/04/~O~{l~Q-,~}~QP~,S,~Q.8,~5R001700040028-6 16. Poland's Indian service, started in 1949, was the first regular Communist liner service to South Asia. From 1950 to 1957 it wss handled ~y liners on the Far East run. A major change occurred in 1958, when shipping conferences regulating Indian-European trade agreed to allot specific cargo tonnages to the independent PLO liners on round trips between South .lsian ports and Western Europe. This agreement made the route more economically attractive to PLO and IeJ to the formation of a joint Indian-Polish liner service (INDOPOL) in 1960. Operated by PLO and three Indian firms (Shipping Co.poration of India, India Steamship Company, and Scindia Shipping Company), the INDOPOL arrangement is unique, as it is Poland's onl;? joint liner service based both on 50-50 revenue sharing and o-~ the exclusion of third flag ships from Polish-Indian trade. Conference lines on the Western Europe-South Asia route accepted this discriminatc,ry arrangement because they had no scheduled calls at Polish ports. Over time these provisions have made INDOPOL the most profitable of all PLO's liner services. In 1964 the INDOPOL service was divided - the Bombay line to the west coast of India and the Bay of Bengal line to the east coact. Both rartes were served by two monthly sailings, one each by Polish and Indian ships. 17. Service to tlie Middle East opened in 1960 as PLO used chartered foreign ships on a run between Europe and Red Sea and Persian Gulf ports, principally Aqaba, Jeddah, Basra, Kuwait, and Khorramshahr. By 1963, chartered vessels were pleased out and five PLO ships handled the service. In the wake of the closure of the Suez Canal in 1967, the Middle East route was reorganized. Calls to Zed Sea ports were transferred to the East African service and a revised ]'Middle East line Handled Persian Gulf ports, offering one monthly round-trip s;.iling prom Gdynia to the Trucial States, Dammam, Kuwait, Basra, and Khorramshahr. Under an agreement with the Associated Continental Persian Gulf Line Conference, PLO is guaranteed 12 European departures annually and is given cargo allotments from continental ports. 18. PLO ships began calling at Australia in 1957 as part of Poland's extended Far East service. In 1958 a separate Gdynia-Indonesia-North Vietnam-Australia line was formed as ships transited Australian ports on their return voyages to Europe. As Polish-Australian trade grew, the westbound portion of this service became a separate line in 1970, and in October 1971 was converted to a round-trip service that linked Gdynia with major Australian ports. 11 Approved For Release 2006/~4~~~'L'~~'~J;~D~75R001700040028-6 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 CONFIDEN'T'IAL African and Mediterranean Lines Division 19. Liner service to the Mediterranean resumed almost im 7~ediately after World War II, a~ a line between Polish, 114editerranear., and Black Sea ports was established. In 1959 the line was divide, into the Gdansk-Mediterranean and the Gdansk-Black Sea lines and in 1962 a separate western Mediterranean service (the Gdansk-Western Mediterranean Line) was formed. In i 968, all three limes were integrated into one service that now runs 21 ships operating outside the various freight conferences on the routes. Shipments to North Africa take up a large portion of available cargo space. West Africa 20. PZM opened Poland's first liner operation to West Africa in 1958. In 1961 this line merged with its East German counterpart DSR line to form UNIAFRICA, the first joint Communist-flag li:~t~r service. Following PZM's lead, UNIAFRICA continued t ~ function outside the European-West African Lines Conferei;c~~ (FALCON), undercutting conference rates to attract traffic. In 1963 the service was split into northern and southern variants, with the former covering ports in Morocco, Senegal, and Guinea, and the latter ports in Sierra Leone and Zaire. In 1970, PLO replaced PZ1v1 in UI~IIAFRICA and the line operated 26 ships (15 Polish and 11 East German) that offered three to four monthly round-trip sailings on four separate routes while extending its service to Liberia, Ivory Coast, Ghana, Togo, Nigeria, and Cameroon. During February 1972 the USSR's Estonian Steam~'_~ip Company joined UNIAFRICA. The service was then split into two routes, a West African line and aMorocco-Canaries line. UNIAFRICA has a strong foreign exchange earning record, as 50% to 60% of its cargoes are non-Polish. East Africa 21. PLO's East African service has been in operation since 1962. In 1967 it merged with the DSR line on the route to form another joint Communist-flag service, TALTAFRICA. Functioning outside existing shipping conferences, BALTAFRICA with 19 ships (nine Polish and 10 East German) offers three monthly sailings betwee;. Europe and the East African ports of Mombasa (Kenya) and Dar es Salaam (Tanzania). 22. The 15%-25% differential between its non-conference rates and those of the East African-United Kingdom Homeward Conference permitted BALTAFRICA to capture most of East Africa's coffee shipments to the Approved For Releas~20~~~t~9-:~IA-f~DP85T00875R001700040028-6 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-ti CONP LDENTIAL Uni'ed Kingdom for 1969-73, dealing a heavy financial setback to the West European s~eamslup compa~~ies in the conferences. In 1969, BALTAFRICA underbid the conference lines and won aone-year contract with the Lyons, Maxwell House, a::~l Nestle cornpanies to carry 50,000 tons of coffee tc the tlnited Kingdom. On this contract alone t'~e conference lines lost about $1.8 million worth of business. They incurred a more substantial loss in 1970 where bids on another contract were solicited. On this occasion the conference lines offered to haul coffee under atwo-year contract at $25.20 per ton for the first year and $26.40 per ton for the second year. BALTAFRICA offered and ? won a three-year contract effective through March 1973 at $25.20 per tor. for the first two years and $26.40 per ton for the third year. Over the three-year period of this contract, BALTAFRICA will carry 150,000-180,000 tons of coffee and earn about $4.6 million in reve~~ues. 23. Taking advantage of its full membership in the Sudan-United Kingdom Conference since 1965 and the Continental Red Sea Conference since 1970, PLO uses some of its BALTAFRICA ships on a conference line linking Europe with a number of R?;d Sea ports. Consequently, on some voyages from Europe to East Africa and the Red Sea, BALTAFRICA ships carry cargoes both at conference rates and at significantly lower non-conference rates. American Lines Division North America 24. PLO's first postwar cargo line to North America opened in April 1958 to haul agricultural commodities under US aid legislation. This line handled both US east coast and US and Mexican Gulf ports until 1963 when a separate Gulf port service was established and the east coast line was set up as a weekly service. Both lines have always Functioned outside the conference system. 25. PLO service to North America took a major turn in March 1971 at which time a new line was opened to s?rve US and Canadian Great Lakes ports. As such, Poland had access to US Great Lakes ports for the first time in 20 years, culminating longstanding plans to round out services to eastern North America. In establishing this new US service, Poland met !criteria contained in a major relaxation in US port security regulations (15 January 1971) that opened additional ports to Communist ships.~4 ~ 4. In servicing US ports, Polish cargo liners must operate within the framework of US port security regulations which, when introduced in 1950 at the time of the Korean War, appried only ~ ~ Soviet a~,', East Europran ships. Originally, calls were limited to 12 ports and required 30 days advance notice. Subseque;~tly, the regulations were modified and currently Polish ships can call at most US ports after two weeks advance notice. r[~v~~ 13 Approved For Release 2006/O+~T~9 ~ ~~/8~~>~75R001700040028-6 Approved For Release 2 06/04/19 :CIA-RDP85T00875R001700040028-6 .ONI~ J1~EN'TIAL ~%. During the first nine months of operation the new Great Lakes service handled about 70,000 tons of cargo. This performance is r,xpected to improve significantly in the y~ ars ahead. PLO uses six ships of the new ice-reinforced Zakopane class for calls at Canadian and US purls. Calls are most frequent during April-December, wren both the St. Lawrence River and the Seaway are open. 27. PLO also operates a passenger line from Europe to North America which, since its inception, has served Montreal. The Stefan Batory, which was built in 1952 as the Maasdam for the Holland America Line, was refitted to meet US safety requirements for passenger vessels and in 1970 added New York as a second North American port of call. This pine operates within the conference system as PLO is a member of two North Atlantic passenger conferences. 28. Using 13 ships, PLO participates in the Polish-Soviet-East German joint line, BALTAMERICA, to the east coast of South America and operates a unilateral line to the west coast. PLO inaugurated its east coast service in 1957. The service became a joint line in 191;8 when the Soviet Baltic Steamstup Company contributed equal tonnage to form BALTAMERICA. Under this arrangement, BALTAMERICA offered four monthly sailings from Baltic and West European ports. The next year the East Germans joined the line and, with their additional tonnage, monthly sailings were increased to six. 29. BALTAMERICA has been a highly successful operation meeting competition from Western liner companies on this route, both by charging lower rates (called "political or non-compensatory" by West European competition) and by catering to the region's sensitivities on flag discrimination. Argentina, $razil, and other South .American countries have ~rnig souglrt to reserve a specified percentage of their seaborne trade for ship, of countries participating in the trade. For their part, the major West European countries have consistently opposed such preferential measures. Early in 1976 the Western conference lines threatened a rate war in the trade of Europe and the east coast of South America, after rejecting an Argentine initiative that reserved SOIo of all cargo moving between Argentina and Europe For Argentine-flag ships. However, when BALTAMERICA joined the new Argentina-Europe and the Europe-Argentina Freight Conferences that were set up in June 1970 wider Argentine sponsorship, the West European conference lines soon relented and also joined. BALTAMERICA also entered the newly Formed Brazil?FUrope-Brazil Conference in October 1970 after Brazilian legislation imposed cargo quotas on foreign ships in Brazil's seaborne tradF:. Inasmuch as these new conferences severely Approved For Rele sa e`~'OD~/0?~?9NC`IA`-P~B'P85T00875R001700040028-6 Approved For Release 2006/04/19 :CIA-RDP85T00875R001700040028-6 CONFII~I/NTIAL restrict }~articipatior~ by ships of coun'ries that have little or no cargo of their own moving in the trade, BALTAMERICA has prospered not only by maintaining its major role in moving cargoes from Communist Baltic ports to Argentina and Brazil b~.t also by picking up modest quotas for handling Argentine and Brazilian cargoes to Europe. Moreover, the higher rate structures of both conferences have served to increase BALTAMERICA's earnings. 30. Service; to the west coast of South America was started at the end of 1966. Faced with a variety of problems -- small volumes of cargo, a heavy imbalance between imports and exports, and strong conference opposition -PLO achieved some success as it again used low freight rates, both to stimulate trade with the ar~~~i and to obtain cross trade cargoes for its ships. The existing conferences on this route, the European-South Pacific and Magellan Conference (ESPM) and the Association of Wcst India Trans-Atlantic Steamship Lines (WITASS), reacted by tltrcatening shippers with the loss of deferred rebates if Polish ships were used. The threats, however, had little impaci, as PLO was able to sustain its pcsition on the basis of its own trade with the area that approximated 200,000 tons in 1968. PLO eventually joiined ESPM early in 1965 as an affiliate member and R~ITASS in August 1)70 as an associate member, thus obtaining easier access to cargoes at Venezuelan and Colombian ports and greater freedom for future activity in the entire Central American area. European Lines Division 31. The Pol~,~td-Scandinavia lines are highly profitable, with the volume of cargoes moving on Polish liners r~;arhing about 500,000 tons in 1970. The trade is served by seven cargo lines: Gdansk-Scandinavia (to Sweden's west coast), Gdansk-Finland, Gdansk-Stockholm, Szczecin-Copenhagen, Szczecin-Oslo, Szczecin-Finland, Szczecin-North Finla.~d, and a car, cargo, and passenger ferry between Swinoujscie and the Swedish port of Ystad. 32. In serving Sweden, the Gdansk-Scandinavia line uses two 900-DVI~T ships for weekly calls at Malmoe and Gothenburg; the Gdansk-Stockholm line operates two 1,500-DWT ships for weekly service to Stockholm and less frequent calls at smaller ports on the east coast o~ Sweden. The Norwegian and Danish services use a number of small ships for weekly calls at Oslo and Copenhagen and at other Norwegian anc; Danish ports if there is sufficient cargo. The Finnish service includes weekly calls at Turk~.e and Helsi~tski, a joint service with Finska Angfartygs AB offering weekly calls at Helsinki and Kotka/Hamina, and a line to North Finland which operates, Approved For Release 2006/~tt9' ~17~RBP~?5~~~5R001700040028-6 Approved For Release 2,~Qk/,Q~(a.9~~A-_E3pP$~T00875R001700040028-6 depending on ice conditions, from June to November with twice monthly sailings to Oulu and Kem.i. Uftited Kiitgdan 33. PLO operates four lines to the United Kingdom. Two of these, Gdynia-Hull and Gdynia-Ipswich, are operated jointly on a biweekly basis with the British United Baltic Corporation, Ltd. (UBC). During 1969, PLO and UBC experimented with container carriage by transporting about 2,$00 tons of cargo, mostly meat from Poland. The operation was subsequently continued and now handles a wide range of general cargoes. Before realigning its route structure after the 1970 reorganization, PLO's ~rnilateral lines to the UK served the routes Szczecin-Liverpool and Szc~;;cin-London. In the realignment, PLO switched the port of call on the line between Szczecin and the west coast of the United Kingdom from Liverpool to Manchester, claiming that the cost of handling small vessels at Liverpool was out of line with their earning capacity. European Continent 34. PLO took over PZM operations to European Atlantic continental ports during 1970. They include a weekly Szczecin-Hamburg-Bremen service, a Szczecin-France-Ireland service offering calls at Rouen and Dublin every 10 days, and weekly Szczecin-Antwerp and Szczecin-Rotterdam services. Prospects 35. Poland's Five-Year Plan (1971??75) calls for expansion of the merchant fleet to 3.5 million DWT so that it can carry nearly 60% of Poland's seaborne trade. Although planned additions to the fleet will concentrate on bulk carriers for PZM (58 ships, 1.5 million DWT), 44 vessels (327,000 DWT) are earmarked for PLO, compared with 249,000 DWT added in the previous five years. The major thrust of PLO operations will be to improve and modernize existing services, as there are no plans to open new liner routes. The Indian service, for example, will get 12 ships (110,000 DWT); the East African service four ships (40,000 DWT); the Mediterranean service five ships (30,000 DWT); and the European service eight ships (16,000 DWT). Additions to the PLO fleet will include express liners, roll-on-roll-off vessels, and container ships. 36. The purchase of container ships will give new momentum to Poland's containerization program and improve its competitive position on the North Atlantic route. For some time, PLO has used a small number of part container ships, including those in the new Zakopane class, on the US-Canadian Great Lakes service to carry seventy 20-foot containers. By CONFIDENI~' Approved For Release 2006/04/19 : C 5T00875R001700040028-6 Approved For Release 2006/04~,~CI~;F~4~$~~~Q8~7~R001700040028-6 1975, however, full container ships (; 3,000 DWT) that ran handle ?00 to 300 containers will be inh?od~+ccd on tha run. At the same tinn?. more hart container sl;', ., Nill he hurchased anti some ronvcntional vessels will be modified f?or the coritaincr traclc. Poland also ;;tends to moclrrnire its container facility at Cdynia (sec Figure 4) and comlletc aferry-container terminal at Swinoujscie, which is already under ronsh?urtion. With these efforts, Poland rxl~cts to handle some 400,000 tons of sc+abornc containerized cargo by 1975. Assuming PLO reaches this goal, fhc figure would still be well below 10'% of? its total liner carriage and would hale in comparison with carriage by countries in the indush?ializecl West both in absolute and herrcntage terms. For rxamhlr, in 1970, US-flag ships alone hauled 4.7 million tons of? containerized cargo, or? ~rbout 41','. of total liner c,u?riagc (1 I.5 million tons). Figure 4. Container Terminal at the Port of Gdynia 37. ll? it so desires, PLO should have little difficulty in entering shilling ronfcrcnccs on routes where it still olcratrs as an indehcnclent. In the A1ediferranean area, the new Continent-Near East-Continent Confercn~ e hrob~rbly will ofl?cr little resistance. The same holds true for East Africa, where I3ALTAFRICA~s coffee coup has broken the East African Confercnrc's resistance to PLO's entry. UNIAFRICA's negotiations with the. appropriate West African conferences (ongoing since 1970) nary produce ~- cooperative agreement in the near term. Finally, the opening of PLO's new direct service to Australia will give PLO additional leverage for conference membership in that traclc. With respect to the US trade, PLO may not seek conterence membership, because. the confercnres on these CONI~II)EN'I'~~~, Approved For Release 2006/04/19 :CIA-RDP8 8758001700040028-6 Approved For Release ~i~1~~~1~~1`~$~T00875R001700040028-6 routes do not penalize shippers for occa~' anal use of non-conference ships. Under these circumstances PLU may opt to function as an outsider in hopes that its lower freight rates would stimulate US-Polish trade and the use of Polish ships. Approved For Release~d66/b~4~~'`CIAJRt~PS5T00875R001700040028-6 Approved For Release ~0~/ - - Liner Services of the Polish Ocean Lines August 972 Line Route a~ Number of Sailinas Asian and Austrialian Lines Division Gdynia-Malaya-Thailand- Japan-Korea-China Gdynia-Hamburg-Rotterdam- Antwerp-Lisbon-Penang-Port Swettenham-Singapore-Bangkok- Hong Rong-Yokohama-Nagoya- Robe-Chongjin (monthly)- Shanghai-Bangkok-Singapore- Port Swettenham-Penang- Rotterdam-Hamburg-Gdynia Twice monthly General cargoes in- cluding those in cross trades. Uses 15 Pekin-class ships with 16- knot speed-and 10,000-DWT capacity. initiated in mid-1950. Became full member of Far East Freight C~nfer- ence on 1 July 1971. Gdynia-Japan Express Gdynia-Antwerp-Rotterdam- Once Uses five H_1-class ships with 22 5- Hamburg-Singapore-Hong Rong- monthly . knot spee3-;nd 14,000-DWT capacity Robe-Yokohama-Nagoya-Kobe- . Option to coiventional service Hong Rong-Singapore-Hamburg- . Round-trip voy.3ges frc~ Poland to Rotterdam-Antwerp-Gdynia Japan reduced t~ 120 days, compared with 180 days required by older liners. Gdynia-Indonesia-North Vi t Gdynia-Djakarta-Surabaya- Once Outbound - trucks, Since 1965, PLO's liners have de- e nam Haiphong-Indonesia-Gdynia monthly metals and metal livered more than 323 000 tons of (West European ports both products, ma- , cazgo. ~ -? was a surge in 1968 inward and outward) chinery and equip- , when car:. ;e neatly doubled that ment in 1967 a:.;i since 1969 deli~eriss inbound -rubber, have hovered in the 60,000-ton coal range. Gdynia-Australia-Europe Gdynia-Hamburg-Bremen- Once Outbound - textiles, Operated as westbound leq of Gdynia- Fremantle-Adelaide-Melbourne- monthly glass, corn, and North Vietnam service until October Sydney-Brisbane-Newcastle- pharmaceuticals 1971 when direct, round-trip service Burnie-Capetown-London- Inbound - Australian to Australia opened Antwerp-Gdyn:~ wool, zircon, and . rutile Gdansk-Hamburg-Antwerp- Once Karachi-Bombay-Saurashtra- monthly Malabar coast-Antwerp-Hamburg- Gdansk Outbound - steel, machinery and equip- ment, chemicals, paper, fertilizer, and potatoes Inbound - oilcake, jute, rubber, rntton, tea, and spices Pazt of joint Indian-Polish liner service (INDOPOL) formed in 1960. Based on 50-SO revenue sharing and on exclusion of third flag ships. Approved Asian and Australian Lines Division (Continued) Gdansk-Bay of Bengal Middle East African and Mediterranean Lines Division East Africa (BALTAFRICA) West Africa (UNIAFRICA) Morocco-Canary Islands (UNIAFRICA) Number of Route a~ Sailings Gdansk-Hamburg-Antwerp Once Colombo-Ffadras-Visakhapatnam- monthly Rangoon-Calcutta-Saurashtra ports-Antwerp-Hamburg- Szczecin-Gdansk Gdynia-Hamburg-Antwerp-Leixoes- Once Trucial States-Dammam-Kuwait- monthly Basra-Khorramshahr-Antwerp- Hamburg-Gdynia Gdynia-Hamburg-Antwerp- Thrice Mombasa-Dan es Salaam-Aden- monthly Assab-Jeddah-Aqaba-Port Su~.3n- United Kingdom-continental ports-Gdynia Szczecin-Hamburg-Rotterdam- Two to Antwerp-Las Palmas-St. Cruz- three per Dakar-Bathurst-Freetown- month de- Monrovia-Abidjan-Takoradi- pending on Tema-Douala-Canaries- route Casablanca-continent-Szczecin Szczecin-continent-Canaries- Tema-Lagos-Pore Harcourt- Gabon-Dakar-Canaries- Casablanca-continent-Szczecin Szczecin-Hambu=rt-Antwerp-Las Twice Palmas-Santa Cruz-Casablanca- monthly Bilbao-Antwerp-Hamburg- Szczecin Sams as Gdansk- Bombay line Outbound - machinery and equipment Inbound - sisal, coffee, cotton, and oil cake Outbound - textiles, machinery, steel, and canned food Inbound - timber, coffee, cocoa beans, and edible oils Initiated in 1960. Uses five ships with 10,000-DWi' capacity. Reorgan- ized after closure of Suez Canal in 1967 with responsibility for Red Sea ports transferred to East Afri- can service. Initiated in 1962 and merged with the East German DSR company's line in 1967 to form BALTAFRZCA. Uses 16 ships (six Polish and 10 East German), Polish ships call at Red Sea ports as full mer.~bers of the Sudan-United Kingdom Conference and of L a Continental Red Sea Confer- ence. Initiated in 1958 and merged with the East German DSR company's line in 1961 to form UNIAFRICA. After the 1970 reozganization of the Polish fleet, PLO replaced PZM in UNI- AFRICA. Used 26 ships (15 Polish and 11 East German). During 1970, Polish ships in this service trans- ported over 400,000 tons of cargo. In February 1971, the USSR's Estonian Shipping Company joi*~ed UNIAFRICA causing the service to be split into two lines. Approved For Release 2006/04/19: CIA-RDP85T00875R001700040028-6 African and Mediterranean Lines Division (Continued) Gdansk-Mediterranean Gdansk-Antwerp-Dunkirk- Piraeus-F.~eirut-Latakia- Gdansk Y./ Gdansk-Hamburg-Antwerp- Algerian, Tunisian, and Libyan ports-Gdansk Gdansk-Beirut-Latakia- Gdansk Gdansk-Alexandria (direct or via Tripoli)-Gdansk Gdansk-Piraeus-Istanbul- Gdansk Number of Sailinqs Main Cargoes Twice Outbound - iron, ma- Resumed after World War II. In 1968 monthly chinery, chemicalz, the three lines that were serving glass, textiles, the Mediterranean basin were inte- and potatoes grated into one service. Uses 18 Twice inbound - oilcake?s, ships. monthly cotton, rice, tp- bacco, vegetable fiber, citrus fruits, Twice and dried fruit monthly Once to twice monthly Once monthly Gdansk-Durres-Gdansk Every six weeks twice monthly Gdynia-continental Gdynia-Bremen-Antwerp- Weekl Y ports-US east coast Le Harve (biweekly)- ports New York-Philadelphia- Baltimore-Norfolk- Boston-Wilmington-Le Harve- Copenhagen-Rotterdam-Antwerp- Bremen-Hamburg-Gdynia Gdynia-continental Gdynia-Antwerp-Bremen- Once ports-US and Canadian Aamburg-Montreal-Toronto monthly Great Lakes ports Hamilton-Chicago-Milwaukee Detroit-Cleveland-Sarnia- Montreal-Rotterdam-Antwerp- Hamburg-Gdynia outbound - steel and steel products, pork, fruits, beer, and West European machines, chemicals, cars, and glass inbound - cotton, timber, chemicals, fruits, and grain Initiated in 1958 to haul US aid material. Called at US and Mexican Gulf ports until 1963 when a separate Gulf port service was established. Opened in March 1971 after 20-year hiatus. Uses six ice-reinforced Zakopane-class ships. Approved For Release 2006/04/19: CIA-RDP85T00875R001700040028-6 American Lines Division (Continued) Gdynia-Montreal (passenger) Gdynia-west coast of South America c;dynia-east coast of South America (HALTAMERICA) Swinoujscie-Ystad ferry service Number of Route a~ Sailings Gdynia-Hamburg-Leixoes- Once Miami-Houston-New Orleans- monthly Galveston-Vera Cruz-Tampico- Rotterdam-Hamburg-Gdynia Gdynia-Copenhagen-Cuxhaven- Varies Rotterdam-London-New York- Montreal-New York-Southampton- Rotterdam-Cuxhaven-Copenhagen- Gdynia Gdynia-Hamburg-Antwerp- Twice Lisbon-La Guaira-Mazcaibo- monthly Santa Marta-Barranquilla- Buenaventura-Manta-Guayaquil- Callao-Arica-Antofagasta- Valparaiso-Antwerp-Hamburg- Gdynia Gdynia-Hamburg-Rotterdam- Six Antwerp-Recife-Rio de Janeiro- monthly Santos-Montevideo-Buenos Aires-Ilheus-Sa~vador- Rotterdam-Hamburg-Gdynia Gdansk-Scandinavia Gdansk-Malmoe-Gothenburg- Weekly Gdansk Gdansk-Stockholm Gdansk-Vaesteraas-Stockholm- Weekly Sundsvall-Gdansk Szczecin-Oslo Szczecin-Oslo-Szczecin Weekly Outbound - sugar, steel, tools, med- ical instruments, chemicals, and automobiles Inbound - Peruvian fishmeal, Colombian coffee, metal con- centrates, and fruit Outbound - iron an? steel products, c~.emicals, and potatoes Inbound - coffee, hides, and fruit Agricultural prod- ucts, metals, auto- mobiles, and trucks (passengers) Outbound - iron, sugar, food, gypsum, and salt Inbound - cellulose, paper, chemicals, and ore concentrates Stefan Bato refitted to meet US safety requirements for passenger vessels. Operates within conference system. Opened in 1966 with four vessels, PLO joined the European-South Pacific and Magellan Conference in 1969 as an affiliate member and the Association of. -lest India Trans- Atlantic Stea-~ship Lines in 1970 as an associate member. Operated jointly with the Soviet Baltic Steamship Company and the East German DS R. PLO operates seven vessels of 8,500-DWT capacity on this run. Has met competition from Western liner compaz~ies by charging lower freight rates and by catering to the region's sensitivities on flag discrimination. Uses the Gryf and the S,candynawia. During July 1971, the old Swedish ferry Gustav Vasa was purchased for use on a planned Gdynia-Stockholm connection. Approved For Release 2006/04/19: CIA-RDP85T00875R001700040028-6 Approved For Release 2006/04/19: CIA-RDP85T00875R00170004 Number of Route a/ Saili~s (Continued) Szczecin-Finland Szczecin-Turku-Helsinki- Weekly Szczecin Gdansk-Finland Gdansk-Helsinki-KOtka/ Weekly Hamina-Gdansk Szczecin-North Finland Szczecin-Oulu-Ke.~ni-Szczecin Weekly Gdynia-Hull Gdynia-Hull-Gdynia Biweekly Gdynia-Ipswich Gdynia-Zpswich-Gdynia Biweekl Y Szczecin-London Szczecin-London-Szczecin Weekly Szczecin-west coast Szczecin-Manchester-Szczecin Weekly of the United Kingdom Szczecin-Hamburg-Bremen Szczecin-Gdynia-Hamburg- WeEyly Bremen-Szczecin Outbound - salt, gypsum, clay, and ironware Jointly with Finska Angfartygs Tom. Inbound - cellulose, paper, and chemicals utbound - aluminum, knitted wear, zinc, industrial goods, Jointly with the United Baltic and meats Corporation inbound - copper, machinery and equip went, and various other general cargoes Outbound - vege- Uses two 1,500-DWT ships. tables, sugar, and general cargo Inbound - tubes, metal sheets, and cathode copp,~r Szczecin-France-Ireland Szczecin-Rouen-Dublin- Every ten Outbound - sheet Szczecin days metal, textiles, linen, hemp, and willow-ware Inbound - oils, arti- ficial leather, hides, and other general cargo Szczecin-Antwerp Szczecin-Antwerp-Szczecin Weekly Outbound - zinc, alu- minum, linen waste, Szczecin-Rotterdam Szczecin-Rotterdam-Szczecin Weekly Inboanatalcopper, artificial leather, synthetic rubber, oils, hides, and wool a. PLO sc edules vary in flexi i ity from one area to anot er. Ships are often s stituted for of ers or simply inserted on e schedule. Datas for port calls are approximate and unlisted calls are made when there is sufficient cargo. b. Additional calls at other Mediterranean ports are made if dictated by traffic requirements. Approved For Release 2006/04/19: CIA-RDP85T00875R001700040028-6