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Bigger & Bigger. In the race to build these new giants. Ludwig's 30,000-ton Bulkpetrol was first off the ways in 1948.
Niarchos, building ever bigger ships, by 1951 claimed the world's biggest tanker: the 31,745-ton World Unity. Supertankers kept right on growing; by 1954 the biggest tanker was Niarchos' 45,509-ton World Glory. Two years ago Onassis took the title with his 46,500-ton Al Malik Saud Al-Awal. Early this year-Nkrchos launched the 47,750-ton Spyros Niarchos (named for his late father), which last month in Rotterdam broke all tanker records by discharging a 41,000-ton cargo (287,000 bbls.) in 17 hours 48 minutes.
The race is far from over. Niarchos who has two 65,000-tonners on order in Germany and is planning a third in the U.S., will launch the sister ship of the Spyros Niarchos next week in England.
This week Ludwig's 84,730-ton Universe Leader will go down the ways at Kure, Japan, where Ludwig has turned out more than half a million tons of shipping since he leased the former Imperial Navy Yard in 1951. Six feet wider than the Queen Elizabeth, the Universe Leader will be able to haul more than enough gasoline in one trip to fill the tanks of every General Motors car produced in the first six months of 1956.
The New Collateral. To build and operate the supertankers, the Argonauts devised a shrewd technique for raising the cash without putting up much money of their own. Niarchos persuaded the oil companies—which were then unwilling to tie up capital in shipping—to put his unbuilt tankers under long-term charter (up to seven years). Armed with charters that would pay for new tankers in less than half their 20-to 25-year working span, he then made firm contracts with shipyards and went to banks and insurance companies for construction loans, using the charters as collateral. With the loans guaranteed, in effect, by the oil companies, banks readily advanced up to 100%.
Though chartering reduces the risks, Niarchos and the other independents are engaged, as one independent said recently, "in the biggest floating crap game in the world." They rely on long-term contracts and fixed rate scales for steady income; only by keeping some ships available for short-term charters can they take advantage of the sudden rises in rates that turn the big profits. When world oil consumption spurted a mere 10% in 1948, charter rates rose 250%. On the other hand, a prolonged fall in tanker rates can come close to wrecking an independent.
In this kind of betting on the future, no one has done better than Niarchos. Except for 1954, when six of his ships were laid up for five months, his tankers have hauled all the oil they could load, often at fancy prices. Shuttling between long-and short-term contracts, his fleet last year transported the equivalent (3.5 billion gals.) of New York State's annual gasoline consumption.