Business History meets.....Klara Paardenkooper & Marten Boon

Business History meets….Klara Paardenkooper & Marten Boon

Marten Boon and Klara Paardenkooper (both ESHCC) are PhD students working in the NWO-funded research project Outport and Hinterland. Rotterdam Business and Ruhr Industry, 1870-2010. Initiated and supervised by prof. dr. Hein Klemann and dr. Ben Wubs, the project aims to write the history of the enduring economic relations between the Rotterdam port and its most important hinterland, the German Rhine-Ruhr area. The project consists of three subprojects, arranged according to three major transitions: the rise of the Rotterdam port (1870-1940), it’s transformation and growth during the transition from coal to oil (1945-1973) and, finally, the impact of globalization and the rise of containerization (1966-2010). Joep Schenk is working on the first project (interviewed previously by Abe de Jong), Marten Boon on the second and Klara Paardenkooper on the third project. For Business History@Erasmus, Klara and Marten interviewed each other on the subject of their projects.

Marten Boon: Why did you apply for the project Containerization, Globalization and Regionalization in the Lower Rhine Economy?

Klara Paardenkooper: In my previous job, I worked at the Economics of Infrastructure department of the Technical University in Delft. I frequently joined their lunch seminars. One of the speakers, Martijn van der Horst, presented a paper on containerisation and its effect on the hinterland access of the Rotterdam port. His statement that the container created as many problems as it had solved, fascinated me. Here was a transport innovation that became synonymous for globalisation, while simultaneously creating coordination, capacity and technological problems in hinterland transport. Little more than two months after the seminar I saw the vacancy for a PhD on the impact of containerisation on the relations between the Rotterdam port and the Rhine-Ruhr hinterland. I knew there and then that I had to do it. 

MB: What are your main results?

KP: The same counterintuitive dichotomy that got me interested in containerisation in the first place has also emerged from my own research. Containerisation is seen as one of the drivers of globalisation by forcing down transport costs. Yet, with respect to the hinterland transport to and from the port of Rotterdam, containerisation has decreased the hinterland range rather than increasing it. Regionalisation in the Lower Rhine region thus ran parallel with globalisation. 

Initially I thought, and so did the Rotterdam Port Authority in the 1970s, that declining transport costs would allow the port to extend its hinterland access. However, this applied to other ports as well, resulting in an increasing share of Central and Eastern Europe being contested by a range of ports, thereby decreasing the uncontested hinterland of the Rotterdam port. Traditionally, Hamburg, Bremen and Antwerp were the main competitors for Rotterdam. Today, competition for the Rotterdam port comes from a much larger range of ports, including for instance Algeciras (Spain) and Gioia Tauro (Italy).

On the one hand, containers are footloose; they have rendered geography unimportant. On the other hand, the case of the Rotterdam port shows that the port has a resilient historical relation to its geographical hinterland, the Lower Rhine region. Sometimes I ponder the question what kind of container transport network would have developed if Europe had been a blank canvas. It would never have developed the way it did, because it is simply inefficient. To me, this shows the resilience of historical evolution. History has structured the way in which container transport was received and organised in the past six decades in Europe.

MB: Why is your research interesting from a business history perspective?

KP: Economists typically look forward; and if they look backward, it’s for no more than 10 years. My research shows, however, that future choices are to a large degree shaped by the past. Containerisation of the Rotterdam hinterland was a painful process of adaptation. The opportunities that containers provided on the one hand, and the past inheritances – companies, geography, and institutions – on the other, have shaped the process of adaptation. Historians are especially well equipped to understand that process and fathom that future choices are, to a degree, dependent on the past.

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KP: Why did you apply for the project Opting for Oil. Rotterdam’s Oil Harbour and the Transition from Coal to Petrochemical Feedstock of the Rhine Industry, 1945-1970?

MB: I have always been fascinated by the connection between oil and politics and the numerous conspiracy theories that exist about it intrigued me. When I first saw the project description I thought: “Big business!” I found the project challenging as it situates the Rotterdam-Ruhr relationship in a pivotal position between international politics, transnational economics, technology and business.

KP: What are the results of your research?

MB: The project analyses a unique episode in the history of the Rotterdam port: the construction of a completely new infrastructure, pipelines for the transportation of crude oil and oil products. Oil was the fastest growing industry in Western Europe as a result of the transition from coal to oil as the most important energy source of the Western European economies after 1945. Existing modes of transportation lacked the scale to connect supply and demand. A new network of oil pipelines was required in which supplying the Rhine-Ruhr area was the central question of pipeline planning in the 1950s. The interesting thing about this pipeline case is that it questioned the historical relationships between the Rotterdam port and the Rhine-Ruhr area, traditionally its principal hinterland. The Rhine, and to some extent the railways, had created a geographical and economic interdependence between the two areas. The pipeline network, however, was created from scratch. Moreover, pipeline economics enabled a wide range of European deep-sea ports to host the feeding terminal for the pipeline network.

The analysis of this episode has brought two key factors for the development of port-hinterland relations to the fore. Firstly, the national border separating Rotterdam from its principal hinterland posed a risk for the continuity of port-hinterland relations. Lacking the geographical dependency of the Rhine, the planning of the pipeline network became subject to national and local political interests. Both the Dutch and the West German government attempted to steer private decision-making. National interests rather than transnational connections thus influenced the planning process. Moreover, Germany’s attempt to secure a pipeline to the Rhine-Ruhr area for a German port was part of a long tradition of trying to divert transport streams from Rotterdam to the German ports. Companies responded differently to this institutional framework, which leads to the second major finding of the study.

Secondly, although the pipeline question lacked the geographical dependence of the Rhine, the existing business networks and their historical relations to the Rotterdam port did have a major impact on pipeline planning. Depending on their existing relations to the Rotterdam port, oil companies adopted different strategies in the planning process. Royal Dutch/Shell with its historically strong connections to the Rotterdam port opted for a transnational approach. Standard Oil, on the other hand, did not have a similar position in Rotterdam. Moreover, its European subsidiaries were operating at arms length. Standard Oil therefore left the pipeline planning to its German subsidiary, which duly approached the issue from a German, national perspective. The outcome of the ‘pipeline competition’ was that both Germany (Wihelmshaven) and Rotterdam obtained a pipeline to the Rhine-Ruhr area. The outcome depended on the differing national institutional frameworks and the manner in which companies responded to it. The strategies that companies employed depended in turn on their historical relationship with the Rotterdam port and the position of the port in the organization of their European business. Essentially, the study finds that not only geography shaped the transnational connections between Rotterdam and the Rhine-Ruhr area but that these were also the result of the historical connections of companies with the Rotterdam port.

KP: What makes your research important for business history?

MB: A national or local perspective dominates the existing historiography of Rotterdam and the Rhine-Ruhr area. The actor perspective that we employ in our project enables us to engage in transnational history writing, in which business history is an essential tool. Although business history itself has been criticized for focusing on single company histories, I think the histories of companies actually allow us to break away from the national and local containers that have dominated history writing so far. Take for instance the history of Royal Dutch/Shell in the Lower Rhine region. It is a beautiful example of how a company’s evolution can tell part of the broader story of transnational economic connections. Moreover, the contrasting approaches of Standard Oil and Shell with regard to the pipeline case shows how the strategies employed by companies actually shape the transnational connections themselves. I am convinced that I couldn’t have done this project without employing business history.