Jamsetji Tata, the founder of the Tata Group, is celebrated for his successful ventures and strategic business decisions. Among these was the establishment of the ‘Tata Line,’ the first business to bear the Tata name, created to challenge the monopoly of the English P.&O. shipping line during the 1880s and 1890s. This effort was detailed in the new book, Jamsetji Tata – Powerful Learnings For Corporate Success, by Tata Group veterans R Gopalakrishnan and Harish Bhat.
During this period, P.&O., supported by the British India government, held a virtual monopoly on shipping from India, charging exorbitant freight rates to Indian merchants while offering significant rebates to British and Jewish firms. This created an uneven playing field for Indian businesses, including Jamsetji Tata’s textile enterprise. Determined to counter this unfairness, Jamsetji sought collaboration with Japan’s largest shipping line, Nippon Yusen Kaisha (NYK).
With NYK agreeing to partner provided Jamsetji took an equal risk, he chartered the English ship ‘Annie Barrow’ at a fixed rate, making it the first vessel of the Tata Line. This venture aimed to benefit the Indian textile industry by offering lower shipping rates, thus breaking P.&O.’s monopoly. A second ship, ‘Lindisfarne,’ was also chartered soon afterward.
The Tata Line’s efforts were initially praised, with The Tribune newspaper lauding the initiative in October 1894. However, P.&O. responded by dramatically reducing their rates and pressuring merchants to avoid using Tata Line. They offered to carry cotton to Japan free of charge for specific merchants and spread negative rumors about Tata Line’s ships.
Jamsetji’s appeals to the British Indian government against P.&O.’s unfair practices were in vain. Gradually, Indian merchants withdrew from their contracts with Tata Line, despite Jamsetji’s warnings that P.&O. would raise rates again if his company closed. This “War of Freights” extended to newspapers, where anonymous letters questioned Jamsetji’s motives. Financially strained, with the business incurring significant losses, Jamsetji faced a tough decision.
Despite the distress and potential damage to his reputation, Jamsetji Tata made the strategic choice to shut down the Tata Line. He sent the leased ships back to England, marking the end of this venture. Most of Jamsetji’s ventures, including Empress Mills, Svadeshi Mills, Ahmedabad Advance Mills, Tata Steel, and Tata Power, succeeded. The Tata Line stands out as an exception, highlighting Jamsetji’s ability to make tough, unemotional strategic decisions when necessary.