Sun, Aug 19, 2001 - Page 11 News List

Baltick coffee shop turns into an online shipbroker

REUTERS , LONDON

Merchants of 18th-century London needing a ship for their cargoes of flax, pitch or tallow would head to a smokey coffee shop above the Virginia & Baltick tavern.

Nowadays patrons of the Virginia and Baltick coffee shop, better known as the Baltic Exchange, turn to satellites, mobile phones and the Internet.

Over the last two centuries the coffee house and gossip shop has evolved into the world's premier freight trading establishment and tomorrow it makes its debut on the Internet.

Last week the Baltic's board were busily preparing for the launch, testing it with live ship and cargo information.

"I was on the way to a meeting yesterday [Thursday] when I got a text message on my mobile -- it was an alert from the Web site saying it had found me a ship," Chief Executive Jim Buckley said with obvious glee as he demonstrated the new Web site www.balticexchange.com.

The boardroom at the Baltic's headquarters at St Mary Axe in the heart of the City -- - immaculately panelled in mahogany and limewood -- is steeped in the culture of the British merchant trading empire over which it once presided.

But the old world ambience disguises a technological whirlwind that has ripped through the shipbroking industry over the last two years.

The Baltic has moved quickly to defend its members from an onslaught of venture capital keen on cutting out the broker and taking a slice of the US$120-billion-per-year freight market.

"We believe we can best serve our members and by implication protect them from the dotcom start-ups by launching this virtual Baltic," a spokesman said.

Today information and communication are at the heart of the Baltic's services, but at the outset, in the days of sail and steam power, it was less responsive to change. Board members met twice in 1868 to consider the as-yet unproven technology of Julius Reuters Telegram Co, rejecting it on each occasion.

Today the Baltic is providing analysis tools and a unique freight derivatives trading site alongside its ship and cargo search functions. Lost Wax, the company behind the engine of lastminute.com, developed the software. The Baltic occupied various premises throughout its evolution, and it was not until the turn of the century that it took up residence at St Mary Axe in the heart of the City.

A lead-lined "time-capsule" buried alongside the foundation stone of the Baltic Exchange included newspapers carrying news of the death of Queen Victoria three days beforehand and of Boer guerrilla raids on British outposts in the Transvaal.

The vast trading hall of granite and marble stood for nearly a century and was the venue for billions of freight transactions: supplying the navies of both world wars and the loading of supertankers that rounded the Cape to bring crude to the West during the oil crises of the 1970s.

Shipping magnates such as Aristotle Onassis and Stavros Niarchos were the men who gained fame during shipping's "Golden Age" in the 1970s but it was in the marble halls of the Baltic that most of the deals were hammered out and fortunes were made.

Then after nearly a century as shipping's "high temple", the largest bomb ever planted on the British mainland ripped through the Baltic on April 10 1992 killing one attendant and reducing much of the building to rubble.

Over 45kg of Semtex explosives wrapped in a tonne of fertiliser had brought the building to the floor, but the brokers, shipowners and traders continued to meet and the Baltic survived as an organisation.

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