The success of, and the envy caused by, these large new docks, finally spurred the rival East & West India Dock Company, with their old, shallow, outdated docks and entrance locks too small to accept the new larger vessels, into action. The E&WI chairman and his engineer chose the site carefully. Ships had for centuries moored at Gravesend in Kent, twenty-six miles downriver of London Bridge, while they waited for the incoming tide that would sweep them up to the city. The company used agents to secretly take options on four hundred and fifty acres of marshland around Tilbury on the opposite bank in Essex, before making its intentions public. The advantage of creating docks there was that, for passengers or freight transferring to railway, an entire day was saved in each direction compared with continuing upstream to London.
An Act of Parliament was passed in July 1882. The company were highly optimistic about their new dock. They built on such a large scale that they must have believed that either trade in and out of London would increase dramatically or that they could steal away the majority of the business from the Royal docks. Ships entered a tidal basin of nineteen acres and then into one of three parallel docks – the East, Central and West – totaling fifty-six acres of water space, allowing ships to enter at any time, whatever the tide. Two dry docks were incorporated between the tidal basin and docks. The only land connection to the world beyond the docks was by railway and initially there was no road link other than a track to supply food to the workers from local farms. Fifty miles of railway sidings connected the quays to the London, Tilbury & Southend Railway, which ran passenger trains every thirty minutes to Fenchurch Street in the City and freight to a newly-created depot at Whitechapel. As it was such a remote location the company created tenement-block residences for the workers and company managers.
Unfortunately the work did not proceed according to plan. The company and its contractors under-estimated the scale and cost of the work, from a budget of one million pounds to a final cost of two million eight hundred thousand pounds. The contractors had requested large advances and, when they unexpectedly found blue clay, claimed additional costs. The exasperated dock company had them ejected from the site in 1884 and for a while continued with their own men until new contractors were appointed.
The company considered that a hotel for passengers was an important part of their image and they opened the Tilbury Hotel. Under the stewardship of Leopold C.Bentley and with a spectacular riverside location it became an opulent institution.
The work was finally completed and the first ship entered at the end of its voyage from China in April 1886. Celebrations took place in the hotel, attended by the company chairman, Lord Mayor of London and the ship-owner Sir Donald Currie of the Castle Shipping Line.
The company’s optimism was short-lived. Thames lighters were not designed to go so far downriver and the watermen and wharfingers boycotted the new docks. While Tilbury was being built the London & St.Katharine Dock Company had been negotiating with merchants and offered inducements for goods to be landed at their docks. The shipping trade waited to see what East & West India would offer in return. In the meantime the vast new docks stood almost empty for the first few months. Their answer was to offer the Clan Line, which operated steamers to India and South Africa, to dock at Tilbury instead of the Royal Albert, in return for half rates for ten years. Others followed but to attract the business the docks operated at a loss. With Tilbury offering such low rates the Royal Docks and others had to do the same to maintain trade. Tilbury was to be the last dock system to be created by private enterprise as part of the Port of London.
The dock companies were under pressure from all sides and looked for any opportunity to reduce costs. The numerous wharves that had developed along the open river were taking away much of the business from the docks; shipping companies demanded the lowest berthing rates and were willing to shop around and negotiate between the various docks and wharves; and investors were dissatisfied with the low profits and dividends being achieved. It was too much for the East & West India Dock Company, which fell into receivership. In January 1889 they formed a partnership with the London & St.Katharine Dock Company to establish the London & India Docks Joint Committee.