ZIM was founded on June 7, 1945, as the ZIM Palestine Navigation Company Ltd, by the Jewish Agency, the Israel Maritime League and the Histadrut. The first ship was purchased in 1947. This vessel was refurbished, renamed SS Kedma, and sailed to the future state of Israel in the summer of 1947.In 1948, the company was renamed ZIM Israel Navigation Company Ltd. During its first years, its main task was transporting hundreds of thousands of immigrants to the emerging state.The company continued to purchase more ships, among them SS Negba, SS Artza and SS Galila.

In 1953, some of the money from the reparations agreement between Israel and West Germany was allocated to the purchase and construction of new ships. The SS Bergensfjord, renamed Jerusalem, sailed the Israel-New York route,Another ship purchased with reparations money was the SS Theodor Herzl .

The company took delivery of its first new vessels, the 9800 ton passenger-cargo liners SS Israel and SS Zion - later known as SS Dolphin IV , in 1955 and 1956, respectively. 1957 saw the delivery of two more new ocean liners, the 10,000 ton sister ships SS Jerusalem and SS Theodor Herzl, followed by the more modest, 7,800 ton SS Moledetin 1961, which featured an all-Tourist Class layout, targeted principally to American tourists looking for affordable transportation to the Holy Land.

In 1950s and 1960s, ZIM concentrated on passenger ships, alongside a constant expansion of the cargo shipping business. Passenger liners were a common means of international transport before the emergence of cheap air transport, and pleasure cruises were also popular. ZIM sailed the Mediterranean Sea, as well as having regular routes to the United States. Some of its ships cruised to the Caribbean during the winter. 1964 saw the completion of the 25,000 ton ocean liner SS Shalom, which turned out to be a failure, marking the end of the ZIM passenger shipping era.

Due to rising airline competition and the market failure of the expensive new Shalom, passenger services were gradually phased out between 1966-1969, as ZIM refocused on cargo shipping. Jerusalem was chartered out to British-based P&O Cruises in 1966 to become their Miami, then sold entirely in 1968. The sisters Israel and Zion were both sold in 1966, while the expensive, new Shalom was retired and sold in 1967. Theodor Herzl and Moledet completed ZIM's final transatlantic passenger sailings during 1969 and were sold off, marking the end of the company's passenger division.