“Start Own Shipping

Press, Volume CV, Issue 31001, 5 March 1966, Page 1

“Start Own Shipping

The chairman of the Shaw, Savill Line, London, (Mr J. A. MacConochie) yesterday said New Zealand was invited to start its own shipping line if it wanted to for exporting overseas.

He said this at an informal shipping and trade conference with the trade promotion committee of the Canterbury Chamber of Commerce, in Christchurch. Mr MacConochie had just been told by the immediate past president of the Christchurch chamber (Mr A. R. Mackay) that New Zealand exporters, in some instances, thought it might be better for New Zealand to have competition in shipping for overseas exports. “In fact there is no competition in shipping from New Zealand,” said Mr Mackay. “You shipping companies pass your costs on.”

Mr MacConochie commended Mr Mackay on an excellent statement. But there was a clause in the agreement, that did not permit shipping companies to have a cost-plus basis, he said. “It is subject to negotiations.” Not Cost-Plus “The formula is not a costplus basis. Figures are produced by your independent accountant. And on this we discuss the rate of freight.” Mr MacConochie asked Mr Mackay how many increases in freight rates there had been in the last 15 years. Mr Mackay replied that there had been three. Mr MacConochie said that four increases was the correct figure. “I have a chart, that shows that freights have gone up less than anything else,” he said.

Mr Mackay said that members of New Zealand Associated Chambers of Commerce believed shipping companies were operating on a cost-plus basis. Very many arguments had stemmed from this belief. Mr MacConochie: “We are

not on a cost-plus basis. If were were on a cost-plus basis, how is it our average return on capital investment is 3.6 per cent?” Mr Mackay: “You could be using your New Zealand business to help you to cover up business elsewhere.” When told by Mr MacConochie that his ships did a lot of business with Australia, Mr Mackay suggested that New Zealand m ”ht be paying to help Mr MacConochie with losses on his Australian business. “Just As Tough” “You have not met the people in Australia, who are just as tough as here,” said Mr MacConochie. Mr MacConochie said that there was little competition in rates in major transportation services in the world today. Four British companies —entirely separate—charged the same rates, as did world airlines. “The whole world over." he said, “you generally pay the same charge to go from point A to B.”