10% FREIGHT RATE RISE WILL CUT N.Z. IMPORTS

Press, Volume CVI, Issue 31119, 23 July 1966, Page 3

10% FREIGHT RATE RISE WILL CUT N.Z. IMPORTS

The 10 per cent increase in shipping freight rates from Britain and Europe to New Zealand is expected to reduce further the quantity of the Dominion’s already restricted imports and to increase the prices of both imported and New Zealand goods.

The increase, which is higher than the recent 7f per cent rise in New 7 Zealand export shipping rates, was announced yesterday by British and Continental shipping lines trading to New Zealand.

It brought reactions of disappointment, concern and criticism from spokesmen for New Zealand importers, manufacturers, retailers and farmers.

The increase, which wili start in November, was attributed to increased costs, the Press Association reported.

The four British lines involved are the New Zealand Shipping Company, Shaw Savill, Blue Star and Port Line, and lines in France, Holland and Scandinavia are associated with the decision. The companies said there had been no change in rates for two years. The increase would be about 10 per cent. Mr W. N. Pearman, director of the Auckland Chamber of Commerce, said tough negotiation by the producer boards was said to be responsible for keeping the outward freight rate increase from New Zealand down to 7.75 per cent when around 10 per cent was sought. “How tough was the negotiating by the London Shippers’ Association—the socalled faceless men—on inward freights?” he asked.

“New Zealanders have the right to expect the shipping companies, operating on a cost plus formula, to make every effort to clamp down on rising costs,” he said.

“Manufacturers are bitterly disappointed at the announcement of a 10 per cent increase in shipping freight rates from Britain and the Continent,” said the president of the New Zealand Manufacturers’ Federation, Mr J. R. Maddren. “The size of the increase, which is substantially bigger than the increase in freight rates on New Zealand exports, is a most unpleasant shock.

“It will increase production costs, and thus the announcement gives point to my expression of concern only a few days ago about the cumulative effects of the series of cost increases being felt by manufacturers. “The increase will be another outgoing which New Zealand can ill-afford. It must still further curtail the limited financial resources we have available to sustain our flow of imports. “No doubt British exporters will also be very concerned about the extent of the increases because of the adverse effect on their ability to compete in price with other suppliers and because, inevitably, the increase will cut into our earnings and reduce the balance we have available to spend,” said Mr Maddren. “Major Problem” The freight rise would be another major problem to manufacturers and they would have to look to the Government for some help so that their production was not further cut, said the president of the Canterbury Manufacturers’ Association (Mr C. W. Mace) yesterday. The quantities of goods that a manufacturer could import had already been reduced by a cut in import licences. The freight rise could have some effect on the price of New Zealand-manufactured goods, depending on the imported content, Mr Mace said. Effect On Prices The public would have to pay higher prices for a smaller range of merchandise as a result of the increase in shipping rates, said Mr E. J. Parry, chairman of the importers’ committee of the Canterbury Chamber of Commerce, yesterday. On small articles of high intrinsic value the freight rise would have less effect, Mr Parry said, but on larger articles, where the freight value

was 10 to 15 per cent of the [goods, prices to the consumer [could be expected to rise appreciably. The retail price of a good quality British dinner-set could rise by more than £l. Importers would get less goods for the same amount of licence. “It will have quite a noticeable effect on the amount of imported merchandise that is available here,” he said.

“It will definitely put retail prices of goods up.” Mr T. M. Ashby, president of the Auckland Bureau of Importers, said the increase was “not unexpected and must be viewed with grave concern.” “Drives to increase export earnings are being nullified by invisible payments such as these increased freights,” he said.

An increase of 10 per cent in shipping, freight rates to New Zealand was a very serious matter which directly affected both importer and consumer, said Mr S. L. Moses, chairman of the Import Committee of the Associated Chambers of Commerce, in Wellington yesterday. “We are represented in London by an organisation with which it is customary for the Conference Shipping Lines to confer with regard to any increase in freight rates. Until we hear from them we are in no position to comment further,” said Mr Moses. British exporters, busy considering the effects of “the

long freeze” announced by the Prime Minister (Mr W’ilson), had little to say about the boost in outward rates of freight to New Zealand, reported a London correspondent of the Press Association. Most exporters, including the Committee for Exports to New Zealand, an organ of the British National Export Council, indicated they

needed time to consider the effects of the rise. It will not affect, however, the long line of British trade missions which are expected to descend on New Zealand f in the coming months. A delegation of machine t tool manufacturers will tour s New Zealand for nearly three L weeks from August 25, to be •• followed by a building materi- ials’ export group from November 5 to 16.'After this ? will come a mission from the s Scientific Instrument Manuf facturers’ Association. t Further missions will folf low early in the new year.