SHIPOWNERS AND THE WAR

Dominion, Volume 8, Issue 2420, 27 March 1915, Page 29

SHIPOWNERS AND THE WAR

LACK OF VESSELS CAUSE OF PRESENj DIFFICULTY CONGESTION AT THE PORTS In view of the discussion which lias arisen oyer the reason for the present high freight charges, and the consequent rise in tho prices of foodstuffs, remarks the "Financial News," special interest attaches to the annual report of the Liverpool Stean Ship Owners' Association, which has just been issued. The association owns 21 per cent, of the total British steam tonnage afloat,' and 35 per cent, of the total number, of steam vessels above 5000 tons, and the members have therefore had to bear their full' share of tho anxieties and risks resulting from the war, and can speak with .authority. Moreover, in the course of the report an elaborate examination is made into the causes of the present dearth of shipping, accommodation in Britain and the congestion at the ports. At the outset credit is taken for the fact that the shipowners' associations were able to bring the State insurance scheme into full operation immediately on the outbreak of war, but it ispointed out that the re-establishment of international credit was a slower process, with the result that for a time cargo shipments were so restricted that the regular liners could be only run at a, loss, with part cargoes, both outwards and homewards, while many vessels engaged in the general trade of tho world were unable to obtain any employment at all. By the end of September the financial difficulties were ill the main overcome, and the flow of international trade was restarted, but the break in the continuity of sailings had in tho meantime brought .about. an arbitrary distribution of tonnage having little, if any, relation to the usual autumn requirements of the carrying trade of the world. Further, the abnormal demands imposed 011 the loading and discharging facilities of the ports in the attempt to deal with both the trade which had accumulated during the period of stagnation as well as with' the current trade, increased most seriously the cost incurred and the time occupied in the handling of- the cargoes. Shipping Tonnage More than Sufficient. In order to ascertain the .causes, and show the difficulties with which shipowners have now to contend, the association caused an inquiry to be made into the volume of trade dealt , with in the last five months in the ports of the United Kingdom. ' This inquiry has,_ it is stated? established that the existing congestion in the ports, and the consequent rise in freights, in the cost _ of handling and in prices, ..has not arisen from either the want of ships or the shortage of quay space.. The ports have proved their capacity in other years to handle substantially more traffic than is now passing through them. The shipping tonnage available has been reduced both by the elimination of the ships of Germany, Austria, and Hungary, and also by the heavy demands made by the State; on the mercantile marine for both ships and men; but' reviewing the position as a whole there are good grounds' for stating that the shipping tonnage remaining available is more than sufficient to carry the volume of trade offering. If this, in fact, is the position, then the employment of more ships would increase and not diminish the congestion in the ports. TII9 object to be aimed at is the steady flow of trade through the ports, and if this can be restored and maintained it will only be a matter of time, and a comparatively short space of time, before the shipping' tonnage will be dis-

tributed so as to meet the requirements of trade all over the world. Causes of Congestion. In the opinion of the association the principal causes of the congestion'in .the ports of the United Kingd<m are as follow:—(1) The shortage of labour. It is contended that there are sufficient men in the ports to handle the trade. If this be.so, then it is manifest that the labour available is inefficient., because the ports are not dealing with the volume of trade which they have have dealt with in normal times. The shortage of labpur is not only on tho quays; it is also in £11 the transi>ort services by which the quays are cleared. (2) The heavy demands made by the Admiralty on the mercantile marine for both officers and ' men. In Liverpool there has hardly boen a foreign-going steamship during tho last six weeks which has been able to keep her sailing time. They have all been detained— some for hours and some for days— waiting to make up either officers or; crews. In normal times some 30,000 foreign seamen are required to enable the oversea trade of the country to be carried on, but, with mobilisation in Holland, Denmark, Sweden, and Norway, the sources from, which the best of these men have hitherto been drawn have been closed. (3) The heavy demands made by the Government on appliances such as tugs and lighters and railway trucks. (4) The heavy and unusual demands upon the quay and warehousing space in the' ports resulting from the Government importation of sugar. The Labour Difficulty. The main difficulty—that with regard to the labour—could', the report states, so far as the shore workers are concerned, be overcome by a better organisation of tho labour resources of the country, provided that when organised they were used to the best advantage. There are good grounds for believing that there are sufficient men in the country to deal with at least the normal traffic on the quays and on, the railways, but if these men are to be made available tliey must be organised by the State. Tho position of the existing workers in the porti must be recognised, but if a port is unable to deal effectively with the volume of traffic thrown upon it by the war, local labour must be supplemented immediately by labour from outside. No questions of pay or of hours are involved, but it is only.a State organisation which can guarantee the existing workers that their interests .will not be prejudiced and can compel the employment of that labour in the prompt removal of cargoes from the quays. For a time in London and in Liverpool and in other ports extraordinary exertion will be needed not only ori the part of the shipowners and .the dock workers, but also on the part of the cargo owners and the railways. The systematic working of overtime by all these interests and its cost must be faced, for the block is there and the volume of imports is increasing. If trade, both import and export, is to be restored to its normal volume it is clear that these extraordinary exertions will have to be 'continued until the end of the war, as the closing of some of the ports and the general diversion of trade must throw extraordinary burdens on those which remain open. So far as seamen are concerned it is obvious that the demands of tho Admiralty and of the merchant service can only be met-b.y obtaining, the help of our fellow citizens in the East. We need .the help of our Indian seamen as much as that of our Indian soldiers. i Profits on Insurance. In a separate part of" the ieport the results of the war risks insurance scheme is discussed. 011 the voyages started after the outbreak of the war, it is stated, the losses at the hands of the enemy in British ships and in the cargoes carried in those ships have been

estimated up to tho end of 1914 to amount to:— Ships £2,000,000 Cargoes ' 2,500,000 ' £4,500,000 The ships were during the months of August, September, and October insured almost entirely under the State schemo, but 6inco the middle of November it has been possible to place a considerable amount of the insurance on the open market at rates below the State rates. The State rates oil tho ships represented a charge of £3.57 per cent, for the live months, while thoso on the cargoes averaged £2.32 per cent, per voyage. The total value of the ships employed (other than, those taken as Government transports upou which the State assumed nil war risks) has been about £120,000,000, and' of the cargoes they 'carried during the five months about £500,000,000. Allowing for the lower rates_ charged in tho open market it is probable that the insurance has cost at least:— 3 per cent, on tho ships val- • ued at £120,000,000, equal' to £3,600,000 1.5 per cent, on tho cargoes valued at £500,000,000... 7,500,000 £11,100,000 Upon the basis of these estimates tho overseas trade has expended in premiums at least £11,100.000 to protect itself against losses which have amounted to only £4,500,000. It has followed, that the consumer has had to piiy r -in advanced prices, very much more than the cost of the actual losses incurred, and probably more than the total amount charged for insurance by the State and by the open market. .In the opinion of the association it is esscutial in order'to obtain the full advantages of the State scheme that the premiums should be maintained at rates sufficient to cover, but no more than cover, the probable losses.