The Dominion TUESDAY', JUNE 28, 1921. THE SHIPPING OUTLOOK

Dominion, Volume 14, Issue 234, 28 June 1921, Page 4

The Dominion TUESDAY', JUNE 28, 1921. THE SHIPPING OUTLOOK

A movement in Australia to secure a substantial reduction in shipping freights on frozen meat exports was carried to an interesting stage last week. According to newspapers which arrived yesterday, a conference of meat exporters, sitting in Sydney, decided to notify the oversea shipping companies that at present market values for meat in London and present rates of freight, only an infinitesimal quantity of frozen meat cargo is likely to be available for export from Australia during the next six months.

If fieight on frozen meat and frozen sundries is reduced by |d. per lb, this conference, is of opinion that there will be not less than 30,000 tons additional from Australia of beef, mutton, lamb, and frozen sundries.

The outcome has not yet been disclosed —the representations of the conference were cabled to shipowners in London —but the Sydney Morning Herald reports, in spite of previous statements to the contrary, that an authoritative opinion had been given that there is “a very good chance of owners meeting the meat exporters and reducing the freights as suggested by the resolutions of the conference.” The action taken and the prospects raised are of considerable interest from the standpoint of producers and exporters in this country. Australian and New Zealand freight rates on meat exports are at present approximately on a level. The reduction of |d. per lb. suggested in the Commonwealth would amount to nearly 40 per cent. If such a reduction is secured in Australia, much interest will centre on the extent to which the position in this country is determined by the contract lately concluded in regard to the remaining meat exports of the present season and those of next season.

The possibility of new developments in the shipping situation has appeared in various directions lately. On the agenda of the Imperial Conference, questions of inter-im-perial transport rank second in im portance only to problems of international relationship and adjustment. It is noteworthy also that our own Prime Minister, while he advocates a measure of Imperial control over shipping services, declared a week or two ago, when he and other Dominion representatives met a number of British shipowners; that the time had come for Australia and New Zealand to work together in the Pacific to a greater extent than hitherto. It is possible that Mm Massey had in mind the suggestion mentioned the other day in a cablegram from Melbourne that Now Zealand might contribute to the enlargement of, or, at any rate, work in conjunction with, tho Commonwealth Shipping Line. Before leaving for London, he stated in plain terms that if it became necessary to establish a Dominion shipping line he would prefer an organisation in which the State would cooperate without assuming sole responsibility and control. Within the. limits thus implied, however, it is no doubt open to Australia and New Zealand to co-onerat" with mutual benefit in securing shipping services on a satisfactory basis. It is, of course, obvious that a reduction in freights, not only on meat, but on wool and other commodities, is a factor of capital importance as it bears.on trade recovery, and that it is a matter of imperative urgency to follow un actively any means that may offer of securing such a reduction. The whole outlook may be greatly cleared and improved if shipowners agree to make concessions as substantial as that now advocated in Australia in re spect of freights on meat. Hitherto oversea shipowners have met all requests for the substantial reduction of export freights from this country with a contention that the ruling 'rates arc warranted by working costs. No doubt working costs do affect the position, but all authorities agree that freights at the post-war boom level are a thing of the past. Recovery from the present extraordinary slump in the shipping trade must depend in a great measure upon such a reduction in working costs as will make it possible to operate ships with freights adjusted at a relatively moderate level. It seems quite certain, also, that even under the most favourable conditions of recovery it will be a long time before the whole of the mercantile tonnage available is effectively employed. At a recent date, according to the shipping correspondent of the Financial Times, something like eight million deadweight tons of British shipping were laid up. In the United States nearly all the Shipping Board’s shins, and in Norway close on a million tons of shipping were idle: and France, Holland, Japan, and Spain also were finding little)employment for theif ships. Of late there have been some fluctuations in freights, and at times an upward movement occasioned by conditions arising out of the "British coal strike and the recent maritime strike in America, but on available information no very important increase in cargo freights has resulted. The correspondent above quoted mentions that early in May freights in the region of 50s. per ton were paid for the voyage from the River Plate to the United Kingdom as against 325. 6d. a month earlier. The higher rate, however, compares with a Government freight of 112 s. 6d. paid last year for <i similar voyage, and with freights of 150 s. per ton secured last year by free tonnage on voyages from the River Plato to the Continent. The correspondent of the Financial Times observes that "all movements in freights during the next month or two will bo governed by the labour d’fficulti'>s. and if the termination of the strikes here (the United Kingdom) and in the States leaves- homeward rates at a certain level, it is certain that »« soon as bunkers are available t.h<’ markets generally will be flooded with tonnage offers, and then there will be another collapse.” Further light is cast on tho existing position by a passage in the annual repo-t of the British Salvage and Towag" Company, which was published last month. It mentions that "argo steamers which, not during the war, but at a very recent date, were valued at about £25 to £3O per ton dead-weight, have lately been sold down to £5 per ton. It is a feature of the situation that some working costs are still high, but it is generally contended that an all-round reduction in working costs Is essential

to recovery in shipping as in other departments of trade. This was emphasised, for instance, by Lord Weir in some proposals he advanced last month for the settlement of tho coal strike. Observing that cheaper coal was essential to iron and steel industries, transport services and other undertakings in the United Kingdom, “in order that we may start a much-needed revival of trade.” he quoted Mr. W. T. Layton. Director of the British National Federation of Iron and Steel Trades, as stating that these trades could resume enterprise with coal at 20s. per ton. “My view is,” Lord Weir added, "that a certain revival might be looked for [with coal] at a slightly higher figure, provided a further substantial fall could be anticipated at an early date.” It will be remembered that in December last year, British export coal realised as much as 81s. 2d. per ton, and that in March the price; had ■ fallen to 325. Id. per ton. In view of the present trend, not only in regard to the prices of coal, iron, and steel, but in other industries, shipowners are in a position to count confidently upon a reduction in working costs which will enable them to stimulate trade by fixing freights at a comparatively low level.