FREIGHT RATES.

Taranaki Daily News, 3 January 1922, Page 6

FREIGHT RATES.

BURDEN ON PRODUCERS. IMPERIAL COMMITTEE’S REPORT. A STRIKING REVIEW. An important report concerning the freight rates charged by the shipping companies trading between Britain and New Zealand has been issued by the Imperial Shipping Committee. Representatives of the Imperial Government, the overseas Dominions and commercial interests sit on this committee, which was established in 1920 in conformity with a resolution of the Imperial Conference. The New Zealand Government asked last year that. the committee should investigate the freight 'charged by the lines trading to New Zealand, and it placed before the Imperial , authorities at the same time a report of a committee of the House of Representatives, which had expressed the opinion that the freights were “unwarrantably high.” The Imperial Shipping Committee does not uphold this view. “The percentage of freight paid to the price received, c.i.f., has risen in the case of beef from 15.5 in 1913 to 42 per cent, in the summer of 1921; in the case of lamb the proportion is still low, 15.5 per cent, m 1921 as compared with 11.2 per cent, in 1914, while in the case of mutton the pre-war proportion of 13.2 per cent, compares with a present percentage of 26.8,” states the committee. “This rise in percentage of freight is no doubt largely responsible for the feeling among the producers that freights have been maintained at unduly high levels during the present depression. Freights are undoubtedly high, but it must be emphasised that the prices realised depend upon market conditions in the United Kingdom, which are only remotely connected with the cost of running ships. The evidence before the committee tended to show that shipping costs had risen by 1920 to about three times the pre-war level. Since 1920 these costs have fallen to some extent, but very much less than prices generally.

AN UNFAVORABLE COMPARISON. “To apply another test, we have examined the current freights for frozen beef from the River Plate. The two trades are in direct competition in the same market. The latest quotation for freights on Argentine frozen beef are I|<l per lb. corresponding with l|d plus 5 per cent, for the same commodity from New Zealand. The distances involved are approximately 6300 and 11,400 miles respectively, so that the rates on mileage basic are: .44d per ton per mile for the Plate trade, as compared with .35d per ton per mile for New Zealand. A closer comparison is afforded if we take into account the time occupied on the respective round voyages, including ; coastwise itinerary. In the ease of the Plate trade we understand this is about 90 days, while, owing to various causes, the round voyage to New Zealand now occupies in nearly every case well over six months. The’result is that, while a Plate vessel can earn under present conditions during the year on each pound of meat for which she has room about 5d as a maximum, the New Zealand vessel can only earn about 3£d. “Thus, whether we consider the costs of the shipowner relatively to the freights charged or the comparison with the River Plate trade, the argument thus far tends ,to show that, though the present freights are undoubtedly a heavier burden upon the New Zealand producer than the pre-war freights, or than the Plate freight may be on the producers in that region, they cannot be regarded as unreasonable when compared with either. As a third and final test we have made d-irect investigation into the question of profits derived from the New Zealand freights. The general evidence given to us by Lord Inchcape was to the effect that/ while the shipping companies concerned were making profits in 1920, the whole of those profits would be wiped out this year, and there was no prospect of any recovery in sight. In his judgment the big lines would be in a worse position at the end of ’920 than they were at the end of 1913. SCARCITY OF CARGO.

<f We have had before us more specific evidence. Through the courtesy of certain shipowners engaged in the New Zealand trade, definite audited information as to the out-goings and incomings for a continuous series of round voyages in that trade during the first half of the present year (1921) were made available in confidence, and the results were submitted to the committee. We are of opinion that these show, even if we attach relatively low capital values to the ships in question, that the freights earned were not unreason able.

“The unusually prolonged round voyage in the New Zealand trade intensifies the disadvantages at which that trade is placed as compared with the Plate trade. We have accordingly made careful inquiries into the general conditions of the New Zealand' trade, and have obtained statements from the shipning companies concerned. From these "statements it appears clear that the prolongation of the voyage is . largely due to the practice of collecting the cargo of the same ship at many different and widely distant .ports,, and to the multiplicity of parcels and of marks, sub-marks and grades, the sorting of which on discharge involves loss of time and extra-labor. Undoubtedly the earning capacity of the ship would be considerably increased, or. in other words, the cost of transport would be reduced if some practical steps could be taken to simplify these practices. With this object in view the shipping companies and the shippers might advantageously cooperate. “A further factor of much importance has to be kept in mind. At present out ward cai go to New Zealand is very scarce, and consequently the homeward caro-o has to hear a disproportionate share of he cos t of the round voyage. Tn 1913 the total weight of iron and “steel •products exported from the T mled Kingdom to New Zealand was 114.090 tons, but during 1920 it was only 54.000 tons, and during the first seven months of 1921 it was 18.000 tons. The figure? for all the United Kingdom exports to New Zealand are roughly 160,000 tons in 1913. 89.000 tons in 1920, and 35.000 tons during the first seven months of “Our general conclusion is that, under existing conditions, the current freights charged by the lines trading to New Zealand are not, unreasonable.” A statement a? to the conditions of the New Zealand trade was placed before the committee by the Shaw, Savill and Albion Company, Limited. The comnasy waotaiied the difficuitiea

from the multipieity of marks. The statement, was as follows:

“The difficulties which have to be contended with and which cause much direct and indirect expense to the shipments are chiefly the following: (a) The numerous freezing works whose output has to be lifted, and the number of ports which have to be visited. (b) The multiplicity of bills of lading required by ship} ts from each freezing work, the multiplicity of separate marks on most of the bills of lading, the number of consignees and the splitting up of the deliveries by the consignees. (c) The inadequacy at times of the storage accommodation in Britain, leading to excessive delays in discharge. (d) The go-slow policy here and in New Zealand of the workmen.

“In regard to (aj there are thirtynine freezing companies or works in New Zealand each with a separate output. There are eighteen .ports, each of which the steamers are required to visit to lift the meat at least once a month during the season. Many of the works have limited storage accommodation and all desire the promptest clearance of their prepared output. These works occur from Whangarei at nearly the extreme north of New Zealand to the works at the Bluff in the extreme south; most are situated on the east coast, but some are on the west. “In regard to (b), probably the experience of the Matatua, now discharging here, will give some idea of the conditions. This vessel is not exceptional except that she does not carry as much meat as some of the otyier steamers in the trade, and the details of marks, etc. are rather better than the average; moreover, she loaded meat at only two ports :

Number. Careases shipped 1'16,002 Separate bills of lading 181 Separate marks 701 Separate marks each of 10 earcases or less 158 Consignees -v 82 Deliveries 196

Under such conditions mis-deliveries are inevitable* and cargo left on hand never realises’ the amount claimed and paid for short deliveries. The position in regard to (c) is doubtless well known to your committee. Discharge has frequently had to be delivered in commencement and later stopped for want of accommodation for the meat; this holds up the steamer and increases the cost of the discharge. “In regard to (d), the following are a -few instances of the time occupied in New Zealand in loading (a portion of the time being occupied in changing ports) and in Britain in discharging the steamers. Steamers marked (c) arrived in New Zealand empty:

“In our view (a) is not likely to be remedied materially, the New Zealand desire for localisation being so strong; that, however, is beyond the shipowners’ influence or control. We believe (b) might be materially improved without disadvantage to individual shippers, but this again lies outside of the shipowners’ province. Undoubtedly (c) can be remedied and we trust (d) will gradually be improved as the general disruption during and following the war is replaced by a more moderate attitude on the part of the workmen and an approach to normal conditions ensues. “Manifestly any diminution in the number of ports visited, any reductions in the work of sorting and delivering with resulting claims, any more rapid discharge and any better work done will, separately or in combination, result in diminished expenses and so enable the shipowner to carry the cargo at lower rates of freight.”

Steamer . In NX Arrival in Waiwera London until discharged. 41days 3Odays Zea.la.ndic (c) ... 46days 25days Maimoa (e) ..... 54days 44days Corinth ic (c) ... 40days 3Odays CRaranga ........ 64days dndays Waimana (c) ... 33days 3odays Mahana 48days 40days