EFFECT OF RISE IN FREIGHTS

Press, Volume XCI, Issue 27663, 20 May 1955, Page 9

EFFECT OF RISE IN FREIGHTS

Fall In Value Of British Exports (N.Z. Press Association—Copyright) LONDON, May 18. The values of British exports to Australia are expected to fall by about 1 per cent, as a direct result of the decision to increase freight rates from Britain on- July 1, according to trade’ circles in London. The increase is also expected to add about 1 per cent, to merchants’ bills in Australia. The United Kingdom-Australia Shipping Conference Liries announced recently their decision to increase freight rates from Britain to Australia by 10 per cent, because of “increased costs.” . The chairman of the Australian and New Zealand section of the London Chamber of Commerce (Mr R. L. Sandover) said today that freight rates represented 10 per cent, of the cost of the- goods when landed in Australia. The effect must, therefore, be a reduction by about 1 per cent, in the value of exports, and the addition of about 1 per cent, to merchants’ bills in Australia, Mr Sandover said. He added that there would be little likelihood of any increase in the price of British goods in Australian shops. British cement exports would be one of the hard-hit lines. They carried a high proprotion of freight charges compared with their sales value. COMMENT BY “THE TIMES ” (Rec. 10 p.m ) LONDON, May 19. “The Times” today defended the pending increases in freight rates between Britain and Australia and New Zealand. The announcement of the increase “seems to have raised a storm out of all proportion to the reception with which price increases of this magnitude normally invoke in an inflationary world,” it said. It was hard to feel that the proposed increases were unreasonable. There was a continued increase in all items in operating costs and also in the cost of new ships. Freight rates at present ruling dated from 1951 for both outward and homeward cargoes on New Zealand routes; from 1952 for outward cargoes to Australia; and from 1953 for homeward cargoes from Australia. “The Times” said the Australian trade had been less remunerative than New Zealand and this» accounted for the higher rates proposed for Australia. Costs naturally tended to be augmented by Australia’s long coastline and further augmented in recent years by the unreliability of labour in Australian ports by the high cost of dock services and by the failure to improve port facilities since the war. The newspaper added: “This is a bad psychological moment for increases in freights. But in fact the shipping lines’ figures for past increases in costs and freights seem unimpeachable and those figures suggest that the minimum has in fact been proposed.” ATTITUDE OF N.Z. GOVERNMENT ■ANNOUNCEMENT MAY BE MADE SOON (New Zealand Press Association) - WELLINGTON, May 19. The Goveriynent may make an announcement soon on its attitude to the move of shipping companies to increase freight rates between Britain and New Zealand from July 1. The Prime Minister (Mr Holland) and the Minister of Agriculture (Mr K. J. Holyoake) had discussions this afternoon, but no statement was made afterwards. It is thought the Government’s main action would be to co-ordinate . the efforts of interested parties, which could then negotiate with the ship- , ping companies. The companies also propose to increase the rates on freight from New Zealand to Britain on October 1. An estimate of the cost to New Zealand of the rise in freight rates , will be submitted by the Reserve Bank to the Royal Commission on . Monetary Affairs. The bank’s gover- , nor (Mr E. C. Fussell) said this today i when answering questions by Mr F. . P. Walsh at a commission hearing.