Shipping Lines Seeking Freight Rates “Change”

Press, Volume XCV, Issue 28257, 20 April 1957, Page 10

Shipping Lines Seeking Freight Rates “Change”

(New Zealand Press Association)

WELLINGTON, April 19.

Discussions on freight rates for the coming export season have been held between shipping interests and the statutory authorities which market most of New Zealand’s main primary products. According to a statement issued yesterday by Mr William Marshall, chairman of ’the Dairy Products Marketing Commission, the Conference Lines have asked for “a change” in freights for dairy produce to take eifect on September 1.

Mr Marshall said negotiations were well advanced between the Commission and the Conference Lines for a three-year agreement to operate from that date.

Mr Marshall’s statement was referred to the Overseas Shipowners’ Committee which stated that during the last few months confidential discussions with the statutory authorities had been taking place regarding new freight agreements, but the shipping lines were not yet in a position to comment.

In September last year, the Dairy Commission, the Meat Board and the Apple and Pear Marketing Board reached agreement with the Conference Lines that the basic rates of freight on dairy produce, meat and fruit/ would remain unchanged until September, 1957, and that, in the meantime, negotiations would be carried on with the object of agreeing to conditions of service as the basis for a new shipping agreement.

Agreement Procedure “The agreement of last September provided that if either party desired a change in freight rates, it would notify the other party and the matter would be referred to an agreed firm of investigating accountants in England for evaluation and report of movements in shipping costs and other factors,” said Mr Marshall. "The lines have given notice that they desire a change to take effect from September 1 next, and, in accordance with the agreed procedure, the matter will be referred to the accountants for investigation. The accountants’ report will be an important factor in the determination of any change in rates of freight, but the agreed procedure is devised especially to avoid anything in the nature of a ‘cost-plus’ arrangement for fixing freight rates.

"Apart from the rates of freight, the shipping agreement

under discussion covers such matters as the area and frequency of service, loading and discharge ports, minimum quantities of cargo for loading and discharge, the procedure of allotting refrigerated and general cargo space, and general working conditions.

“One change that will probably be. made in the existing procedure is in the system of centralising dairy produce from certain areas in New Zealand for loading at New Zealand ports. The cost of this service, although borne in the first instance by the shipowners, is reflected in the freight rate and is therefore in reality borne by the dairy industry as a whole.

Decentralised Loading "The commission and the Dairy Board have agreed that each dairy company must accept the responsibility of placing its produce at its nearest loading port or the loading port it deems most suitable, and of meeting the costs involved.

"The last shipping Agreement affecting dairy produce, meat and fruit, was made in 1936, and was for a three-year term.

“From 1939 till 1954 when the bulk purchase system operated, the produce was sold f.0.b., and conditions and freight rates were negotiated between the shipping lines and the United Kingdom Ministry of Food. “Since 1954 the Commission and the other shippers have operated with the lines on a ‘holdin’ agreement based on the formal agreement of 1936. “The 1936 agreement and the agreement now under negotiation are based on the principle that the shippers will ship all their produce for the United Kingdom, the Continent, and certain other destinations in Conference Lines vessels, and in return for this undertaking the lines agree to maintain in the New Zealand trade a service sufficient for the conveyance of all dairy produce tendered for shipment to the areas named,” said Mr Marshall.