Ship Freight Increases To N.Z. Expected

Press, Volume XCV, Issue 28268, 4 May 1957, Page 11

Ship Freight Increases To N.Z. Expected

(Rec. 7 p.m.) LONDON, May 3. Increases in freight rates by several international conference lines in recent months suggest that when New Zealand Conference Lines and representatives of the Dominion’s marketing boards discuss “a change” during their talks in July, a main point will not be whether there should be a rise in rates, but rather how much that rise should be.

In the last five months increases varying between 5 per cent and 14 per cent, have been announced by conference lines whose ships ply between the United Kingdom and Canada, the United States, South America, East Africa, India, Ceylon and Australia. In every case the reasons given have been steeply rising operating costs, including a rise in price of fuel oil.

The fact that the New Zealand lines have also been affected by higher costs is made plain in the recent annual report of one of

their members, the New Zealand Shipping Company. This said that the company’s consolidated operating profit for 1956 was £653,481, compared with £1,266,094 in 1955. The net profit for the year was £184,824, compared with £607,036. It also said that the unsatisfactory results of the year’s trading were due largely to heavy increases in operating costs which had not been accompanied by corresponding- increases in freight rates. The company reduced its dividend and no transfer was made to reserves used to replace its fleet. Whether other members of New Zealand Conference Lines have similar figures to report for 1956 has not yet been indicated publicly, but nobody would be surnrised if there werp some repetition of the New Zealand Company’s results. No doubt these figures will be produced for the July discussions, together with the fact that while Australian freight rates have been increased there has been in New Zealand rates for nearly

two years. The last increase, in 1955, was 5 per cent. Unfortunately for New Zealand, while shipping companies have been affected by increasing costs, prices for certain Dominion primary produce, notably butter and cheese, have fallen sharply during the last nine months, and the increase in freight rates would undoubtedly hit the New Zealand dairy industry at an unpleasant moment.

Pending the July talks the subject is apparently regarded as sub judice by both the lines and the marketing boards, but sooner or later it will have to be referred to publicly, and informed comment is that unless the unexpected happens, the New Zealand public should be prepared* for news that may have some effect on the earnings of their exports and also no doubt the price of their imports.