Devaluation Effect On Shipping Line

Press, Volume CIX, Issue 31923, 26 February 1969, Page 30

Devaluation Effect On Shipping Line

(N.Z.P.A. Staff Correspondent) LONDON, February 25. The P. and O. shipping line lost valuable passenger traffic when New Zealand devalued, according to the annual report. However, sterling devaluation helped passenger revenue.

Although devaluation resulted in a substantial increase in costs, it enabled a flexible policy of selective fare adjustments aimed at giving maximum revenue, the report said. “In the United Kingdom, where it was considered necessary to increase fares to keep pace with rising costs, the selling task was made more difficult. “In New Zealand, an important source of revenue which devalued by more than the United Kingdom, a proportionately larger increase had to be imposed and traffic inevitably suffered." The company made up these losses, however, through the countries which did not devalue. N.Z. Cargo P. and O. also suffered a loss of cargo carried to New Zealand through successive reductions in the level of import licence quotas. Outward rates of freight were increased. “In the homeward trade from New Zealand to Britain and Europe, the tonnage of refrigerated cargoes maintained a similar level to that of the previous year, except for fresh fruit shipments which have continued to rise each year. “Wool shipments also increased. At the end of the 1967-68 season homeward rates of freight were increased 3.7 per cent on contract refrigerated cargoes, and 81 per cent on wool.” P. and 0., parent company

of the New Zealand Shipping Company and the Union Steam Ship Company, made a profit of sl9m for the year ended September 30, 1968, compared with s9m in 1967. It is at present undergoing its biggest expansion, with 24 ships on order worth slBom due for delivery within the next three years.