AIR EXPORTS REPORT All-Cargo Flights Uneconomic

Press, Volume CIX, Issue 31986, 13 May 1969, Page 32

AIR EXPORTS REPORT All-Cargo Flights Uneconomic

(New Zealand Press Association)

WELLINGTON, May 12.

The prospects for an all-cargo meat export trade by air from New Zealand are not bright, according to a report on the feasibility of air exports released today.

The report, commissioned by the New Zealand Meat Producers’ Board, said the main drawbacks were the great distances to the world markets and the fact of the small population providing a small base for the attraction of backloads.

However, there would be a steady growth in the *‘air fresh” lamb exJ ports, the report'said. - The board’s consultants. Air Vice-Marshal I. G. Morrison and Mr R. H. Bevin, said that on present freight rates, the profitable marketing of meat by air was confined to the Pacific Basin. “On the current scale of commodity freight rates, the profitable marketing of meat by air from New Zealand is primarily confined to the Pacific Basin, probably extending to the eastern seabord of North America,” the report said. “There is little indication that the markets beyond this can absorb the higher transport charges involved." The first of the new generation jumbo jet aircraft as allcargo carriers would not reduce rates below the ruling specific commodity rates. “No major technological break-throughs are in sight to lower substantially the pres-

ent operating costs of aircraft,” the report said. “Even our high-quality, efficiently-produced, low-price meat, sent by air transport, would be priced beyond the reach of the great bulk of local populations, except in Australia and North America. “The prospects for the export of beef by air may be confined to the hotel and restaurant trade of South-East Asia and the Pacific islands for at least the near future.” Growth Expected The demand for fresh lamb, however, offered prospects which could lead to a substantial market in North America. “We expect further growth of air-fresh meat exports for the next three or four years,” the report said. “The return in overseas funds per ton could be more than double that from the traditional British frozen lamb market. There is an expanding number of customers who want fresh meat.”

The consultants said they considered that fresh and frozen lamb were not in conflict.

“Indeed, at this point, it seems sales of air-fresh lamb would help to promote our frozen lamb,” they said. But until the export of lamb by air expanded considerably, the quantity sold would be but a small percentage of total output. The fresh meat market in Australia should be fostered.

“The air export of meat can yield an adequate return to the exporter for specific types of meat delivered to specific markets.” the report said. “The operation has not reached, and may not reach, a point where a higher price to the producer could be paid.

“A larger market for airfresh meat, with reduced incidental costs and higher returns, is needed before the trade could offer higher returns to producers.” Overseas Funds Trials had shown that airfresh lamb sent to North America and Honolulu could make an additional return of SBOO to 81000 per ton' net in overseas funds more ; than the equivalent sold in 1 Britain at frozen carcase prices. The economic viability of . marketing by air depended on ; three things, the consultants ’ said. These were: Obtaining a high price by ; New Zealand standards ( for the more valuable cuts of meat The selection of cuts suitable ’ to each specific market, i with cuts prepared and packed to customer satisfaction for each market. The specific air commodity freight rate to the specific market and the space available at such rates. “When the demand for airfresh meat grows to the point ■where specific commodity space for meat is about to be saturated, the time to reassess the feasibility of allcargo operations will have arrived,” the report said, i “So far, the prospects are' J not bright for an all-cargo' 'meat export trade.” Useful Report The chairman of the Meat 1 Board (Sir John Ormond) ’ said today the board’s con- ■ suitants had produced a com- ' prehensive and useful report 1 which would be of interest to : farmers and meat exporters, ‘ as well as to the aviation in- ' dustry in New Zealand and overseas. New Zealand exporters ’ would find much of interest ' in the report. ; “The high costs of air ’ transport are well documenti ed, and the economic im1 practicability of mounting . bulk air-freighting operations from New Zealand to its marJ kets overseas will be a dis- ' appointment to many people who were hoping for a breakthrough in marketing by air with the new jumbo jets,” he said. The specific nature of air transport economics and marketing by air were emphasised in the report. Optimistic forecasts of air cargo growth obviously needed to be less generalised than previously. New Zealand’s small population was a handicap to both sea and air external transport. It gave an imbalance in load factors in exports and imports. The great distances from main potential markets for primary produce affected air transport more than sea transport. Opened Markets Nevertheless, the board’s consultants had outlined the expanding possibilities of marketing fresh meat by air at the cheaper specific commodity rates in aircraft designed primarily for carrying passengers. The consultants had successfully opened up two distant additional markets, Honolulu and Vancouver, in the course of their examinations.