Shipping freight rise “serious”

Press, Volume CX, Issue 32462, 24 November 1970, Page 1

Shipping freight rise “serious”

The increase of 121 per cent in freight rates announced yesterday by the New Zealand European Shipping Association has been described as an “extremely serious situation for everyone in New Zealand—not only the importers.”

Giving this view, the director of the British Trade Association, Mr L. B. Crompton, said in Wellington that significantly more than a third of New Zealand’s imports came from Britain and Europe and would therefore carry the higher impost of the increased freight rate, according to the Press /Association.

“It makes complete nonsense of the import licensing system. Licences by now will have been committed and it means that fewer goods will be available for New Zealand. The implications of the freight rise are extremely wide ranging,” he said.

“It will certainly emphasise | the greater need for wage I stabilisation in all quarters,” I said Mr Crompton. “Warning given” I However, Mr J. H. Meyer, chairman of the New Zealand European Shipping Association, said in Wellington that repeated warnings that world-wide cost increases would force higher freight rates apparently had been overlooked in New Zealand. He was replying to criticism of the increase. He said in a statement: “Surely the critics do not expect shipowners to absorb all cost increases. “As announced, the 5 per cent rise applicable from October 1 did not even cover the escalation of costs for the previous year. “Apart from cost rises in overseas countries whose ships serve New Zealand, there have been significant increases in New Zealand too. “For berthage, pilotage and port charges based on five days in port, vessels of average size this year are paying increases ranging from 15 per cent to 39 per cent.” he said. "The increase in waterfront wages since 1969 is 29 : per cent with the 3 per cent; ;eneral wage order still to be included. Coastal rates "Coastal shipping freights have risen between 20 per cent and 30 per cent since August Pacific Island rates, which must be paid on cargo transferred from overseas ships, have increased by between 15 per cent and 17 per cent since July. “Railway freights were to have increased 12 per cent on December 1 and passenger fares by 10 per cent on February 1.

“National Airways freight and fares charges went up 7.5 per cent in June and there is an application for a further 12} per cent increase as from January 4. Killing rates for mutton and lamb at works such as those in Canterbury and Otago had risen by between 17 and 20 per cent since November 16. There was no doubt that being involved in international trading we were caught up in the increase that was happening throughout the world but it was quite incorrect to claim that the overseas cost spiral was solely responsible for freight increases as New Zealand cost rises played an equal part in the total cost for imported cargo. “Very disappointed” The Prime Minister (Sir Keith Holyoake) said he was very disappointed that freight rates from Europe would be increased. “The shipping companies will surely realise equally with us that this substantially increased freight charge is going to make imports into New Zealand dearer, deplete still further our overseas funds, influence adversely the use of Britain as a source of our imports and increase prices to the New Zealand importer, farmer, manufacturer and consumer,” said the president of the Associated Chambers of Commerce of New Zealand (Mr A. R. Simm).

“We deplore this increase but after all we cannot expect the shipping companies to absorb higher costs which

» other business concerns cane not absorb. ” “It becomes more pointed that we have to put our domestic house in order that we may remain competitive price-wise on world markets. “The increase heavily un- - derlines the urgent necessity - for New Zealand to maximise i its export earnings by increast ing our production, employee s productivity and our exports t from both farm and factory, i in order to keep afloat,” said I. Mr Simm. One line - The increase was a “glaring • example of a country being exploited by putting its ecor nomic future in the hands of > one shipping line,” said the r president of the Federation : of Labour (Mr T. E. Skinner). “If the Government is not 1 in a position to control this ! kind of situation—and it > should be, even if it means ; subsidies or something—then 1 the freeze is not going to be very effective,” he said. ■ Speaking from Auckland ! Mr Skinner referred to the ’ loading on to New Zealand ! shoulders of spiralling costs ' overseas. New Zealand’s economic future was in one shipping ' line—a consortium of ship--1 ping companies where there was no competition. ' “As long as this persists we will be held to ransom from time to time,” said Mr Skinner. “This must bring home to I the- Government the need for

a New Zealand-owned and operated shipping line, with the Government having a majority of control. “It is time we had some strengthening in our negotiations. We are negotiating from weakness,” said Mr Skinner. Unless there was an alternative to the consortium then New Zealand had little choice but to accept its decisions. 18 per cent < Manufacturers would be dismayed that an increase of 12} per cent following hard on the heels of the recent 5 per cent increase, represented a total rise of more than 18 per cent in less than six months, said the president of the New Zealand Manufacturers’ Federation (Mr L. H. Stevens). “One of its worst features is that compensation is being built into the permanent freight rates, to be paid by the user of the cargo in New Zealand, for the cost of industrial disturbances in Britain and Europe. “A rise of 12} per cent must increase production costs in many industries. The price justification scheme will be operating and I hope that industry will be authorised to recover the extra cost without the need for a host of individual notifications,” he said. The president of the New Zealand Bureau of Importers (Mr C. McPhail) said tnat the group of imports most affected would be motor vehicles, textiles, machinery, chemicals and raw materials. Mr McPhail predicted that other supplying countries outside Europe might be able to undercut Europe’s exports.