FREIGHT-CUTTING REPORT DENIED

Press, Volume CXI, Issue 32566, 27 March 1971, Page 20

FREIGHT-CUTTING REPORT DENIED

Both the Cunard Steamship Company and the Blue Star Line, two of Britain’s biggest shipping companies, have denied a report published in the “Australian Financial Review” this week that they would be prepared to carry Australian wool to the United Kingdom and Europe next year at rates about 30 per cent below those charged by the Conference Lines, of which they are members.

In Wellington yesterday Mr K. H. Churchouse, ’eneral manager of Blue Star Port Line (Management), Ltd, said he had received a communication from London which stated that Sir Basil Smallpeice, chairman of Cunard, which is owner of the Port Line, and Mr E. Vestey, chairman of the Blue Star Line, “both categorically deny that their companies are separately or collectively tendering for the carriage of Australian wools to the United Kingdom and Europe outside the Conference as reported in the “Australian Financial Review” of Monday of this week.

However, while printing a similar official denial from the two companies on Wednesday, the “Financial Review” carried an article by James V. Ramsden in which he predicted that within two weeks the Australian wool industry would be supplied with full details of the offer. According to advice received in New Zealand the Australian Wool Board will neither confirm nor deny the report. INSURANCE In initially disclosing that the two lines were preparing to quote outside the Conference for both wool and meat, Ramsden said that their action was an insurance against the possibility that the Australian Wool Board and other Australian wool interests would be successful in their campaign to have wool shipped more cheaply under contract and outside the Conference system. The Australian Wool Board recently reported to the Australian Wool Industry Conference that the Conference service to Britain and Europe

had been priced out of reach of the industry.

According to Ramsden, the proposed freight rate, which the two companies were offering, was 3.12 c Australian per lb, compared with the Conference net basic service rate for the container service to the United Kingdom of 4.58 c per lb and with the Conference conventional rate of 4.31 c. This would amount to a discount of 31 per cent on the container rate.

THREE-YEAR CONTRACT It was envisaged that the contract would be for three years but would provide for price rises during its currency.

Ramsden said the details that would be given to the Australian wool industry would include not only the full sailing schedule of ships to be used in the proposed service and their dead weight tonnages, but also an estimate of the anticipated total freight earnings from the south and north bound legs of the voyage. Provisionally revenue earnings from freight, with commissions, was estimated at $35.5m, while total net revenue over costs was estimated at $20.8m. The offer, Ramsden said, was “remarkable also for the fact that officially it does not exist.”