Some inflation in freight rates

Press, Volume CXII, Issue 33034, 29 September 1972, Page 1

Some inflation in freight rates

New Zealand meat has excellent prospects in some European countries but, in the face of inflation, freight rates to those markets are bound to increase.

These points were made by the chairman of the Meat Board (Mr C. Hilgendorf, of Ashburton) when he returned to New Zealand yesterday, after a five-week visit to the United Kingdom and Belgium. Mr Hilgendorf had negotiations with shipping comnanies on freight rates, a topic he described as very complex.

Already a 7 per cent increase has been announced, with provision for a halfyearly review. Asked if this would not present the export meat companies with problems in deciding what to pay producers, he said he did not think they would have any more difficulties than when a a big increase was announced at the year’s end. “While governments allow inflation to continue we are going to have increases in freight rates,” he said.

Mr Hilgendorf said that the shipping companies had asked for next year’s inflation to be built into this year’s rates — as was commonly done in a large number of enterprises — but the board would not agree. “We agreed to look at cash items, such as wages

and bunkering, if inflation continued at a high rate, and make some compensations,” be said. “The 7 per cent rise already has an element of inflation as we started with a basic lift of 5.7 per cent.” Mr Hilgendorf said that shipping around the world was changing, just as the ownership and control of the lines was changing, and as examples he mentioned the Port Line being taken over by Cunard while the P. and O. Line talked about combining.

In addition, there appeared to be an increasing amount of refrigerated space available. During the last 12 months the board had been approached by 14 comnanies with refrigerated shipping: although, he said, it should be added that none of them

was in a position to play more than a small part in getting New Zealand meat to the United Kingdom market. However, the emergence of fast, container vessels did raise the possibility of “additional elements” in the European trade. Mr Hilgendorf described the prospects in some European markets as excellent, and he specifically mentioned Belgium, the Netherlands, Italy and Greece. After five weeks overseas, Mr Hilgendorf was not in a position to comment on the local situation, but said that if the export companies introduced schedules which the board considered were realistic then it was unlikely the board would introduce a schedule as it did last year.