Container-ship results cause disenchantment

Press, Volume CXVI, Issue 34103, 16 March 1976, Page 14

Container-ship results cause disenchantment

Dissatisfaction with the results from container shipping was expressed at a seminar at Lincoln College on costs beyond the farm gate.

But it was suggested that ports were not yet geared to handle containers properly and that this was a factor in the performance so far.

Containers had not brought the advantages all had hoped for in reduction in freight costs, said Mr N. F. Reynolds, chairman of the Rangitaiki Plains Dairy Company, Ltd. Generally, freight rates on container services had increased at the same rate as those for conventional ships. This was because the loading and discharging rates for container ships had been no better than for conventional ships. Last year the turnround of container ships had been very slow, mainly because insufficient terminal planning and labour problems. Handling rates at terminals had dropped as low as four containers an hour, compared with the figure accepted as a reasonable turn-round under New Zea-

land conditions — 20 an hour.

But Mr C. H. Speight, general manager of the Shipping Corporation said that the low handling rate had been recorded on three or four days when watersiders were on a “go slow”. About 18 containers an hour was a more normal rate for Wellington, he said. Of the only fully containerised trade — to the east coast of North America — he said that at the last frieght negotiations it had been agreed there should be no increase, whereas in other trades there had been 8 to 15 per cent increases. To justify the heavy investment in container shipping, loading rates would have to be dramatically improved compared with conventional shipping; this had not been achieved, said Mr Reynolds. There needed to be a reappraisal of the present development of port facilities in New Zealand to achieve a more balanced growth in both container and conventional shipping facilities, with emphasis on development of unit loading for container and conventional

shipping. In the dairy industry, unit loads, palletised at the factory, greatly reduced labour costs.

Containers might not be the ideal method of carrying wool, said a member of the Wool Board, Mr J. D. Mcllraith. In the past it had been concluded that unit packages were better, and had a much lower capital investment — “however, the decision has been made for us.”

It was too early yet to say whether this was good or bad for wool. Where containers were being handled at Auckland and Wellington costs were rising quite rapidly — a 20 per cent increase at Auckland in October would be followed by a further increase in the near future. RELATIONSHIP '

Mr Mcllraith said the loading rate at both Auckland and Wellington had improved quite considerably in recent months, but there was a direct relationship between the equipment available and the rate of handling. The loading rate at Auckland and Wellington averaged 16 to 18 boxes an hour, while at Tilbury, Liverpool, and Zeebrugge it was 30 an hour. This was because at the European ports two or three cranes could be put on to one ship, whereas in New Zealand ports there was only one. In Wellington, a second crane had been commissioned in November, but it had not yet lifted a box. This was because of a manning dispute. He believed that the people manning it wanted eight to 12 persons

to drive it, but there was only one seat in it.

“Such action cannot be tolerated, and plays no small part in making loading costs per box 300 per cent higher than in the United Kingdom and European ports mentioned.”

Although results with containers had been disappointing, Mr Speight said, they were the shipowners’ answer to cost increases. The full benefits would not be seen until 1979. To illustiate the cost savings to be gained from a container vessel, Mr Speight compared the N.Z. Waitangi a large, modern, refrigerated vessel, with the corporation’s. container vessel on order in Germany. The container vessel would be the equivalent of 5.4 Waitangis, he said, the capital investment at 1976 costs would be s79m, compared with sl3om; the number of crew members would be 94, compared with 508; the annual cre*v costs sl.lm, compared with $5.9m; annual fuel costs s2.Bm, compared with $3.5m; cargo costs $19.09 a freight ton, compared with $31.45; and both systems would produce s3om in revenue.

“As can be seen from these figures a conventional service would require a 60 per cent greater injection of capital than a container service, and the effect on freight rates will be appreciated,” said Mr Speight. “A container vessel is also less vulnerable to cost increases, and therefore offers the New Zealand farmer greater stability of freight rates.”