Port men worry as containers fail to live up to promise

Press, Volume CXVI, Issue 34130, 17 April 1976, Page 21

Port men worry as containers fail to live up to promise

(By

MURRAY SIMPSON)

The breathless expectation with which containers were first beheld 10 years ago has given way to a good deal of soul searching overseas, and a certain amount of nervous apprehension among New Zealand port authorities.

Within the next five years New Zealand ports will have to justify the enormous capital outlay in the conversion of port facilities. So far the expected cost savings to the producer and the consumer have failed to materialise and few are brave enough to predict a dramatic change. There is a growing body of opinion that containers really justify themselves only in the sophisticated high-value trades between Europe, North America, and Japan where turnover is high — trades which are already fully containerised. When it comes to transporting raw materials and semi-finished products — the staple trading items with which the rest of the world deals — the economics of containerisation become fairly marginal. Fuel rises hurt As a result the world move to containerisation seems to have reached its limit for the time being. The growth of containerisation has slowed considerably in the last 18 months compared with other transport developments.

Inflation has played its part. Since 1965 the cost of a container vessel has risen

nearly seven times while that of conventional ships has risen only about four times.

Soaring fuel costs have also hit container-ship-owners where it hurts. One of their strong selling points has been the high-speed movement of ships between ports — designed to cut costs at sea.

However, some companies have been forced to order reduced speeds at sea in the interest of fuel economy. Many of the world’s fleets are therefore beginning to turn back to smaller conventional ships built with flexibility in mind. 4< In fact, Lloyd's magazine, TOO A 1,” predicts a boom in certain classes of conventional ships within the next few years. Varied cargoes The magazine cites the English-designed SDI 4, a 14,000 deadweight ton vessel of which 181 have been built or ordered since 1967. Extremely versatile, the basic design needs only minor modifications to make it suitable for a wide variety of cargo.

Also becoming extremely popuiar are the Japanese Fortune and Freedom class bulk carriers — a number of which have been seen in Lyttelton.

Germany is producing the Liberty, Type 36, and Pioneer designs, and Spain the Santa Fe.

These, and others, can carry cars, containers, dry bulk, and general cargoes which means their owners are not restricted should a pa-ticular trade face a slump. However, present world

trend's can be of little consolation to the Lyttelton Harbour Board, which, a year ago, got Ministerial approval to become a container port. Unfortunately, Lyttelton, like other New Zealand ports, has no option but to “go al) out” for containerisation.

New Zealand ports have been caught on the horns of a rather nasty dilemma — either to invest enormous sums on containerisation on which reasonable returns are far from assured, or to lose their traditional overseas markets to a neighbouring port with consequential socio-economic disruption of the region. Hence the ferocity with which ports competed for container port status. Some would have it that New Zealand has been the victim of a confidence trick on a mammoth scale. Burden shifted Although the costs of moving a container from dockside to dockside have risen much more slowly than the equivalent amount of cargo in a conventional vessel, the producer and consumer have yet to notice any real difference.

The reason is that con-tainer-ship operators have effectively unloaded the most cost-sensitive part of their business on to the shore.

A < container represents a ship’s hold in miniature. This means the timeconsuming, labour-intensive business of stowing cargo is now done on shore, while, in the meantime, the ship itself is steaming at high speed for other ports. This “shifting of the bur-

den” has resulted in a growing feeling of disenchantment among New Zealand primary producers with the effects of containerisation on costs “beyond ithe farm gate” — a feeling i spelt out clearly at a seminar on the subject at Lincoln College last month. I Nor can the case for containers be strengthened by [the performance of “semicontainer” vessels at Lyttel[ton. These are often simply modified conventional vessels. usually equipped with lheavy-lift derricks, which lean handle containers without any special shore-side facilities.

Last week the Poyang loaded 78 containers and discharged 12 at Lyttelton, together with a quantity of general cargo.

In November of last year the Poyang and China Bear hand’ed a total of 129 containers and five “Lash” I barges between them. However, despite the disquietening features of containerisation, which have become apparent with the benefit of hindsight, Lyttelton is committed to a containerisation programme due to be completed next year. The viability of the project will hinge on a container or “box” rate low enough to be acceptable to the shipping companies yet high enough to cover labour, administration, and capital repayement costs. Manning talks According to the Lyttelton Harbour Board’s trade promotion manager (Mr N. D. Cullen) this is in a delicate stage of negotiation and in-

Ivolves a number of complicating unknown factors. I The box rate will depend on the number of boxes put [through the terminal — the 'more boxes the lower the irate.

i However, there is no real |way of knowing how much [container traffic will be generated by the terminal unit it is working. I The second critical area is (the manning scale, which has still to be settled with the appropriate unions.

i The cost of each man on the terminal is estimated to be $15,000. a year, including administration costs. If 100 men worked the terminal, $1.5 would have io

be recovered from box rates. The manning scale is therefore critical to the viability of the project. The Lyttelton Harbour Board will therefore try to avoid being over-manned to I begin with.

New Zealand’s busiest terminal, at Auckland, has a manning scale of 231. A moderate reduction in throughput last year immediately turned a profit into a loss in excess of slm.

Sterile entertainnient

Sixty Indian men were sterilised this week in exchange for free tickets to an evening’s entertainment featuring nearly 100 top actors and actresses, United Press International reported. The show would run for another two evenings so more men may undergo vasectomy operations to earn the free tickets. Past family planning drives in India have rewarded men who consent to be sterilised with cash bonuses, extra food or transistor radios. — New Delhi.