Rail ban threatens groceries, coal

Press, 3 July 1979, Page 1

Rail ban threatens groceries, coal

Canterbury households will feel the direct effects of the railwaymen’s ban on bulk freight in less than a week. Dozens of grocery lines may vanish from supermarket shelves before next Monday, and many coal merchants have less than a week’s stock left. Members of the National Union of Railwaymen have banned the handling of freight delivered by cartage firms. Their action began 19 days ago in protest against cuts in the Silver Star overnight express

service between Wellington and Auckland. The ban is now beginning to affect consumers and manufacturers throughout New Zealand, as stocks of goods normally carried by rail dwindle. Many grocery lines are now running perilously low, according to the general manager of Foodstuffs Christchurch, Ltd (Mr R. W. Thomas). Foodstuffs controls Four Square stores. Stocks of raw materials held by manufacturers were as short as manufac-

tured items, which added to the problem, he said. “If the ban continues for a week shortages will undoubtedly occur,” said Mr Thomas. “It is not just a question of one item, but of dozens.” Even when the ban was lifted the problem would remain for some time, until the backlog could be cleared. However, no-one w'ould immediately be restricted to a “bread and potatoes” diet. “Alternatives will be available, but the range of choice will be drastically restricted.”

Mr Thomas was not prepared to say what the endangered lines were, for fear of causing panic buying. Mr W. M. Warren, manager of the State Coal Depot, said that many merchants had less than a week’s supply left. However, he said he hoped supplies could be restored relatively quickly if the railwaymen lifted their ban. “Enough coal is already loaded to help them out,

but at present it’s tied up on sidings between Christchurch and Greymouth,” he said. Industry had a much longer period of grace than home users. Mr Warren said that a month’s supply was usually held in reserve in case of emergency. Among the biggest users were Christchurch Hospital, Sunnyside Hospital, and the University of Canterbury. If the ban continued and the hospitals appeared likely to run

out of coal, his company would seek permission to supply them by road. Air New Zealand appears to have benefited by the railwaymen's action. Cargo figures are unquestionably higher than normal, according to an airline spokesman. “For this time of year our acceptance levels have been very high,” he said.

Many Canterbury manufacturers have liquidity problems because of the railwaymen’s bulk-freight ban, according to Mr I. D. Howell, director of the Canterbury Manufacturers’ Association The association was making daily surveys of about two dozen members in a random cross-section, he said. “It has become obvious, particularly in the last few days, that many manufacturers have big liquidity problems.’*

Mr Howell said that manufacturers would normally have had their products delivered in June, and been paid in July. Now that the goods were stranded in warehouses and rail waggons they would not be delivered until mid-July at the earliest, which meant they could not be paid for until August. “This is a serious problem at a time when the Government has announced more moves to tighten credit,” he said. Most companies at present faced moderate liquidity problems, but by the end of the week they would be in serious difficulties.

Their position would depend on how far their banks were prepared to “carry” them. One consequence of the problems already faced was a tightening of the job market. Mr Howell said that many of the firms surveyed had not been able to employ new staff as planned. Almost 800 Railways employees have now been laid off in Canterbury, according to a department spokesman. This figure includes 580 members of the National Union of Railwaymen, 100 members of the Railway Officers’ Institute, and 117 members of the Locomotive Engineers’ Association.

About 15,500 tonnes of freight was sitting in waggons on Canterbury rail sidings, he said. About half of this was destined for Christchurch. Between 13,000 and 14,000 tonnes would be moved through Christchurch in a normal day. More freight has been stored in rail depots, where it was received during the period between when the ban was imposed and the Railways stopped accepting freight. Staff of trucking firms connected with bulk freight cartage from rail are also facing lay-offs, according to the secretary of the Road Transport Association (Mr E. Williams).