Freight rebates vital

Press, 20 August 1982, Page 3

Freight rebates vital

Freight rebates for South Island manufacturers and the lower south to north rates offered by the Shipping Corporation are essential to help alleviate South Island companies' freight problems says the Manufacturers' Association.

The Canterbury Manufacturers’ Association and its Otago-Southland counterpart yesterday released the results of its 1982 survey of manufacturers' freight problems. a follow-up to a similar survey in 1979.

The report says that freight costs are the main problem affecting South Island industry.

“Our studies clearly show that the abolition of these (freight aid) schemes would have a detrimental effect bn many South Island industries." the report says. “The efficient and economical transport of goods is vital for the prosperity of South. Island manufacturing and allied distribution industries.

“This can be achieved only

bv increasing competition which will add incentive to the transport industry to become more efficient and give users the right to choose and direct freight to the most appropriate mode of transport.” The report calls for the progressive reduction and eventual abolition of regulations that protect the Railways Corporation so that it can concentrate on longer haulage. It also calls for the abolition of the existing “quantitative criteria" for issuing road transport’ goods service licences to be replaced by “qualitative criteria." This would encourage competition, it says. The 1979 survey confirmed the Manufacturers’ Association contention that the cost of transport and delays were the main reason South Island industrial expansion was not as high as in the North Island.

The survey was made among South Island firms who sell their products in the

North Island. Just over 100 replied. The report says the replies showed that: The cost of freight as a proportion of sales continues to rise for most South Island manufacturers. Most goods to the North Island (75 per cent) travel by rail via freight consolidators. With few exceptions manufacturers bargain with consolidators to achieve the best possible deal. Some manufacturers can freight to Australia for lessthan it costs to reach Auckland. Several manufacturers say high freight costs have lost them sales in the North Island. South Island manufacturers are still required to hold three to 12 weeks more stock than Auckland manufacturers have to.

Delays are now less than they were three years ago. the report says, but this probably reflects the recession in the transport industrv.