SHIPPING MATTERS

Evening Post, Volume CI, Issue 49, 26 February 1921, Page 7

SHIPPING MATTERS

OIL FUEL FAMINE

SLUMP IN SHIPBUILDING

[WHOLESALE CANCELLATION OF

CONTRACTS.

J» (raOH- OOR OWN CORRESPOMDSNT.) LONDON, 12th January.

The slump in freights, coupled with the I high cost of building ships, has caused wholesale cancellation of new merchant and passenger vessels on the Ty.ne and the Clyde. Ship-owners are cutting their losses by paying fines on partly-con-structed vessels rather than see them finished. One firm alone on the northeast coast has had fourteen contracts torn up recently. A Clyde concern which was building four liners received a request some days ago not to proceed with any of them. This firm has reduced its employees from 13,000 to 7500. Among the cancellations are a number of orders for Norwegian and other foreign steamers that were to be built early this year in English yards. The shipbuilding industry has passed through periods of depression before, but men with long experience recall nothing like the present state of affairs., COST OF BUILDING. According to the director of a Clyde firm, the treason for the cancellations is that now ships have reached such a price that ship-owners see no prospect of making them pay their way. An estimate for a big ship' that this firm gave in May., 1919. was for £450,000, and" the contract was placed. Owing to delays this vessel was not laid down till January last year, when the owners again asked for an estimate. By that time the figure had risen to £830,000. The actual labour per horse-power has risen from £1.465 to £4.71. PESSIMISTIC OWNERS. Some particulars of the slump are given in the current number of Fairplay. "A year ago," it is stated 1, ",a 7500----ton vessel was worth £31 per ton if sold to British owners, and £45 per ton could have been obtained from foreigners, but the Shipping Controller would not give his consent to the sale. While during 1919 the appreciation in shipping values for the first six months was about 24 per cent., and in the twelve- months about 42 per cent., we have, w record this year a depreciation in values as compared with Ist January, 1920, of 23 per cent, in the first. six months and over 50 per cent, by the end of the year. If the value of a steamer were based on her earning capacity at the present time values should be negligible, because owners are laying boats up owing to the impossibility of securing any freight which will cover expenses'; b # nt if based on cost, of building they would be at least 100 per cent, higher. With regard to the future, experienced owners generally are pessimistic. Many consider that even £14 perl ton is far too high a price to pay wheii rdgard is had to the outlook in the freight market. A purchaser of a 7500-tonner would find it impossible to fix her to-day on any round voyage to pay expenses, so that the more economical course might be to lay up until markets improve." BRITISH MERCANTILE SERVICE.In spite, of adversities which have buffeted the shipping industry during the nast year, the journal Shipbuilding and Shipping Record is of the opinion that the average shipping company has come well out of tha ordeal financially. British shipowners are, in many respects, in a much stronger position than owners in certain foreign countries, and as the position which British mercantile shipping held at the outbreak of war was achieved in the face of more adverse conditions than are ruling to-day, it is anticipated that the British mercantile marine will come out of the ordeal stronger and better equipped than ever. As far as can be ascertained it is the smaller and more recently-established concerns that will principally suffer from the present slump, because they have not been able to accumulate sufficient reserves. OUNARD COMPANY'S PROi GRAMME. '(. The shipping- correspondent of the Financial Times also takes a more hopeful view of the situation. "While some people are inclined to take rather a pessimistic view of-the outlook for British shipping because, cargoes are scarce," he writes, "and there has of late been a very prononuoed slump in the outward and homeward freight markets, those closely connected with the industry are fully aware of the fact that the position is being carefully consolidated, and that in another year or two the mercantile marine of the Empire will be practically unshakable. Generally speaking, the losses of the war have been made good, and if the,"world's merchant shipping is taken in round figures to stand at 60,-----000,000 tons, fully 22,000,000 tons fly the' British flag. This is about 36 per cent., and the British merchant fleet is still growing. . "The enterprise of the Cunard Company, who have decided to carry out vtheir new shipbuilding programme in full, notwithstanding the ■ depression which prevails in freight circles for the time being, is to be commended. Tbs company is making an issue of £4,000,OCO in 7 per cent, debenture stock at 90. Although the prospectus. is not yet in tha hands of the public, applications for. £1.000,000 have been received, .and this shows what the investing community thinks of the prospects,of British shipping." The motto which the Cunard Company is adopting for the new ships is "smaller and swifter." Six of the new liners will be 15,000 tons. Such mammoth vessels as the Mauretania will not be repeated. . r - OIL FUEL SHORTAGE. On the Pacific coast the fuel oil situation is causing extreme concern, and is seriously affecting shipping, particularly on tbo Western Canadian portion of the Pacific littoral. The Vancouver correspondent of the> Financial Times sayß tliat the latest development is the impossibility of obtaining fuel oil fox the handsome steamer, the Canadian Highlander, just finished at the Wallace shipyards for the Canadian Government merchant marine. The- ship was launched as an oil-burner, and ran her trials as such, but now she will have to be converted to coal,' temporarily at least. The Canadian-Pacific Railway. Company is changing its coast steamers "to coal, and other companies are contemplating some move along these lines. The Grand Trunk Pacific steamers are safe until June as oil-burners, bat by i that time some of the oil companies expect to be in a position to supply ad oil requirements of British Columbia through new contracts with the Mexican or Peruvian field. The fiupply from United' States wells will probably continne to come in lesser volume. REPORT OP OIL FUEL COMMITTEE. According to the recent report of the special Fuel Oil Committee of the San Francisco Chamber of Commerce, the condition of the Pacific coast is far from ,an enviable one. Curtailments forced for the present may continue and even be more rigid unless there is a substantial increase in production. The cpafiump?

tion of fuel has increased in a far greater ratio than the production in the California fields, and in addition to this the action of the oil companies about a year ago in eliminating distillate caused another great loss of fuel oil.

Some relief is expected by British and Canadian lines from Peru and Mexico. The American shipping interests are viewing i-he future with doubt, in spite of a general increased national production. The dream of cheap oil is over, and it is felt that a large part of the present national oil-burning fleet will have to be converted to coal. In spite of having oil, the United Stat-es marine is suffering from famine. It requires tank depots around the world, but it does not yet possess them. Americans are constarttly bemoaning the fact that Great Britain has gained control of the future world supply, and they are noting with interest 'developments in the Far Northern Canadian territory aronnd the Mackenzie River. PASSENGER PARES. The question is being raised whether, the more luxurious modes of travel have reached such a prohibitive standard as to render necessary a reversion to a more simple accommodation on board passenger ships. "I have seen no indications that the public are unable or unwilling to pay," said the manager of Messrs. Thomas Cook and Son in this connection. "Indeed, many of the services supplied by the large first-class boats, looked upon at the outset as luxuries, are now considered by passengers to be> necessities. The modern serv vices, such as swimming .bath, gymnasium, tea, garden, and so forth, are found to meet a demand, and that de-. icandl shows no signs of weakening., If and when money becomes tighter than it has been, 1" think there''will be more of the less luxurious vessels put on. But at present there are plenty willing to pay, and so long as this continues, the j.igher class services will be kept going." As an instance of the increase in the «wt of travel, the first-class single fares from London to New Zealand in 1914 ranged, from £65 to £75. Now they range from £164 to £174. Seconders single fares were from £38 to £46, and thesa now stand-at from £114 to £124. , The German cargo steamer Antwerpen, which was recently purchased by the Union Steamship Company, has been renamed the Kairanga. The vessel is now on its way to Australia, by way of the Cape of Good Hope,- with a full cargo for Melbourne, Sydney, and Brisbane. After discharging, the Kairanga will probably go on to New Zealand and be placed on the intercolonial trade. The company do not intend buying any further ex-Germaft vessels, as they are now fully supplied, at least for the time being. Strike troubles in tha shipbuilding yards of England are lipt only responsible for preventing the assisted and nominated immigrants to New Zealand taking their passages by the vessels they had been appointed to, b>st are causing a a heavy loss to the companies. The Shaw, Savill. and Albion Lino have been able to fit up some of their cargo steamers for as many as 1000 third-class passengers, but now that the.shipwrights refuse to work, it is impossible to arrange for the .special berthage accommodation, and the vessels are forced to return to the Dominion without passengers, an arrangement which, has been very acceptable to the corojtany now that outward freights are so difficult to complete