WATERFRONT COSTS

Evening Post, Volume CXXXII, Issue 75, 25 September 1941, Page 4

WATERFRONT COSTS

HANDLING OF CARGO

CAUSES OF INCREASES

REPORT TO HARBOUR BOARD

Six causes contributing to the increased costs of handling cargo on the Wellington waterfront were stated in a report presented to the Wellington Harbour Board last evening by a special committee set up at the previous monthly meeting to investigate the position. The report, which was based on figures and submissions contained in a statement made by the board's chief executive officer (Mr. F. W. Reed), set out the causes as follows:— Increases in rates of pay, including special rates for Saturday morning work; bonus payments to casual wharf labourers; increase in minimum payments for engagement of casual wharf labourers; slower rate of handling cargo; change in class of cargo received from overseas; congestion of cargo in sheds.

"In examining the evidence placed before the committee, several factors contributing to the increased costs of handling cargo were shown to be involved," stated the committee's report.

"The results show that in the years 1935 to September, 1940 (the end of the board's financial year), when conditions! were considered to be fairly normal, the cost for English and foreign cargo has gradually increased year by year until there is a difference of Is lid per ton. Of this Is ljd, wages increases represent 7d per ton, so that an explanation of the difference of 6Jd must be looked for in other directions. The ships have, if anything, improved their working gear, whilst the board has certainly improved the wharf facilities. The evidence shows, however, that the rate of discharge fell from 16£ tons per hour to 12£ tons per hour during the period under review, and this must be partly the explanation. In the nine months of the 1941 financial year the cost has further advanced, until, in June, 1941, it was nearly 3s 6£d per ton, or almost double the cost in 1935. It is admitted that exceptional conditions have existed during this period, such as congestion in the sheds, shift work, and bonus payments. Despite the heavy increase in cost, the rate of discharge continued to fall, until, at the end of June, it was just under 12£ tons per hour. During this period further rises in wages accounted for 4d per ton. "It has also been shown that while the wages of the permanent staff have advanced by 28 per cent, since 1935, the increase in the case of casual wharf labourers employed in discharging English and foreign vessels amounts to 61 per cent., or from 2s 2d per hour to a little over 3s 5d per hour, including bonus payments averaging sid per hour. MARKED FAIXING-OFF. "It could quite reasonably be expected that steady increases in' rates of pay would be accompanied fay some compensatory return to the board by way of .faster work. On the contrary, however, it is clear from the discharging results that in the past seven years there has been a marked falling-off in the speed of haflQling inward cargo. "The system of continuous working, which has been introduced in order to give vessels the quicker turn-round so vitally necessary in this time of emergency, involves substantial payments for overtime labour as well as bonus payments for the work performed. "This necessary work in overtime hours, as the results show, is performed at a slower rate compared with ordinary working time. So far as the board is concerned, therefore, the increased quantity of cargo now being discharged in overtime hours at a slower rate, has reduced the average rate of cargo handled. "As regards bonus payments, members may not be conversant with the details as to How the system..works. For instance, say there are 1000 tons of cargo to be landed and the rate is fixed by the Waterfront Control Commission at 3s per ton, it would equal £150. If the amount of wages paid by the shipping company amounted to £130, there would be a balance of £20, which would be distributed amongst the men on the ship in the form of a bonus. The commission then orders the board to pay its section, of men an extra rate per hour equivalent to that paid by the ship and for which the board receives no benefit whatever. ABILITY TO MEET COSTS. "Increased rates of pay must be considered in relation to the board's finances and the ability to meet heavilyincreased expenditure without relief by way of increased wharfage rates and other dues. "The returns show that in 1935 the margin between the wharfage rate of 3s 9d per ton and the labour cost of Is lOd per ton for. English and foreign cargo was Is lid. The margin for the eight months of this year has diminished to Is per ton, out of which. the board has to meet overhead expenses, supervision, etc. "In providing an important cargohandling: service to the community, the board has a responsibility to ensure that this industry is conducted economically in order that the costs of consumer goods are not unnecessarily increased by the higher charges levied on commodities passing over the board's wharves. "In the public interest it is therefore necessary that those who are required to contribute the revenue to maintain waterfront services should be informed of the causes of rising costs of handling cargo." COMPARATIVE FIGURES. The statement by Mr. Reed included a return giving the cost of receiving and delivering English and foreign cargo from 1935 to 1940, and for the nine months ended June 30, 1941. This showed that from 22.18 d per ton in 1935 the cost of handling cargo had risen to 42.46 d per ton for the nine months ended June 30 last, an advance of 20.28 d per ton, or 91 per cent. There had been three increases in rates of pay to the permanent staff, costing 2.08 d per ton, and four increases to casual wharf labourers, costing 9.07 d per ton, and including 3.13 d per ton in bonus payments. The total amount was thus 11.15 d per ton. The extent to which the board's costs had been affected by the change in the nature of the cargo received, and also by congestion of cargo and nondelivery in overtime hours, could not be ascertained, Mr. Reed stated, but the effect of those circumstances, although accounting for a portion _of the increased costs, would not, in combination with' the other factors involved, be sufficient to explain the high increases recorded in the past nine months. The adoption of the report was moved by Mr. M. A. Eliott, who had moved at the previous meeting that information regarding the cost of handling cargo be made available for publication. He pointed out that during the last five years the cost per. ton of

handling cargo had nearly doubled and that during the same period the rate for handling cargo per hour had decreased by approximately 25 per cent. CONTRACT SYSTEM CRITICISED. " Seconding the motion, Mr. W. L. Fitzherbert said he thought it was firmly established that the contract system was of no benefit whatever to the board. They had made every effort, including a deputation to the Minister of Labour, to prevent the system from being brought into operation in Wellington. Mr. Fitzherbert added that he thought it was recognised throughout New Zealand that the contract system should never have been applied to h/.-bour boards. Mr. J. O. Johnson referred, to the influence on costs represented by the change in the nature of the cargo received and by congestion of cargo and non-delivery in overtime hours. It was unfortunate, to say the least, that estimates of the cost could not be given in respect of those factors, particularly in view of ttie fact that the effect of wage increases during the period under review was assessed. He thought that it was unfair to take 1935 as a starting-point for the calculations in view of the economic circumstancesi ruling at that time. Mr. W. Appleton said that Mr. Johnson had attempted to throw a smoke screen about the position and to sidetrack the issue. The fact remained that costs had increased at least 50 per cent, during the period. The decrease in cargo handled was not a matter of war conditions or import restrictions but had followed the restoration of the 10 per cent. cut. It was time that the public knew how the extra costs were brought about. Mr. H. Morrison said that the greatest effect of the increases fell on the primary producers, who could not pass them on. Ultimately the. increases would affect the whole of the community. AWARD CONDITIONS BLAMED. Mr. H. L. Nathan said that award conditions and their effect in slowing down work were largely responsible for the present position. ' Some appeal to the. people to "put their backs into it," * particularly in. view of the inspiring example being given by the workers of Britain, should be made by leaders of the community, said Mr. J. W. Andrews. Mr. C. M. Turrell said that the position was a great deal worse than was actually, shown. There was a great deal of broken*time and so on that was charged to the shipping companies and did not appear in the reports. Sir Charles Norwood and Mr. W..1. J. Blyth were among other speakers who expressed regret at the position revealed. The former said that it came as a shock to learn of the reduced effort that was apparent on the waterfront Mr. Johnson said that if anybody was to blame, if it was a question of malingering, that should be brought into the light of day, no matter who might be hurt. He did ask that full promince should be given to the factors he had mentioned. The Waterfront Control Commission had nothing whatever to do with the position between 1935 and 1940. DISTURBING FIGURES. The chairman (Mr. W. H. Price) said that the figures presented were unquestionably accurate. The report had been approved unanimously by the special committee, and it was fair and impartial. It was disturbing to know that a gradual decrease in the rats of discharge had taken place year after year. Figures since June, 1941, were not yet available, but so far the cost continued to rise and the rate of dis^ charge continued to fall. "Apart from other relative factors, it was recognised that the cost must increase by the payment of bonuses," said Mr. Price. "Up to June this year £2200 has been paid out in this form for the discharging of British and foreign cargoes only and for which the board, has received no benefit whatever. It is estimated that the payments under this heading for the full year on all ships loading and discharging will amount to £6000." He would, however, refrain from dealing further with the work under the co-operative system until the figures for a full twelve months were available. The motion was then put to the meeting and carried.