SHIPOWNERS’ CAUTIOUS ATTITUDE

Gisborne Herald, Volume LXXV, Issue 22823, 18 December 1948, Page 4

SHIPOWNERS’ CAUTIOUS ATTITUDE

news item that the Aorangi lost heavily on her first Pacific voyage since reconversion lends force to recent doubts and hesitancy observed among shipowners in Britain. And, as far as the Pacific is concerned, caution is also evident in the United States, where the Matson Company has stopped reconversion work on both the Mariposa and Monterey.

The British shipping industry for years has had a reputation for farsightedness. AVhat shipowners say today, other industries often repeat as their own views after. Recently the shipping industry has been taking a line distinctly more sceptical than that of industries serving sellers’ markets abroad and sheltered trades at home. Is shipping, from which so great a contribution is expected to assist Britain in the balance of payments, to be the first industry to have to face the buyers’ market? The Economist in answering this question says that without doubt the industry feels that it may be entering a difficult period. The feeling may in part be a psychological reaction to the abnormal conditions of international trade in this post-war phase. Although at present fully employed, most shipowners find it difficult to place trust in prosperity which is founded on bulk buying. The Economist says that State trading and controls and the unchecked growth of bilateral trade practices have traditionally been regarded as incompatible with a thriving shipping industry. In the past three years Britain has almost made good her heavy shipping losses during the war, but the new tonnage is expensive and to clear charges, freights and fares will have to be maintained at a far higher level than before the war. On most routes at present this is not difficult because of abnormal trading conditions and the flush of immigrant traffic. The new Orcades is reported to have cost over £3,000,000, a colossal figure for a 28,000-ton ship, and the reconversion of the Aorangi almost £2,000,000. The reconversion of the Mariposa and Monterey, if proceeded with, would have cost far more than the contract price for the vessels when originally built.

Today British ships sail the seas free from the keen pre-war competition of Japan, Germany and Italy. There is admittedly stronger competition from the United States, but in the past it has been met because of American high operating costs, and this may well be the case today and in the future. The combined effect of the revival of Japanese, German, Italian and French shipping will be a greater problem.

In the trade with the Dominions shipping and airline companies face the same problem as before the war —the demands for passenger accommodation and freight space from Britain to the Dominions far exceed traffic in the opposite direction. These companies can see no solution, which, means that fares and freights must remain high. The British shipping industry may still feel pride in its enterprise and technical efficiency, but until there are greater signs of economic stability and expanding world trade its pride, it appears, will he tempered with caution.