THE H.B. TRIBUNE. THURSDAY, MARCH 20, 1919. SHIPPING FREIGHTS.

Hawke's Bay Tribune, Volume IX, Issue 81, 20 March 1919, Page 4

THE H.B. TRIBUNE. THURSDAY, MARCH 20, 1919. SHIPPING FREIGHTS.

Some light is thrown on the shipping question, of so serious importance to the wholo community, by discussions which appear in the latest London files to hand this week. These are based on the announcement of the determination of the Imperial Government to release a large proportion of British shipping from tho “commandeer” control under which it had been placed during the war. It is explained that, when liners came under State requisition and freight rates were raised, for account of the Government, to a very high level, the graduated system, providing varying rates for different classes of freight, was temporarily abolished. In its place a flat rate, applicable to all classes of freight, was introduced “in the interests of simplicity and the saving of clerical labour, then very scarce.” In the Australasian trade the rate for both weight and measurement cargo was advanced to 200 shillings per ton, which was reduced after the conclusion of the armistice, and the fall in the cost of war insurance, by 25 per cent, to 150 shillings. The adoption of flat rates meant, for instance, that the cost of transporting a ton weight of galvanized iron and a ton measurement (a crate or crates measuring a total of 40 cubic feet) of straw hats would be the same. Judged by commercial considerations alone and from tho point of view of marketing, the principle usually accepted that a high valued article can afford to pay a higher freight than low valued merchandise. While the effect of a high freight on measurement cargo might be practically unnoticed in the retail trade, as in the case of a shipment of a ton measurement (40 cubic feet) of gloves, the effect on rough cargo might be prohibitive. This situation actually occurred during the war when merchants declared that certain low-valued articles would not bear the high flat rate quoted for all commodities alike, and consequently could not bo shipped. The stopping of certain shipments could not, however, be regarded by the Government authorities as being without its compensations, for during the war commercial shipping services could only be maintained as mere skeletons, if they were not suppressed altogether, and any relief which could be afforded by a reduced demand for carrying capacity was, as a rule, welcomed, A point on which exporting merchants generally want assurance is that of stability of freights, and that was being provided for in the action of the shipping companies. Unless exporters know that freights will be maintained on a certain level for a sufficient time to enable them to market their goods before these are depreciated by a further reduction in,freights they hesitate to ship, in the Indian trade, lor example, notice had been given that the new lutes to come into lorce at the beginning of February would be maintained at any rate until June 30, and the intention was to maintain the Australasian rates for a period of six months at least. Before now heavy losses on stoeii depreciated by cuts m rates ot freight have been suffered by merchants. "Happily, tor the sake oi merchants,"’ says the London "Times’ ” shipping correspondent—consumers at this end take a different view—“the present sharp reductions in freights are being made at a time when stocks have fallen everywhere to a very low level, ii they exist at all. It is now the opportunity of manufacturers and merchants to supply the urgent needs ot countries overseas, and the freight rate reductions at present being made are an indication of the determination of shipping managers to do their full part in the revival of the export trade.” Having in view this need tor stabilising freights for substantial periods in order to induce merchants to effect shipments, the shipping companies are said to realise that less disturbance to trade is caused by one big “cut” in rates than by a series of small reductions, it is instanced that the reduction in some of the rates of freight from the United States to India and the Far East had been too sharp and sudden for some interests. The effect was discussed at a Chamber of Commerce meeting, and it was decided to ask the Shipping Controller to sanction the making of the rates retrospective to cover all shipments afloat at the time of the announcement of the reductions. It was urged that the reductions in the rates of freight were so substantial that, unless these were made retrospective, serious losses must be incurred by the merchants, who agreed to pay them in order to maintain trade as far as possible, in marketing the merchandise already on the water, it may be mentioned for those concerned m such matters that the shipments lor which tins special concession was asked consisted mainly of iron and stool manufactures, and also that the correspondent particularly mentions, as an example, the holding over, for the promised Australasian reduction to take effect, of considerable shipments of galvanized iron, on which, as on other rough cargo, the rate had been very substantially reduced. Judging from what has been here said, we should be justified in expecting some fairly early and material decreases in the prices oi what is termed “rough cargo.” That is, of course, unless our own wholesale merchants are in combination to keep prices up until they quit the stocks upon which they have paid war-rate freights. On the other hand, it seems doubtful whether we uay expect any substantial early reduction in other prices, and pretty certain that, so far as freights affect them, there is no prospect of ary modification for at least another six months. But, of course, with regard to all classes of cargo, freight is only one factor, and in many cases a minor factor, in the fixing of prices. Where articles are concerned in whose manufacture a large number of hands are engaged, higher wages and dislocations from strikes will more than neutralise any saving in freight.