RISE IN FREIGHTS.

Hawera & Normanby Star, Volume LXXII, 7 October 1916, Page 2

RISE IN FREIGHTS.

A REVIEW OF THE POSITION

It cannot be said (remarks the Wei- I lington Post) that the raising of freights \ on homeward bound wool and general -i cargo as from Ist October came as a surprise. Not only have the freights been substantially increased, but certain conditions, have been laid? down with regard to payment of wharfage and storage charges that will no doubt be-the subject of much discussion, inasmuch as. combined with increased freight rates . they, will increase the costs of export and to a corresponding extent diminish the returns to the -pioducer. The position.of the British shipowner in raising freights to levels undreamed of before the war is now much clearer than it has ever been. The principal causes are shortage of tonnage and increased working expenses, '.tonnage is short be,c-az use of (1.) the withdrawal of the great German mercantile fleet from trade; (2) the requisitioning by. the Admiralty of an. enormous amount of tonnage exclusively for war purposes; (3) increased working charges, especially \ for bunker coal at remote

rade route stations

The law of supply and demand is no doubt allowed to have full play with regard to the shortage of ships. Increased working charges/too, are,, one may rest-assured, not minimised, but they cannot be so great as to warrant the* enormous advances which has taken place m our own New Zealand trade. A comparison of the pre-war and new rates is given hereunder. The shipping requisitioned by the Admiralty is paid for at schedule rates, which on present-, day phenomenal values of tonnage do ; not appear to be remunerative—quite the reverse; out in ordinary times the Admiralty rates would not have been considered unpayable. Then the British mercantile marine, notwithstanding the strenuous efforts made to replace losses, has suffered much at the hands oil the enemy raiders and mines. Of course, insurance of a hull to its utmost value.* even at present-day extraordinary market rates, does not cover the shipowner against his loss of the earning power of the ships. The Tongariro; recently lost on the East Coast, may have been covered by insurance from truck to kealson,; but. the loss of her earnings /as a cargo carrier, both out and Home, would be enormous, at presentrates. after allowing ai most liberal niargin for enhanced running charges. "The shipowners' reasons for raising .rates may be attributed to the following causes: —-

1. The ■necessity for building, up a practically impregnable financial position in order to better meet foreign competition after tne war. 2. The making oJp ample provision for "scrapping" old tonnage and the rehabilitation of: fleets with new and more economically worked ships. A- 3rTh'e "passing on", to the,public of war x taxation—-25 per cent, income tax and 60 per cent, excess profits—and the onus of the lower Admiralty schedule rates for requisitioned.tonnage. For these things the public has to pay. The companies are not doing so, as a perusal of the shipping companies' recently published dividend lists show. The big "Furness, Withy Co. recently paid 10 per cent, bonus and 10 per cent, dividend on its Ordinary share's, transferring £300,000 to reserve; writing off •£350,000 for -depreciation. This on a capital of £3,500*000, of which £2,000,----000 is in ordinary shares and the remainder £10 shares at 5 ncr cent. This company is mentioned only as a type. as they are in so many ways when compared with.-British, neur tral shipping companies are reaping a wonderful harvestf of freights. They never before':, had such, James, . When the war is over they will be found; .to be in a position of enormous financial strength if their management has .been prudent and conservative. British shipowners will have to reckon with ■them, and it j« this state of affairs, perhaps more than thing else, that British shipowners realise and are strenuously preparing themselves 'to cdpe with immediately the war is over, In the meantime, both exporters and importers must, it seems, resign -themselves to high freights, and take what comfort they can from the fact that freights from New Zealand are lower than those from Australia for similar produce. The following' table'comprises a few lines of principal exports with the pre-war rates. Ist October, 1913 % last rates. 2nd February, 1916, and" new rates. Ist October, 1915, compared: -Pre- Old New j war rate rate Greasy wool, lb Id * lfd 2fdSlipe.wool, H> ..11-l&T lid 2fd Scoured wool, lb ... |d l|d 2|d Woolled skins, lb ... fd lfd 2" fa Hemp, ton \ 85s 140s 2GOs Tow, t0n........ 100s 160s 260s fallow, ton .......... 40s 85s 120s Pelts, ton ....: v .. v ... 45s 90s 130s Sausage casing&f ton 55s 100s 140s Cocksfoot, t^n ...... COs 110s- 130s Hides, ton Titf. 40s 85s 130s Hair, lb, dumped... 11-16 d lfd 2|d Bones & horns, toa. 35s 80s 120s Preserved meat, ton -40s 80s 105s Extract meat, ton... 45s 115s 200 s Peas grain, etc., ton ' — 80s 120s *Fine cargo, t0n..... 55s 100s , 130s *Rough cargo, ton... 42s 6d v 85s 105s *Measurement.

| The meat and dairy produce are'car-. [ ried under -different conditions—the Board of Trade havine requisitioned the insulated space, controls it and fixes th 6 rates. Butter is carried at 3.i 9d :\a box, as compared with 2s 6d before the war; cheese at fd, as against |d per pound.