Licensing Authority Sits on Tanker Question

Northland Age, Volume XVIII, Issue 37, 11 February 1949, Page 1

Licensing Authority Sits on Tanker Question

Mr. E. J. l’helan opened a sitting of the Transport Licensing j Authority in Kaikohe on Wednesday, when he commenced to take | evidence in support of applications Hy :he Atlantic, Shell and the Vacuum Oil Companies for licenses to operate road petrol tankers in the four northern counties, • j When the court opened, them ere present some 10 people, all representative of local bodies, business houses, dairy companies, and oil companies, all the former being of the four counties in the application, namely Mangonui. Hckiauga, Whangaroa and Bay of Islands. I The applications are being opposed to Gisborne, Wanganui, Tirnaru, Bluff by dairy companies, shipping interests j and Pieton. In addition to the a’ooveand some local bodies. I mentioned main ports there are about Members of the legal fraternity! JO subsidiary bulk installations present are Mr. D. Ross of Whanga- throughout New Zealand, and it is rei, appearing for the oil companies, from these bulk installations that petMr. F. Haig of Auckland for the Pet- rol is distributed to the petrol re-

sellers stationed in their particular locality. The petrol is distributed by road tank waggon except in isolated cases where the old method by means of 44-gal. drums is the mode used. Distribution from the oil field by the bulk oil-tanker vessel to bulk installations at sea-ports and thence to subsidiary bulk inland installations, and thence by road tank waggon to the re-seller’s underground tank is the most modern and up-to-date method in use. The progress of developing this service in New Zealand was interupted by the war. Bay of Islands (together with Hokianga, Whangaroa and i Mangonu Counties) is serviced by road tankers fron? Okaihau by Atlantic Shell ar.d Vacuum and by road tankers from Whangarei by A.M.P. and Caltex. Hokianga, Whangaroa and Mangonui Counties are serviced as under : 1. —Atlantic Shell and Vacuum by road tankers from Okaihau except a supply of Shell and Vacuum which Dairy Co. at Motukaraka, Hokianga, goes by ship to Hokianga Co-op. in drums ex Onehunga per A. G. Frankham’s vessel. Note —Shell and Vacuum are obliged to ship in this way as this is specified by the Dairy Co., otherwise the mode would be by road tanker from Okaihau.

rol Resellers, Mr. Gould also of Auckland for Frankhams Ltd., a shipping firm, and for the Northern Steamship Co., and Mr. G. Nicholls of Kaitaia for the Kaitaia Co-op. Dairy Co. Ltd. and the Mangonui County Council. Also present to support those vvhp are opposing the application are Mr. Anderson, Secretary of the Seamen’s Union, and to support the application Mr. H. F. Guy, Mayor of Kaikohe who represents the Kaikohe Chamber of Commerce. Mr. Ross for the oil companies opened the proceedings and said : “Public interest is the main issue of this inquiry. The oil companies submit that the reduction of lid to 2d per gallon in the cost of petrol in the Whangaroa, Bay of Islands and Mangonui counties is of direct benefit to 19,020 residents.” Petrol tankers had been found to be the most satisfactory and economical means of distributing petrol from subsidiary bulk supplies. In the division of individual costs to the consumer it was found that transport from the main ports to the retailer amounted to 6id per gallon in the North, and any means by which this could be reduced would be of direct benefit to the consumers. Before the war the oil companies

had commenced extending their bulk service in Northland and. when hostilities ceased, they inaugurated the tanker service in the North by methods in accordance with the Transport Act of 1931 and the Amendment of 1941. Temporary licenses were issued and the service was carried as far as Waipapakauri, the northernmost limit of the economical one-day trip from the depot at Okaihau. Service Illegal Without any warning, Mr. Ross continued, a warrant was issued by the Minister of Transport making the service illegal in the districts affected by the dispute. This was in spite of the fact that the full intentions cf the oil companies were known to *he department. Mr. Ross said he would be interested to know who instituted the action making the service given by the companies illegal, and how many of the 19,020 people in the three counties these interests represented. Controversies had held back the development of Northland in the past and only in the last 10 to 20 years had the district been permitted the facilities required to allow natural

2. —A.M.P. by (a) a road tanker from Whangarei which service has served Manfgamuka and Broadwood in Hokianga County ; (b) in drums by ship ex Auckland per A. G. Frankham’s vessel to Awanui. Their agent, the Northern Co-op. Carrying Association Ltd., distributes this petrol in drums by road vehicles to Mangonui County re-sellers, to Totara North in the Whangaroa County and to Broadwood and Kohukohu re-sellers in Hokianga County. 3. —Caltex has only a small gallonage in these three Counties, their only re-sellers being Kaitaia Dairy Co. and G. Divich, storekeeper at Awanui (about 1400 gallons per month in all) and a re-seller at Rawene in Hokianga County. The Caltex supply is distributed in drums, the Awanui sunply beink by ship ex Auckland and the Rawene supply being by ship ex Onehunga. Historical Bulk delivery services in the North: Prior to June 1947 the bulk delivery area from Auckland extended n >rthwards as far as Silverdale only. The other bulk deliveries were from Whangarei depots which were opened in the years 1928/30, and extended us

development to take place. The move to provide cheaper' petrol was a step in the progress of Northland, Mr. Ross claimed. “The Northland is the Cinderella of New Zealand,” said Mr. Ross, “Motor spirit is the spirit of Progress, Industry and Commerce in the North.” First Witness Mr. A. F. Sadgrove, operations manager for the Atantic Union Oil Co. of N.Z., was the first witness called, and he as evidence in chief tabled the following report : Petrol is brought to New Zealand in oil tankers from Persian Gulf, Sumatra, British Borneo, Peru and Los Angeles (U.S.A.). These tankers discharge their cargoes into bulk tank installations at the Ports of Auckland, Wellington, New Plymouth, Napier, Nelson, Lyttleton and Port Chalmers. From the installations at these por.s petrol is conveyed by means of rail tank wagons to subsidiary bulk installations in inland towns. Some petrol is also conveyed to outports by the coastal tanker “Paua,” which plies

far as Towai in the North, Awarua and Tangowahine in the West and Waipu in the South. In June 1947 the Auckland bulk delivery area was extended to Orewa Mainui, Puhoi, Warkworth, Wellsford and Te Hana and at the same time the Whangarei bulk deivery area was extended to Dargaville, Ruawai, Tokatoka, Mititai, Paparoa, Matakohe, Maungatnroto and Kaiwaka and in Noveber 1948 to Tangaihi and Donnelly’s Crossing. Bulk Deliveries In September 1947 bulk deliveries were commenced from Whangarei to Bay of Islands County (Kawakawa, Moerewa, Ohaeawai and Okaihau) and in November 1947 is was further extended to Opua, Paihia, Kerikeri, Waipapa and Waimate North and in April 1948 to Russell. In order to promote a bulk installation at a more northerly point in July 1947 Atlantic ocmmenced negotiations with N.Z. Government for the purchase of bulk storage tanks and some ! 4000 feet of 4” pipe line at Okaihau.

Deep Interest in Applications Shown

in the product speak with authority i when they say that safety is a consideration which in itself is a factor of prime importances. When it comes to storage also, by the tanker method, petrol is stored in underground tankers which is the safest means devised. • Drums require to be stored in special compounds to aid in eliminating attendant m : <& Efficiency Tank waggon service is the last word in modern petrol service. It is rapid, sure, without leakage or loss, easily handled, and requires less labour and time for everyone concerned in petrol distribution. Saving Cost Tankers also reduced the number of truck miles required for distribution. p Cost of the drums which amounted to £6/5/- each, represented a drain on the dollar. resources of the country amounting to £37,500 and an annual upkeep of £22ijo, Mr. Sadgrove concluded. ' v Replying to a question from Mr. G. A. Nicholls, representing, the Kaitaia Dairy Company and the" Mangonui County Council, Mr. Sadgrove said that the cost to the county for patrol delivered would be lower, although he could not give an exact figure per gallon.. “Isn’t fact that between 7000 and 10,000 gallons of petrol will be

This station was formerly known as AR6 and was a reserve stock depot carrying supplies of aviation spirit for the Royal New Zealand Air Force. Atlantic were able to purchase the pipe lines and fittings but owing to shortage of steel plate purchase of the tankers was declined. Arrangements were made however to rent a 40,000 gallon tank from New Zealand Government and a lease of the unit was completed for the period of two years with right of renewal. From the installation thus arranged, tank truck service to re-sellers in Bay of Islands, Hokianga, Mangonui and Whangaroa was initiated on 27/9/48. Atlantic, Vacuum and Shell use the Okaihau Depot for their respective distributions in these Counties. The petrol is brought to Okaihau by rail tank waggon from Auckland.

Still Drums The only points in the whole of the North not now covered by truck service from either Auckland, Whangarei or Okaihau are those situated North of Waipapakauri in the Mangonui County. It is not possible to serve these latter points as the round trip from Okaihau would then take more than on e day. Legalities Met All legal requirements in regard to distribution from Okaihau were complied with and matters proceeded satisfactorily until 2nd December 1948 when without any prior warding advice or negotiation the oil companies were advised by the Commissioner of Transport of the issue by the Minister of Transport of a warrant declaring the carriage of petrol by road tank waggon (whether for hire or reward or not) for delivery to any place 'within the Counties of Hokianga, Mangonui and Whangaroa to be a godsservice within the Transport Licensing Act 1931 as from 15th December Copies of this letter and >f the Minister of Transport’s warrant are annexed. The present applications for licenses have accordingly been brought and temporary licenses have been obtained to continue the existing services meantime.

required annually l -.to carry the petrol to the north ? be well offset against the cost of'tjie drums.” stated Mr. Nicholls. """V, Mr. A. M. Gould foi: the Frankham Shipping Co. asked Mr. Sadgrove if his company had run tankers after being refused a license, and was the present application due to competition between certain oil companies. “Definitely not,” replied Mr. Sadgrove. Mr. Sadgrove went on to state that the north required 2000 drums* per month, and owing to the delay of the return of these containers a reserve of 4000 durms was necessary. Mr. Gould questioned the ethics of the three companies using the one installation for their brand of ben-

zine. The Authority, Mr. E. J. Pheian, interposed and stated that it had been established that such co-operation was economical. “Don’t the farmers require their petrol in drums ? ” asked Mr. Gould of the witness. “I’m not in a position to know that,” replied Mr. Sadgrove. “Have the oil companies ever complained of the methods used by the shipping companies,” asked Mr.

Tanker and Drum Delivery Compared Delivery by rail and road tank wagwon is the modern and most up-to-date method of distribution of petrol. This is the safest, most economical and most efficient form of service and because of this it has displaced wherever possible and continues to displace the outmoded method of service by drums. It is informative to compare road tanker service with service by drums and to consider the subject in relation to Section 36 of the Transport Law Amendment Act 1948 which requires consideration, namely : The provision of modem transport facilities best suited to the nature of the service : and the promotion of safe, adequate economical and efficient transport service. With respect to transport the tanker is the modern transport facility and this has displaced the drum in every country and wherever possible. Safety It is common knowledge that petrol requires care in handling and by its nature it is necessarily classed as dangerous goods, coming within the provisions of the Explosive and Dangerous Goods Act, 1908. It is essential

Gould. “Very definitely, no,” “Will your new system affect the income of the Railways Department?” asked Mr. Guy, representing the Kaikohe Chamber of Commerce. “All the freighting to Okaihau will still be done by the N.Z. Railways,” came the reply. Differential Charges Mr. P. E. Allen, a senior accountant of the Shell Oil Co. of N.Z., was the next witness, and in all spent some four hours under examination and cross examination. He gave comparative evidence of costs of distributing petrol to all retail points in the area referred to in the applications, that is, in drums as against the newly instituted service by road tankers. Mr. Allen went on to state that the cost per gallon by tanker was in every case, less than the cost by drum. Both methods computed over a nine months’ period showed that the saving

ir the public interest that the safest mode of carriage as well as of storage be adopted. Transport by rail and tanker waggon as against transport by drums is incomparably the safest method. There is no possibility of leakage : by reason of the equipment used and the fewer handlings exposure is reduced to an absolute minimum. The handling of the product from the bulk tank to the resellers’ tank is entirely in the hands of people experienced in that service and educated to that means of transport. Drums however in the course of transit are exposed to the risk of interference by unauthorised people, whether for pillage or otherwise. Drums in any event are exposed to vapour leaks and to leakage from bungs which have been interfered with. This escape of petrol or petrol vapour provides an ever-present risk both by sea or by motor transport. Moreover road tankers are provided with lightning earthing devices for j which there is no provision when pet- j rol is carried in drums by sea or on j ordinary motor vehicles. All dealers