FREIGHT RATES

New Zealand Herald, Volume LXXV, Issue 22983, 10 March 1938, Page 17

FREIGHT RATES

COASTAL AND TASMAN NO LOCAL ADVANTAGE COMMENTS BY MERCHANTS From the aspect of present freight rates, an iron and steel works in New Zealand shipping its products to various Dominion ports would enjoy no advantage over Australian competition, it was pointed out yesterday in comment by merchants on the proposal by the Government to establish the industry in the Dominion. There is a standard coastal rate for-iron and steel bundles of 27s 6d a ton. the same rate applying for Tasman shipment. Actually the Broken Hill Proprietary, Limited, quotes its iron at c.i.f. and e. prices, having a private freight agreement with the shipping companies and it is believed that the freight rate it pays is below the New Zealand coastal rate. The rate from England is 50s a ton, subject to 10 per cent primage with a rebate of 5 per cent. In spite of its advantage over England in freights, it was stated, Australia had not exploited the position in the New Zealand market, maintaining prices in both New Zealand and Australia at a level that is tlie lowest in the world. The Brassert Report Both merchants and industrialists strongly criticised the Government for not publishing the full text of the second report made by Brassert and Company, London, on the establishing of the industry in the Dominion. Brasserts' first report, based on the establishment of the industry by a private company, it was pointed out, presupposed a contribution by the Government of £87,000, plus a bonus of 35s a ton on pig iron and 15s a ton on steel for the first two years. This was estimated on a capital cost of £2,993,000, whereas the position had changed greatly to-day through rises in the cost of materials and labour. The capital cost would now be nearer £4,000,000, without taking into consideration the cost of wire works. So if Brasserts' made a report to-day, based on operations by a private company, it was contended, it was obvious it would consider it necessary for the State to make a much higher contribution, a fact which suggested the present scheme was not an economic one. Problems with Wire Works Extensions being carried out by the Broken Hill Proprietary at Port Kembla, where most of the heavier materials were produced, were likely to assist considerably the supply position. With the taking over of the Port Kembla works, rolling could be so arranged that it was able to minimise delays inseparable in the deliveries from steel works. " The decision of the Government to establish a wire works is doubtless based on the idea of giving a sop to the farmer by a promise of low prices," said one merchant. "It is obvious that in this matter the Government knows little of the problems before it, for it will never be able to manufacture on a low output at competitive prices with Australia. The plant in the subsidiary company of the Broken Hill Company is contained in the largest wire works in the world. It is a most intricate plant, comprising much electrical equipment. " To cater for the New Zealand market the Government would have to supply wire of 30 different gauges. If it hopes to supply the whole of the New Zealand market in wire netting it must he prepared to manufacture over 600 sizes."