MR MASSEY ON SHIPPING FREIGHTS

Otago Daily Times, Issue 18626, 7 August 1922, Page 6

MR MASSEY ON SHIPPING FREIGHTS

REPLY BY THE SHIPPING COMPANIES. The Prime Minister, in the House of Representatives on July 25, adversely criticised meat rates of freight from Now Zealand compared with those charged from the Argentine, which ho stated were as follow Argentine. New Zealand. Mutton ... gd per lb Ijjd plus 2J, pec cent. Lamb ... |d per lb l*jd. plus per cent. Argentine rates of freight are hardly comparable with Now Zealand, tor from the Argentine steamers are guaranteed full cargoes, and receive freight on any space not filled; moreover the cost of loading the meat is borne by the freezing companies instead of by the steamers as is the ease in New Zealand. Ten days are allowed for loading in the Argentine and 10 days for discharging in the United rvingdoni, demurrage being paid for any time occupied in excess of this. Loading from the Argentine is from one port only to one port of discharge. In New Zealand, in order to meet the needs of freezing companies at the many poi.s whore freezing works are situated, steamers frequently have to load at four or five ports, and occasionally to meet the desire for now markets, discharge at two ports to four ports , The present rate of freight from the Argentine is 29/32d. This rate applies to frozen beef, mutton, and lamb. The distances involved from the Argentine to the United Kingdom and from Now Zealand to the United Kingdom are approximately 6300 miles and 11.400 miles respectively, so that the rates of freight on a mileage basis ore per ton mile as follows

New Argentine. Zealand. Beef ... .32d .23d Mutton 32d ,33d Lamb 32d .35d The above comparison is based on the voyage via Panama. The majority of steamers, now proceed home via Cape Horn, a distance of approximately 12,100 miles, and if this latter basis were adopted, the figures would be more favourable to New Zealand, and would be as follow; Beef ... ... _. .21d Mutton 31 d Lamb 33d A closer comparison is afforded if we take into account the time occupied on the respective round voyages, including coastal itinerary. In the case of Argentine, we understand this is about 90 days, while owing to various causes the round voyage from New Zealand now occupies, in nearly every case, about six months; the result is that while a River Plate or Argentine steamer can earn under present conditions during the year on each pound of meat—beef, mutton, or lamb, for which she has room—about 3.62 d as a miximum, the Now Zealand vessel’s earnings would be os follow: Beef 2.31 d Mutton 3.33 d Lamb . 3.59 d The foregoing comparison follows the lines of comparative rates of freight of the Imperial Shipping Committee’s report issued at the end of lost year—viz., October, 1821, which, at the request of the New Zealand Government, inquired into the rates of freight charged from Now Zealand, and reported: “Our general conclusion is that under existing conditions th e current freights charged by the lines trading to New Zealand ere not unreasonable.” We might here interpolate the following paragraph from the Imperial- Slhipping Committee’s report:— . .. Whether we consider the costa of the shipowner relatively to the freights charged or the comparison with the River Plate trade, the argument thus far tends to show that though the present freights are undoubtedly a heavier burden upon the New Zealand producer than the pre-war freights, or than the Plate freight may be on the producers in that region, they cannot b e regarded as unreasonable when compared with either.” Since the report referred to was issued the shipping companies engaged in the New Zealand trade voluntarily made considerable reductions in meat and general cargo rates. The Prime Minister drew a comparison between wool rates of freight from New Zealand to the United Kingdom, and rates of freight on cotton from Egypt to America. Ho stated that the rate per ton for wool from New Zealand was £lO 5s 4-d, while cotton was carried from Egypt at 35s per ton. The comparison is somewhat startling, but to bo real should be actual. The wool rate quoted from New Zealand is per ton weight, while the rate quoted on cotton —although this was not pointed out—is per ton measurement, and the fact was not mentioned that in New Zealand the steamer pays for the cost of dumping (i.e., hydraulic pressure to reduce the size of bales), while in Egypt the steamer is freed of the cost of dumping. To depart from technicalities, the actual position is as follows:

fad. New Zealand wool, per ton measurement in steamer’s hold, represents 3 6 0 Less dumping 0 6 0 2 19 0 While Egyptian cotton, per ton measurement in steamer’s hold, represents 1 15 0 We were not aware that cotton was carried from Egypt to America (the principal exporting country of this commodity). The distance from Egypt to America is about 5000 miles. The distance from New Zealand to the United Kingdom is approximately 11,400 miles. If the comparison be Egypt to Liverpool (as is mor e likely to be the case) the distance is about 3000 miles, but whichever be tho comparison, it is evident that distance for distance the rate of freight on wool is immeasurably cheaper from New Zealand than the rate charged for cotton from Egypt. The comparison of £lO 5s 4d per ton weight of wool with that of cotton at 3Ss per ton measurement is therefore misleading, the real comparison being between New Zealand £2 19s per ton measurement 11,400 miles away, with £1 15s for, say, one-half or a third of the distance, as the case may be. The information supplied to the Prime Minister from whatever source derived was apparently based on an inexact knowledge of shipping conditions.

The Prime Minister stated on. the same date that the Meat Board had 'been able to arrange with the Port of London Authority for a reduction in the charges of moat... From advices received from London we gather that shipowners and 1 meat importers have been negotiating for the past year with the Port of London Authority for a diminution of charges, and that their representations had been reasonably met by gradual reductions, culminating in further reduced charges dating from July 31.

Some very considerable surprise has 'been expressed in London regarding the claim of the Meat Board to have brought about the recent reductions, and we venture to suggest that credit dhould be given where credit is due, and the reductions recently announced were the outcome of the abovementioned continuous negotiations. Tho position to-day is that while considerable reductions have been made in running costs in other parts of the world, and these have been reflected in reduced freights, unfortunately reductions in costs in Now Zealand have not materialised to any extent as compared with other parts of the world.

Vessels trading to New Zealand have to call at a considerable number of ports, tho cost in dues at which, generally speaking, show increases. Coal in New Zealand is approximately 125 per cent, dearer than in pre-war days, and labour costs are still high. Reference has been made in several instances to the development of markets other than the United Kingdom. In this respect tho direct lines have always been sympathetic and given facilities to open up new markets. 'There has been frequent mention of Manchester as an alternative port to London, as if it were a now development. For many years there have been regular sailings to West Coast ports of the United Kingdom—viz., to Avonmouth, Liverpool, Manchester, and Glasgow.

So far as American ports are concerned, frequent announcements have been made that steamers wore prepared to call for moderate quantities of cargo, but these wore not always forthcoming, and it is a misstatement that American business has been hampered for want of shipping facilities. The real difficulty in connection with American trade has beer, the uncertainty of the tariff that would operate on importations of moat. The question of tariff has been one that, has been under consideration by American authorities for seme time, and no finality has been reached Therefore, shippers desired a. loophole by means of an option for delivery in the United Kingdom. During the period of prohibition against Armours shipping to the United Kingdom they could not give this option, but when they bad permission

to ship this option could be granted. The only occasions on which there were any difficulties were when applications were made for space after a ship had been allotted to loading ports, and her bunkering arrangements had been completed to proceed Home Ha the Horn. With reasonable notice provision could always have been made for American shipments. An effort was made last season to reinstatute the trade for apples to Mont Video and shipping companies did all in their power Ixitli by mail and cable to assist, but unfortunately Monte Video importers found themselves unable to accept the form of payment suggested by New Zealand exporters.—7B22,