PACIFIC SHIPPING

Otago Daily Times, Issue 23058, 8 December 1936, Page 9

PACIFIC SHIPPING

PROPOSED NEW SERVICE MODERN PASSENGER LINERS CHALLENGE TO MATSON. LINE OPERATING COSTS EXAMINED (Per United Press Association) WELLINGTON, Dec. 7. The report of the Imperial Shipping Committee states that the committee was asked to supply a report— (a) As to the traffic possibilities of a British passenger and cargo service between Western Canada and Australia and New Zealand. (b) Whether the service proposed would be appropriate in view of the traffic possibilities and of any other shipping facilities available, and, if not, what kind of service would be appropriate? (c) As to the probable financial results of such a service, taking into account the financial results of the working of the existing British services between—(l) San Francisco ano Australia and New Zealand, and (2) Vancouver and Australia and New Zealand. (d) Whether such service would have any ill-effects on other British shipping interests. FAST PASSENGER SHIPS The proposed service would be operated by two new ships carrying approximately 350 to 375 first-class passengers, 250 cabin class passengers, and 150 to 175 third-class passengers. The ships would be comparable with the existing Matson Line vessels and capable of operating at a speed of 21 knots. Each ship would sail once a month on a schedule based somewhat on the following:—From Vancouver and Victoria to San Francisco, Honolulu, Suva, Auckland, Sydney, and Melbourne, and returning to and via the same ports, excluding San Francisco on the north-bound journey. THE MATSON LINE . The report refers to the financial assistance given to the Matson Line b T ' the United States Government. It says that the company's strength j spheres other than shipping—in hotels, sugar, oil, and real estate—is noted, showing that the company averaged over 2,000,000 dollars in profits in the yeara 1926-1933, in which period approximately 77 per cent, of the net earnings were from sources other than steamship business. The company has this year invested 500,000 dollars in PanAmerican Airways, Ltd. The existing mail contracts cease by virtue of the'l936 Act on June 30, 1937, after which a new basis of assistance to neutralise the higher costs of buildings and operating American ships is to be fixed. TRAFFIC EXPECTATIONS The traffic possibilities between Western Canada and Australia and New Zealand are discussed. Passenger traffic from 1925 to 1935 has been twice as important as cargo ir Canadian-Australian receipts, and it is mainly on an increase in passengers that expectations for an improvement are based. Interpor.t Canadian-Australian traffic yields more passage money than through traffic, but the figures measure the effect of the depression and recovery from 1933. Comparing 1935 with 1931 the Canadian-Australian share in the total through passenger traffic fell from three-fifths to one-fifth, and " there seems to be no reason to suppose that under the present conditions this position will be substantially altered." To maintain four ships of the Matson class "passenger miles" must be increased from the 1935 figure of 120,000,000 to 154,000,000, an increase of 28 per cent. Calculations here are based on the assumption that the Union Line between Wellington and San Francisco will be discontinued and that the new Awatea will not diminish the Auckland-Sydney traffic of the Canadian-Australian Line. On these assumptions, and perhaps more important since a 20-year period is in view, assuming no great setback in world economic conditions, the required increase is concluded to-be not unlikely. The cost of. each ship will be £ 1,250,000 and it is considered that the ships will be appropriate to the service. It is stated that the averagefares on the new ships would no doubt be higher than those that obtained at present.

SUMMARY OF CONCLUSIONS The principal conclusions of the committee are as follows:

1. Any useful answer under the first two heads of the order of reference must in some degree involve the idea of a speculative venture, since a superior service might quite likely call forth traffic on a scale not at present visible, whereas the more modest proposals of the committee materially alter the present position. 2. For a service of the character under consideration passenger traffic is likely always to be of greater importance than the carriage of cargo. 3. In regard to the third head the committee anticipates that with such vessels as are contemplated and assuming a certain increase in traffic there need not be a large if, indeed, any, loss on operating. 4. In regard to the fourth head the committee consulted the president of the Chamber of Shipping of the United Kingdom and the chairman of the Liverpool Steam Ship Owners' Association, each of whom had discussed the matter with a number of his members, and their general view is that whatever objections are still strongly held to the maintenance of uneconomic shipping lines no serious damage to other British shipping interests need be anticipated from a service such as is proposed, provided the conditions they indicated in their evidence before the committee are fulfilled.