FREIGHTS AND CHARGES.

Otago Witness, Issue 1904, 18 May 1888, Page 6

FREIGHTS AND CHARGES.

The influence of freights and other in- •• cidental expenses involved in placing the productions of exporting countries 'on out-*, side markets seldom obtains sufficient consideration or public acknowledgment; yet-, these are the factors which nowadays mainly..., contribute to determine the ability to compete and the possibilities of competition in ; the world's marts for surplus — especially'"" agricultural — products. The fears of British farmers were for a time allayed by;;tho, „ reasonable belief . that' ' while breadstuffs, ■ meat, and the like could be produced cheaper in other parts of the world, the'cost of cpni veyance to the home 'markets would afford thema "natural protection," but the extra-V'] ordinary development of steamship "com- ■' merce has entirely changed the conditions, and now, as Sir Edward ; SuUiyanijustJy •„ observes^ , '•' freight' and transport fjaxo, so low that there is 'scarcely a single.*, article, raw or ' manufactured,- ..that'.'wjll, not pay carriage „;to an", English market." This statement has, however.^ "a ' very comprehensive application. Low costs of conveyance of products to British and. European markets are necessarily experienced in degree by the contributing countries. The far distant, and those with but trifling exchange trade, must pay the higher rates, and by so much are handicapped in, the competition; it 1 therefore follows that rates of freight . and other charges ..must, have a direct and potent influence in retarding or facilitating the development of the .agricultural^, and pastoral industries in countries so :circumstanced. Any projected new enterprise connected with these industries has from its inception, as experience has shown, formidable obstacles to encounter, and when eventually successful the results have not been dependent on any nursing by that portion of the commercial community immediately and largely interested in the success. The frozen meat business, which has advertised and made the colony famous, suplies a forcible illustration of the culties inseparable here, especially from a new undertaking, and tha measure of encouragement meted to producers. On the inception of the enterprise the promoters were well informed of the incidental costs of freezing and of the necessarily high cost of conveyance to the British markets by novel means of a risky product. It was'estimated that the high prices then obtainable at the port, of destination would fully cover all expenses, and leave a satisfactory margin of profit to the producers. . These calculations were, for say a little over two years, well sustained, but eventually a fall in the pric& •of meat occurred followed by ,a gradual decline to the lowest rates known for many years in the United Kingdom. The rates for freezing, freights, and charges were continued on the original scale the while, andvdjminished values and the consequences hiad to be borne exclusively by the and farmers of the colony. But , for the great natural capabilities of the country the frozen meat trade would have been extinguished by the incubus of freights and charges, and it was not until there were sure indications of a cessation of its expansion and a material contraction impending that inadequate abatements in freights were tardily conceded. As matters stand at present the purchasers of sheep lor boiling down are considerable customers, and were canning operations resumed the further reduction of freights, &c, would no longer be amatter of choice with those concerned. Meanwhile, in connection with the export trade in mutton, the freezing companies, shipping and insurance companies, London agencies, &c, &c, have their assured profits, the producers scanty returns, and in innumerable instances actual loss to put up with. ' Now that a disposition is evinced to export dairy products to British' markets, the conditions affecting . the establishment of a satisfactory trade are sure to be critically discussed, and one of the most material of these, as shown by the action of the Dairy Companies' Conference at Invercargill, is the question of freights. Professing a , desire to foster the dairy industries by affording facilities for- the development of an export trade, the shipping companies intimate a reduction in freights on cheese and butter consigned to the London market. This seeming reduction is unsubstantial and unsatisfactory, as the Conference, by the adoption of the following resolutioa, shows : — " That the letter from the New Zealand Shipping Company be received^ and that that company be informed that the reduction of £d per lb on cheese in the cool chambers does not satisfactorily meet the views of the Conference, inasmuch as the difference between gross weight and net weight nearly counterbalances the so-called reduction." Further, the Conference stated the rate of freight which should be charged if cheesemaking for, export to the Home Country is to be followed as a profitable' industry, and the enforcement of payment of freight in the colony is protested against. So much with regard to cheese. Now v as to the extent' to which butter exports will be affected. Messrs^ Nimmo and Blair give the following particulars from actual account sales, touching a consignment to London of 10 kegs of butter, net weight 6701b, sold at 66s per cwt: — £ b. d. 6701b butter at 66s per cwt ... " ... 19 14 9 Charges— i. d. Import entry at customß ... 2 6 Paid docks, landing, opening, for customs and delivery in town 3 5 Striking, housing, inspecting, and sampling ... ... 5 6 Fir-J insurance, Is; discount allowed, 3s 5d ... .... 4 5 Postage and petti es ... ... 1 0 Commission, brokerage, and delcredere ... ... ... 15 9 1 13 7 ' Net ... ... ... JBIB 2 2 This shows a trifle over £d per lb, and the total expense account would therefore stand ' thus : , £ s. d. Freight paid" in colony on net weight of butter— 67olb3 at \d ... 215 10 London charges ... ... 1 12 7 • £4 8 5 These items amount to a. fraction over l^d per lb, to which must be asded |d per lb for

Xe gs, in all (not including insurance and' exchange) C^d per lb. Now, according to the D ew regulations adopted by the shipping companies, and which charge the gross weights, a very substantial advance is made in freights. On Pond's boxes which weigh up to 161b, on kegs which tare from 16 to 22 and even 241b, according to size, the increased charge will amount to about Is s£d and Is 10 1" 5( * to 1 2s 2 2-sd, or more than £d P er lb extra; Pond's boxes carrying, say, 561b, small kegs 701b. The dairy farmer therefore pays freight and primage on packages which are lost to him, and must calculate accordingly. While it must be conceded that the shipowner cannot be expected to transport packages free— as has been the practice previously, according to the statement of particulars given above, when the charge was determined on — other customary charges, notably " primage," should have been reduced or discarded. This is to farmers a mysterious word, but understood to define some service for which they have to par. Now the ship is not credited with this levy of 10 per cent, additional on the freight, and the questions arise, Who are entitled to a nd receive the money 1 and why ? and f or whatservice is primage charged ? The practice of levying a percentage under the name of primage on amounts of freight in bills of lading originated in an arrangement to provide a premium for the captain, ostensibly for the safe navigation of the ship. While the levy still continues part and parcel of shipping exactions we have good authority for averring that it has long been the practice to devote primage moneys to other than the original purposes. It is alleged that some of the freezing companies have profited to the extent of 5 per cent, of the primage on the consignments prepared at their works, the other 5 per cent, going to the local agent of the sheepowner. So much is certain, the primage moneys charged on frozen mutton, cheese, or butter are paid by the producers and not credited to or earned by the ship. Granted that nearly all goods are so charged, but in the products named the freights from this colony are exceptionally high, and primage proportionally so. We are outside the Australian commercial circle where competition keeps down freights, and comparatively at the mercy of companies who act in accord ; our productions are handicapped. Combined efforts on the part of the dairy factory companies must, no doubt, compel minimum charges for cheese freights, as co-operation among producers would procure reasonable terms for the conveyance of butter.

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