The Daily News FRIDAY, SEPTEMBER 1, 1933. NEW FREIGHT CONTRACT.

Taranaki Daily News, 1 September 1933, Page 6

The Daily News

FRIDAY, SEPTEMBER 1, 1933. NEW FREIGHT CONTRACT.

OFFICES: NEW PLYMOUTH, Currie Street. STRATFORD, Broadway. HAWERA, High Street.

The new shipping freight contract made by the Meat and Dairy Produce Boards is satisfactory in that the new rates represent lower charges for the transport of New Zealand exports. The contract is anticipated to mean a saving of approximately £300,000, this being 7.05 per cent, of the charges made under the contract which expired yesterday. Until details of the new arrangements are available it is not possible to say whether any quid pro quo has been demanded by the shipowners in return for the lowered freights. Complaint has been made by them on many occasions that the costs of transport from

New Zealand are unnecessarily increased by the number of ports at which cargo must be accepted, and there are rumours that certain smaller ports will be cut out of the itineraries of the

larger vessels. It is also stated that arrangements have been made in anticipation of a lowered rate of exchange' between New Zealand and London, though the official message issued by the boards did not contain any reference to this. Of the saving of £300,000 the dairy industry should benefit to the extent of £124,000, and meat exporters by £176,000. Improvements are promised in the regularity of the services, and provision has been made in the new contract for the carriage of chilled beef though the rates for that service have not been made public. The negotiations have been carried out in London by the chairman of the Dairy Produce Board, Mr. W. A. Irons, and the chairman of the Meat Producers’ Board, Mr. D. Jones, who have evidently done good work. When the discussions commenced it was stated unofficially that there was little hope of any reduction in freights. In view of the continued reduction in imports to New Zealand many steamers had to come from Great Britain in ballast, and freights, it was said, must be based upon the knowledge that the next few seasons were likely to see a continuance of “oneway” traffic. Possibly the signs of recovery in the Dominion and in the United Kingdom have induced a more hopeful feeling in shipping circles, which hope by lowered freights to aid in stimulating the import trade of New Zealand. Before negotiations with the produce boards had proceeded very far a new factor appeared. The proprietors of the Blue Star line of steamers, Messrs. Vestey Bros., who are deeply interested in the meatexport trade of the Dominion, sought a share of the transport services between Great Britain and New Zealand. The firm offered as an inducement to

lower freights/ and while there was in the first place some opposition to its proposals by other shipping companies it is now stated to be a condition of the new contract that Blue Star vessels will handle 10 per cent, of the refrigerated cargo offering; The contract is an interesting illustration of collective bargaining and of the value of competition. Individual dairy or meat companies might have found it difficult to obtain any better, if as good, shipping freights than those which applied last season. But the two industries combined could offer substantial trading and there can be little doubt of tfie wisdom of this method of handling such matters as shipping and insurance. On the other hand anyone with any commercial experience will be inclined to question whether the Blue Star line’s offer to cheapen rates had not an even greater effect upon the freight rates obtainable than the most skilful negotiation. Theoretically the collective system of ordering trade relationships and workings ought to be the most successful. How to combine with that method the stimulus of open competition is a problem of which ho economist has shown a solu-

tion. Whether by good luck or by skilled prudence the fact remains that the New Zealand exporters seem to have been able to take advantage of what is best in both systems. To have done so indicates that negotiations have been carried out in an atmosphere of goodwill between shipping companies and exporters, a policy of give and take has been accepted, and the result has been an agreement that both parties think is fair. It looks as though many delicate negotiations lie ahead of the dairy and meat industries. The result of those which have led to the new shipping contract is by no means discouraging for future efforts.