THE MAIL CONTRACT.

Wanganui Herald, Volume XXXX, Issue 11974, 18 September 1906, Page 7

THE MAIL CONTRACT.

Threatened "Outting" in the Australian Trade. The prospect of A rate-cutting war in the Australian shipping trade is being discussed (writes St. James'B Budget) as the result of the decision of the Federal Government to give the mail contract to a new company. At present there are six or seven regular lines engaged in the trade, including the P. and 0., the Orient, and the White Star, in addition to a number of occasional steamers. Even in the busy season many of the vessels are despatched only partly laden, and for six months of the year the frieghts are quite insufficient to go round. Hitherto, however, the rates have been maintained on a level by a conference to which all the regular lines belong. But the introduction of a new company, which will require at least eight large vessels to carry out the conditions of the mail contract, will, it is said, make the competition so keen that a struggle for the freights is .bound to ensue. Contrary to what might be expected, neither the average shipper nor the average merchant engaged in the Australian trade views the prospect with satisfaction. He is anxious to get as low rates as possible, but what he values above everything else is stability of charges. A rate war does him more harm than good, because it tends to unsettle trade and produces an embarrassing uncertainty. Today, for instance, he may send out a hundred tons of cargo at 50s a ton ; to-mor-row a rival may be able to ship similar goods at 40s. Ten shillings a ton is a serious difference to the consignee, and unless there be a shortage the loss must be made good before the articles reach the retailer and the customer.

As the new mail contract, however, does not come into operation for 18 months, there is time for all parties concerned to consider the situation, and find.^some means, if possible of averting the threatened war.