Owning Ships In The Pacific

Little Profit Or Pleasure In

Burns Philp’s Chairman Discloses Some Depressing Figures

WITH the two great Australian maritime unions (seamen and wharf labourers) controlled by Communists, and directed by the Reds so that they can inflict all possible embarrassment and loss upon private enterprise, the Aus tralian shipowners are experiencing increasing difficulties.

The South Pacific Islands’ senior Company, Burns Philp & Co. Ltd., directly and through its various affiliations, is feeling the full blast of the Reds’ activities in its ship ping business. At the Company’s annual meeting in Sydney, on May 20, the Chairman, Mr. James Burns, made it clear that, if the big con cern had not spread its activities over so wide a field, it could not maintain its earning-power. Its shipping business is becoming an embarrassment, without adequate earnings, and it could not be carried on if it were not assisted by the Company’s other activities.

Mr. Burns did not mince his words, and what he said, about ships 2nd plantations, is of general in terest to the South Seas. The fol lowing is from his report: With regard to shipping (said Mr. Burns) we are building a small notor vessel to replace the Tulagi, which was lost by enemy action luring the war. She should be launched about next September, and will probably be used mainly for inter-island work.

During the year, we regretted to lave to sell the Merkur for break ing up, but she was getting old, and under present-day costs it would have been unpayable to give ler an overhaul to secure a further 'our years’ life.

It will probably be advisable to •eplace her in the Australia-Singa )ire trade, but this needs a good leal of reflection. Australian-owned vessels are handicapped in various vays, even if registered in London >r elsewhere, with the scale of wages, hours worked, accommoda ;ion, etc. Also, if the vessel is bund to be unsuitable for chang ng conditions, there is always the ioubt about being allowed to sell aitside Australia.

We have to compete against breign tonnage in the Singapore md Islands trades, and we can inly survive in the long run if we lave equal conditions.

Before the last War, to cover hese unequal Australian condi ions, we used to receive a very arge subsidy, running into between 50/60,000 a year, to carry on the slands trade. To-day, we do not eceive this, so we have to go care ully.

, , *ora repeat order for a vessel like the Braeside, we have been given a price of approximately a million sterling. This is £1,250,000 Austrahan; and, as our taxable in come is reduced by about 10/- in the £, we would require to make 2h millions Australian to provide the UK credit of one million sterling.

This new tonnage will probably have to be provided, but we first want to get the new Tulagi paid for, as, although only small, she will cost us about half a million. wUh W D e eS°aSv d «*-end.

days, S sfrikts the goinl' woSd

be much easier. However, shipping is so interwoven with our business ahhoimh - f mUSt -? y t 0 . C^ rry '° n ; although it provides us with a host of troubles.

1 RECENTLY read the Annual report of the Chamber of Com merce of the UK, from which 1 give the following extract: "The replacement of ships is a continual process because of the varying ages of vessels making up a Company's fleet. When the time comes for an individual ship to be replaced, three courses are open to the shipowner—to build a new vessel, to continue to run an un economic ship in competition with more modern vessels owned by foreign competitors, or get rid of the ship without replacement and thereby reduce his and the country’s capital assets. The cessation of the flow of orders indicates that owners are being obliged to forego the first of these courses and to choose be tween the other two.

“There is no sign of a resumption of orders, and 250,000 tons of ships from UK yards were cancelled in 1953.”

The remarks made by Sir Frederick Rebbeck, managing director of Harland & Wolff, at a recent launching, are also interest ing. He said, for 24 years prior to

1953, Harland & Wolff had the biggest output of new shipping ton nage in the world; but in 1953 they were only sixth. The reason, he stated, was foreign competition, and the tender labour position, with everyone ready to strike. Even the day before the vessel was launched they had a sit-down strike.

Another speaker at the same launching said his Company could recently have ordered a ship of 10,000 tons from German yards at 10% less than in England; and (what was even more important) they could give delivery within one year.

The huge original cost of new ships is a serious charge during their twenty years of life which has to be met—also running, overhaul, and expenses generally.

AT any rate, we have no intention of building another Bulolo. This vessel was built in 1938/39, and I think is the most recently con structed of any Australian-owned passenger vessel on the Australian coast. She originally carried 246 passengers, but owing to demands for so many single-berth cabins for the crew, together with recreation rooms for officers, engineers, sea men, firemen, cooks and stewards, she now can only carry about 180 passengers.

The fact is, for the Islands trade with poor wharfage accommoda tion at most ports of call, we can not build passenger ships big enough to give all the amenities the Australian crews want, and carry enough passengers to make the vessel pay. Therefore, under pre sent conditions, the most we can wisely do is to build purely cargo tonnage.

Stockholders no doubt realise that we get no protection for our ships under the Australian Naviga tion Act, in the Papua-New Guinea trade, and we have to face world wide competition.

Surely, from a national defence point of view, it is important for Australia to have an up-to-date mercantile marine in time of war to maintain vital communications with Northern Australia and New Guinea, also other Pacific Islands.

It is shipping companies like ours, which, during the last War, pro vided much suitable shipping and experienced masters, officers and seamen, and many of these, with their invaluable local knowledge, were also selected as pilots for the American Navy and USA, British and other transports. We are still able to supply the same facilities, and are continuing to replace war losses with expensive new tonnage

from profits on which we have already paid high taxation.

WE are having great difficulties in Papua-New Guinea in re gard to obtaining sufficient labour to run our plantations, and if we could fully man them, we could probably collect over 1,000 tons more copra, which, at the pre sent time, is not being harvested. 1,000 tons at £75 per ton, for copra delivered to store at a main port, is £75,000, which would make a difference in plantation returns.

This is not all. We would like to grow cocoa and other products which would all help in the develop ment of the country: but it would be foolish to go into other local ventures up there if we did not have sufficient labour to assure a reasonable chance of success.

Burns Philp (South Sea) Co.

Ltd. and Burns Philp (New Guinea) Ltd. have also done very well, but there is increasing opposition all round —a condition which is natural to the development of all countries.

Islands Travellers to NZ

Mr. and Mrs. H. J. Hulek and Roberta (left), of Sava, were met at Auckland recently by Miss Elaine dagger. Mr.

Hulek, on retirement leave, has been

Secretary of the Education Department in Fiji.

Mr. and Mrs. R. O. Marsack, of Apia, were holidaying in NZ in April. Mr.

Marsack is on the staff of Morris Hed strom & Co., Apia.

Mrs. Malama Head (centre of group) who represented Niue Island during the Royal Visit to NZ was farewelled by Niue friends and relations when she returned home in April.