Shipping rate

“ Rates in a country like the United States, which is comparatively young, and the development of which attracts the attention of the world, must, necessarily, be elastic, not only in the interest of the carrier, but of the shipping public. The principle is sound and has received the approval of the Interstate Commerce Commission, [278] that rates must be fixed with regard to their relations one with the other, and not entirely upon the cost of service. ”

“ Since the Civil War the American mercantile marine instead of growing with the country has gone steadily backward, until now the greater part of our shipping is done in foreign bottoms. Aside from the other disadvantages of such a condition, the payment of such great sums for freight to foreign companies is a direct economic drain. An estimate that the yearly freight bill amounts to $150,000,000 is probably not too high. That means that in the course of every year there is a demand for that amount of exchange with which to remit back what has been earned from us. ”

“ Besides making the packages of suitable size, goods for export must be packed to withstand hard usage, and must be well protected against the elements. Goods must be fully and accurately described in order that they may pass the custom house. The dimensions of each package must be shown on the shipping bills, for freight rates are based on the space occupied in the hold of the ship, rather than on weight. ”

“ There is not, in fact, a country on the surface of the globe to which a ship could be sent, in cargo or in ballast, with any certainty of earning a return freight which would pay even ordinary expenses of wages and port-dues—necessary repairs being out of the question. In the attempt, which I propose to make, to form an estimate of the losses sustained upon shipping during the past year, it must be borne in mind that the year 1850, with which I shall have to compare it, was notoriously one of severe suffering to all parties interested in shipping. ”

“ The economic parallel between rents in Europe and freight rates in America is very close and real. Rates are prices; they result from a conflict of interests; and the conflict is intricate because many interests enter into it. Freight rates are the rate of return on capital invested and work done by the railroad company and they enter into the cost of production of the shipper. They also affect the relative profits of big shippers and little shippers and the relative prosperity of towns and ports. Freight rates are, therefore, in our country, a means of distributing returns on industry. ”

“ In the second place, the shipper is guaranteed a stability of rate schedules which is deemed necessary for settled business conditions. The merchant, for example, includes transportation charges in the cost price of the goods in which he deals. But if the transportation charges on the same class of goods are subject to frequent change, the merchant can never tell when his competitor is to be given the advantage of a sudden lowering in freight rates. ”

“ American shipping has never recovered from this blow, but it is only fair to say that the cost of shipbuilding in America, by reason of her prohibitive tariffs, has mainly prevented her resuming her former position on the ocean. ”

“ Now, for instance, how do common boats rank, as first or third class freight?" "Third class, I should think," slowly responded the agent. "Ease your conscience, my friend," continued the clerk, "by weighing the boat, and charging the usual tariff rate for third class freight."
The boat, with its cargo still locked up inside, was put upon the scales, and the total weight was three hundred and ten pounds, for which a charge of seventy-two cents per one hundred pounds was made, and the boat placed on some barrels in a car. ”

“ Ocean freights are lower than those by rail. They fluctuate from day to day, and are affected by the supply, and by the available tonnage in port. Grain was carried from New York to Liverpool in 1890 for three shillings a quarter; the increased shipments in 1891 advanced the price to from four shillings to four shillings and ninepence a quarter, an advance of fifty per cent. The increased rate on grain affects all other rates, as the steamships vary their cargo according to the demands of the trade. ”

“ Against this we have opposed, in the western world alone, nearly £60,000,000 of agricultural produce, exportable and exported yearly, requiring a trade in returns equal to £56,000,000, and a proportionate number of ships’ tonnage and seamen. In the trade with Cuba and Port Rico alone, the United States have 1600 vessels employed yearly, (230,000 tons of shipping,) making numerous and speedy voyages, and from which trade only, these states, in case of emergency, could man and maintain from twenty to thirty sail of the line. ”

“ The making of a tariff of this character includes necessarily agreements for the classification of freight, as the freight classification is the essential element in the making up of a rate. That the interstate commerce rates, all of which are controlled by the provisions as to reasonableness, were not intended to fluctuate hourly and daily as competition might ebb and flow, results from the fact that the published rates could not either be increased or reduced, except after a specified time. ”

“ To quote the most recent example, about the middle of last century the United States of America fought a well-contested struggle with us for the carrying trade of the world. Shortly after the abolition of the navigation laws, the competition was very severe, and United States ships had obtained almost exclusive possession of the China trade, and of the trade between Europe and North America, and in the year3 1850 the total tonnage of the shipping of the States was 3,535,434, against 4,232,960 tons owned by Great Britain. ”

“ Immense increases in the profits of two shipping companies are, as a result of the ceaseless rise in freights, disclosed in the reports of two Newcastle lines published yesterday. The high cost of freights is largely responsible for the dearness of food, coal, and other necessities of life. ”

“ Or even if the article we import be one of mere luxury, still, if we will have it, it is manifestly more economical, for the same reason, to pay money for it to a foreign country than to produce it at home by the expenditure of an amount of labour more than equivalent in value to that money, and which we could employ profitably in some other way. Our author goes on to argue, in regard to the advantages of the East Country trade, that, taking our shipping to amount in all to 500,000 tons, and estimating the freight at 5l. ”

“ All other kinds of goods imported and exported come and go without let or hindrance. The masters of vessels report on arrival, and before departure, the approximate quantity of cargo carried, and, to a certain extent, its nature. But the returns cannot be regarded as in any way even an approximation of the truth, and the value of the goods I cannot attempt to estimate. The Annual Reports of the Harbour Master give very exhaustive details of the origin and destination of the cargoes, as of the shipping using the port, and many other matters of interest. ”

“ If they had more shipping than they wanted, we should still labor under the same difficulty, and employ foreigners; because the business is unchangeably in their hands, and the very moment the tonnage duty is increased, it will be an inducement to them to raise the price of freight. ”

“ And while our people have been large gainers by the repeal of the Navigation Laws, an Act which that year came into operation, our Shipowners have been greatly benefited, for in 1860 we owned 5,710,968 tons of shipping, showing an increase in ten years of Free-trade nearly as great as the increase during thirty-five years of Protection.
But the increase in the amount of business carried on in British ships to and from the ports of Great Britain is even more remarkable. ”

“ Of course the price of all ships, as previously stated, depends on their class, power, and equipment, so that the cost of one vessel ready for sea may be very different from that of another ship. For instance, sailing-ships, when new, range from 8l. to 22l. per ton, and steamers from 15l. to as high as 40l. or even 45l. per ton if the engines be very powerful, highly finished, and mounted, and if the passenger accommodation be of an unusually superior and extravagant description. ”

“ In the three years after 1789 the merchant shipping registered for the foreign trade increased from 123,893 tons to 411,438 tons, presaging a growth without parallel in the history of the commercial world. Foreign ships were almost entirely driven out of American ports, and ninety-one per cent of imports and eighty-six per cent of exports were conveyed in vessels built and manned by Americans. Before Congress intervened, English merchantmen had controlled three-fourths of our commerce overseas. ”

“ In addition to this enormous business in the over-sea trade, our coasting trade was represented in 1889 by over 90 million tons of entrances and clearances, which would probably add 20 to 25 millions additional to the gross income of our shipping interest, bringing up the total tonnage that entered and cleared from our ports in 1889 to 157 millions, and the gross income resulting from the business of transportation by sea to, approximately, about 90 millions sterling. ”

“ In 1850, we built 133,695 tons, and in 1861, 310,900 tons; showing an annual decrease between the former periods of 11,976 tons, but an annual increase between the latter of 177,205 tons.
The reason of these extraordinary results is obvious. Shipping is not the parent, it is the child of commerce. If your Government apply to its merchant shipping the principles we have adopted, you will find that the results will be very much the same, for these principles are applicable to all countries. Shipping has no creative power in itself, like land, or manufactures, or minerals ”

“ In spite of all improvements the sailing vessel has not been able to keep its share of sea-borne commerce. So much depends on certainty in modern business that the merchant will gladly pay a higher freight rate to be relieved of the element of uncertainty which is bound to attend navigation by sails. Steamers now exceed the sailing vessels of the world not only in tonnage, and still more in effective carrying capacity, but even in number also, if only vessels of 100 tons and above are counted. ”

“ In view of the present disturbed conditions of production and consumption, any [Pg 399] judgment as to future demands or available surplus must take into account several factors which cannot be accurately measured,—such as financial control in foreign countries, possible tariffs, and foreign competition. For this reason the above statement should be regarded as only tentative, though it is the result of a rather exhaustive study of conditions in relation to the world control of shipping. ”

“ Without referring to the authority of Mr Huskisson, who stated what is well-known to all men practically engaged with the subject, that the outward entries afford no correct data for judging of trade returns, it may be sufficient to remark that the difference is mainly owing, in the present instance, to the prodigious multitude of our emigrants to America, the shipping employed in conveying whom is estimated at 240,000 tons. ”

“ They insure prospective shippers not only that the rates are just and reasonable per se bt that the y are properly related to those of their competitors. Shippers are then not dependent on their ability to get exception rates or commodity rates after their industries are established and their shipments are ready to move. They have a basis for planning ahead by relying on a coherent rate structure reflecting competitive factors. ”

“ In general the railroads have taken on the duty of wharfage and handling for freight consigned for overseas shipment. [5] In some instances railroads have charged for the use of the piers ('wharfage') and the necessary 'handling' separately from their charge for line-haul transportation. In other cases there has been only a single factor export rate (one inclusive charge) providing for limited shipside delivery with the railroad furnishing these accessorial services pursuant to their tariffs at no extra charge to the shipper. ”

“ This commodity rate, while special to meet a particular contingency, was open to any other shipper similarly circumstanced. The student cannot too carefully discriminate between these two sorts of special rates. They are constantly confused in the public mind. The effect of these open commodity rates, is not to create difference of opportunity between individuals, but to generalize economic conditions and equalize prices throughout wide areas.
The most satisfactory way to describe commercial competition as applied to carriers is by concrete illustrations. ”

“ It is evident, from this summary, that the decline of British and growth of foreign shipping will be so rapid, under the system of Free Trade in Shipping, that the time is not far distant when the foreign tonnage employed in conducting our trade will be superior in amount to the British. ”

“ At the time that the great work was commenced, and for many years afterwards, the revenue from shipping dues was quite insufficient to enable any substantial progress to be made, and the trade grew so rapidly that it became imperative to either borrow money in order to carry out the required works, or allow the shipping to seek other ports, where better facilities were provided. ”