15 APRIL 1938, Page 34


WHILE there is little sign that the shipping freight market has yet begun to recover from the slump which set in last autumn, shipowners are preparing to ride out the present storm in better circumstances than the last. Their latest scheme is 'for a laying-up pool for-rramp ships oh the lines of the Schierwater pool which was operated successfully for tanker vessels in the previous slump. The scheme provides that an agreed percentage of gross freights arranged after the beginning of the scherrie should be paid into the pool and that owners who decide to lay, up vessels should draw out from the pool an agreed 'sum to cover the cost of laying up. Thus it is hoped to entice the less efficient vessels out of the market and improve the position of those who remain. If the scheme finds favour with the British tramp steamship owners, it is intended to approach the owners of cargo liners and the foreign tramp owners.

At the same time the minimum freight rates on certain key routes are being loyally observed by steamship owners of all countries. Both the minimum freight rates and the proposed pool are based on the assumption, which has been found to be more true in shipping than in most industries, that demand at any given moment is inelastic, and price cutting will not appreciably increase the total volume of shipping employment. The demand for shipping nevertheless changes quickly, and it is possible that the very heavy buying of wheat by the British millers at, the end of last week will have a favourable effect.

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