The australian naval institute


Journal ol the Australian Naval Institute



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Journal ol the Australian Naval Institute Page 31

share of the lucrative world cruising trade as a source of foreign currency. This is possibly the first time for some years that the larger vessels have been run on a profitable basis.

But now a trade war of sods is developing between the Soviets and the traditional ship­ping lines, and the latter are screaming un­fair'. We have already seen one example of the Soviets forcing a shipping line out of Australia — Chandris Lines have ceased operation here as a direct result of Soviet undercutting.

So, what is happening on the world trade routes?

In the heart of Siberia, across thousands of miles of forest and permafrost, the Soviets are laying new railroad tracks. It's the Baikal-Amur Railway. It will go from the Pacific Coast (north of Lake Baikal and join up with the Trans-Siberian Railroad. Containers will be shipped to Nahodka on the Pacific coast; load­ed onto high-speed intercontinental goods trains, and then taken across the new stretch of the Trans-Siberian to join up with the estab­lished main line, and thence all the way to the Baltic. From there, they will be trans-shipped to wherever they are supposed to go in Eur­ope This will, of course, have an absolutely devastating effect on the European—Oriental shipping runs.

At ihe moment, it takes about six weeks to ship cargo around the Cape or about five weeks through the politically unstable Suez Canal. Doing the journey by rail would cut the time down by about three wee«s, and it would be much cheaper. Of course, this is a long time into the future, but for this very lucrative North Pacific and Far East-Asian trade, the battle-lines are being drawn up.

The Soviets are constructing new har­bours for new ships together with the most modern port facilities. They are building ice­breakers to keep these ports open all the year round, and even new ice-breaking and con­tainer ships. In 1978. the Soviets claimed to have clocked up a record: Ihey transferred containers from ship to rail in only 90 seconds each. On the Baltic and Pacific coasts, the Soviets are building some of the largest con­tainer terminals in the world, and they are building the ships that will match and supply them At Vostochny in Northern Siberia, they are building (with Japanese technical help) an­other huge container terminal.

Whatever terms one uses to describe these startling developments, the figures speak for themselves. The Soviet Union now has the sixth largest Merchant Navy in the world Twenty years ago, it had only 26th place. By this year, 5,000,000 tons dwt will be added to that fleet. That's 55 ships, and that should bring them up to somewhere around



HMAS MELBOURNE viewed from the bridge of the ORSHA during 1976 The question may be asked whether an Australian National Line ship would have a similar berth in Leningrad.

by courtesy of the author

20,000,000 dwt, and that s a considerable fleet in anyone's language. At the moment they have the largest conventional cargo liner fleet in the world, but they are building additional fast Ro-Ro container vessels and bulk oil car­riers as quickly as possible. Just suffice to say that of all the ships that are building at present in the world, over 20% are destined to sail under the Hammer and Sickle.

The Soviet shipping rates have set 'the cat amongst the pigeons' in the Pacific, and that's one of the areas where it affects Australia With crews paid the equivalent of only 30 dol­lars a week, and with low overheads, they are supposed to be undercutting established ship­ping lines by 15 and 20%. There are even re­ports of 40 and even 70% reductions in tariffs. Overall, the Soviets now haul about 12% of world liner cargoes. But that vastly under­states their impact Avoiding as far as possible heavy, low-profit commodities on the world scene, Soviet masters and their agents batten on such lucrative freight as cameras, small high-quality machinery and electronic com­ponents. In other words the small volume.

Page 32 — Journal ot trie Australian Naval Institute







The general cargo vessel PRAVDINSK, 10954 g.r.t.. built in East Germany in 1974, leaving Sydney Harbour June 1980.

by courtesy John Mortimer

high value cargoes. State-owned, financed and operated by a system that permits no large-scale internal competition, and fuelled from State-owned oil reserves and refineries at prices which are approximately 30% of world prices, Soviet masters are often able to break into new routes using operating methods which would most likely prove to be ruinous to Western shipping firms. For ex­ample, individual Soviet vessels will operate and leave harbour only half-full as often as they can, thereby using saturation tactics to 'swamp-out' competition from as many ship­ping lines and nations as they can manage.

Why have the Soviets become such cut­throat capitalists? Aside from gaining precious foreign exchange, Moscow's merchant fleet bolsters the Soviet Unions prestige by show­ing the Hammer and Sickle in as many farflung ports as possible. The last time the Western world saw much rapacious competition poten­tial was in the bad old days' of the 1890s in the United States of America when unbridled commercial greed created the vast railroad and shipping empires owned by such moguls as the Astors. the Vanderbilts and J.P. Morgan himself.

So far, the Soviet Merchant Fleet operates on an intrude and conciliate strategy. Soviet negotiators claim they simply want to join — not wreck — the established shipping confer­ences. When pressed, as they were in 1977, by a proposed U.S. law aimed at limiting third-

flag shipping, the Soviets were conveniently quick to reach a deal with the conferences; but the shipping conferences have been putting pressure on Western governments around the world to create legislation designed to keep the Soviets in check.

With unemployment high throughout the West, and with many shipyards overseas idle and some trade stagnating, the Soviet threat is ominous. In August 1977, West Germany. Hol­land and Belgium delivered private messages of protest to the Soviet Union. British officials met Soviet counterparts separately, but on a Black Sea cruise ship. However, as one trade agreement after another lurches towards a signed but shaky compromise, Moscow shows few signs of letting up on its long-range goal of carving out for itself a disproportionate share of the world's commercial shipping October 3 last year saw the formal acceptance of the Black Sea Shipping Company as a full member of the India-Pakistan-Bangladesh Conference which controls the trade between the region and the U.K. and Continent. The 22 existing members of the Conference are re­assigning a proportion of their share of the trade to the USSR

Australia herself has contributed to Soviet as well as flag-of-convenience carriers with her fantastically high seaman salaries com­bined with multi-month vacation time. A stark contrast with the Soviet seaman's $30 approx­imate per week.
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